What is pro­gram­mat­ic buying?

Online marketing has been re­defin­ing itself over the past few years. But this change hasn’t just been driven by rel­a­tive­ly recent in­no­va­tions, like social media: more tra­di­tion­al means of ad­ver­tis­ing have become both quicker and more precise. In the online ad­ver­tis­ing sector, real-time bidding describes a process whereby ad im­pres­sions are bought and sold through real-time auctions quicker than a page can load. And thanks to in­tel­li­gent targeting, potential customers or clients can be addressed with relevant ads anywhere online and not just within niche ad­ver­tis­ing en­vi­ron­ments.

Pro­gram­mat­ic buying (PB) refers to the automated purchase of digital ad­ver­tis­ing products, like online ads. Pro­gram­mat­ic buying is a closed process, which only last a few mil­lisec­onds and takes place on cor­re­spond­ing PB mar­ket­places and platforms. Real-time bidding (RTB) and real-time ad­ver­tis­ing (RTA) are subareas of this field. RTA involves a process in which marketers offer up their ad­ver­tis­ing in­ven­to­ries through automated bidding tools (RTB). Pro­gram­mat­ic buying refers to the automatic purchase of ad­ver­tise­ments on all digital ad­ver­tis­ing surfaces.

The terms real-time ad­ver­tis­ing, real-time bidding, and pro­gram­mat­ic buying are often confused with one another. And while these different processes are very similar, there are some important dif­fer­ences between them.

Pro­gram­mat­ic buying is the general term for any sort of ‘sys­tem­at­ic purchase’ of web ad­ver­tis­ing space. Although this process is automated, marketers are still able to use the system to further specify targets. Real-time ad­ver­tis­ing is the first subarea within this hierarchy and describes an automated system in which different ad com­po­nents com­mu­ni­cate with one another. In­for­ma­tion, offers, and bids are exchanged here si­mul­ta­ne­ous­ly.

Real-time bidding, on the other hand, is a dis­ci­pline of RTA. Also operating in real time, the critical factor here that makes RTB different from the other forms lies in the co­op­er­a­tion between purchase and sale: with RTB, a classic auction situation is at hand whereby multiple buyers bid for ad­ver­tise­ments in real time.

Let’s return to ex­pla­na­tion of pro­gram­mat­ic ad buying. By using specially provided platforms, not only are ads booked, but target group data for the ads’ cor­re­spond­ing targeting efforts is also accessed si­mul­ta­ne­ous­ly. This allows ad­ver­tis­ing stock and target groups to be ef­fort­less­ly cor­re­lat­ed with one another. Through this step, target groups can be selected in advanced (i.e. manually and prior to running the automated system), giving marketers maximum flex­i­bil­i­ty. Following this, pro­gram­mat­ic buying enables companies to increase their reach within a specific target group and reduce scatter loss. The booked formats can be designed in different ways. Display ads comprise a large portion of the ad­ver­tis­ing forms that are shown via pro­gram­mat­ic buying. Large format banner ads or video formats are also possible and are being used more and more via PB.

The main advantage of pro­gram­mat­ic buying is its ef­fi­cien­cy. Au­to­mat­i­cal­ly booking ads enables campaign budgets to be spent in a more optimal manner. Ad­di­tion­al­ly, accessing provided datasets allows more precise targeting efforts to be im­ple­ment­ed. This allows marketing teams to better identify and address customers, which leads to lower scatter rates.

While it used to be the case that target groups were addressed in their cor­re­spond­ing en­vi­ron­ments (e.g. mothers on baby blogs), it’s now possible to address them on any desired website. Targeting efforts allow con­clu­sions to be drawn about a visitor’s interests, and, as a result, help ensure that the right ad is matched with the right person. Using targeting methods to find the right audience isn’t a technique reserved ex­clu­sive­ly for pro­gram­mat­ic buying; there are many other instances where this measure is applied. When used in tandem with the other factors mentioned above, this tech­nol­o­gy helps its users achieve a broader reach and an increased online marketing per­for­mance.