Programmatic video advertisement buying, or just programmatic buying, is a major buzzword lately and at the forefront of video advertising discussions across the board. We at ReelSEO thought that we'd put together a primer for those who are not quite sure if they are ready or if they feel comfortable enough to begin using it. We hope this introduction and terminology cheat sheet help those of you who are thinking of taking your video ad buying to the next level.
What is Programmatic Buying?
Here's my basic definition of it:
Programmatic ad buying is the marriage of big data to advertising placement purchasing. It is generally done through an algorithm-based software interface where the ad buyer stipulates a set of criteria for ad inventory they wish to buy to display their ad. The buy is then executed via an ad exchange, trading desk or demand-side platform. The information for fulfilling the criteria may come from multiple sources based on the service and software utilized and the targeting criteria desired. It basically automates a good deal of what used to be done by hand through a variety of things like face-to-face negotiating, insertion orders, etc. It may, or may not include real-time bidding or automated optimization.
With big data being more readily available to ad buyers, along with new protocols like the IAB Quality Assurance Guidelines, it means less human interaction is needed to place ads in viable, desired locations across all devices.
Not So Sci-Fi Programmatic Buying
Through an algorithm, or sort of artificial intelligence (not in the Space 2001 sense... yet), advertising inventory can be purchased across a large variety or locations and shown to specifically targeted, albeit anonymous, users based on a preset selection of criteria.
Often, the inventory is not guaranteed at any particular location because of things like real-time bidding, which could see an online ad buyer outbid others who had pre-set their criteria, in order to display their ad at a particular time and in a particular place.
That then opens the possibility to future situations where particular ad buyers are allowed to purchase guaranteed inventory that is somehow reserved and considered premium, mostly meaning, they pay more than the majority of other ad buyers and are guaranteed specific, high-quality inventory that has a lot of high-quality visitors at optimal peak traffic periods.
Almost Scary Sci-Fi Programmatic Buying
It could also lead to further automated, optimized ad purchasing, which we are starting to see even now, where the ad buyer supplies the software with a baselines set of criteria for purchasing ad inventor. The AI will then crunch numbers on a massive amount of factors, perhaps even down to the temperature at the location of the user who will see the ad, in order to determine the best possible use of the ad buyer budget for maximum ROI and placement. It will then execute the ad buy for a particular buyer as it works to find the most effective ad placements and obtain placements that it has determined are best suited for the ad buyer and their desires.
I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do. - HAL 9000
As I said, this is already a reality in some places where the algorithm itself is able to produce better results than a human for multiple reasons, including the fact that it can crunch far more numbers in far less time. It's not predicting the behavior of the end user or consumer so much as it is reading trends in the data that is made available to it and then determining the best course of action, in regards to ad placement, to maximize the possibility of a return on investment.
It probably won't throw anyone out of an airlock any time soon...
Better Tracking All Around
Another scary facet of the future of programmatic buying is that everything will be tracked across multiple devices, multiple platforms, and even divergent technologies. That is not to say that the ad buyer or the artificial intelligence will truly know the actual identity of a particular user, but it will be able to follow a single user from device to device in order to consistently manage and maintain the message that the ad buyer is trying to convey.
Programmatic Ad Buying Benefits for Publishers
The ad buyers do certainly get a lot out of programmatic buying, but so do many publishers, and consumers. Publishers who have large amounts of high-quality traffic in demographics that maintain a high desirability are likely to see a noticeable increase in advertising revenue. After all, they are the place where the desired demographics are going and therefore their inventory is more desirable than other sites where there is less traffic or less traffic reporting which reduces ad targeting ability.
Publishers will, however, need to completely understand their advertising inventory and the value in it. They need to realize why it is valuable and then package it and price it accordingly. Increased demand for ad inventory against their content could mean that they are missing some vital factor, for example, their traffic is considered far more valuable than they have priced it at. The opposite can be said for lowered prices and demand, though all inventory will maintain at least a modicum of value, probably.
Publisher will also need to understand who is visiting their content, so that they can better understand why their content is valuable. Part of programmatic buying may include complementary ad placement, where an ad buyer wants their ads seen next to particular types of content, but only because it attracts a particular kind of demographic or consumer. They probably care very little about the actual content, except in a few cases.
On the flip side of that, publishers can also be choosier about the advertisements that are showing against their content. Through the DSP or ad exchange they should be able to have some finite amount of control as to what types of ads are shown to ensure that they are not detrimental to their own branding or message and are in fact of interest to their users.
Programmatic Ad Buying Benefits for Consumers
Often, marketers and ad buyers don't look at whether or not the consumers actually want to see the advertisements. Ad targeting is often done blindly, in a vacuum, as in, these people belong to demographic A, that means they are most likely shopping for a product like one we sell, we need to get our brand, product and advertisement in front of them.
However, that might not always be the case. Consumers often have brand loyalty for some reason or another. It might even be that they see your brand as constantly bombarding them with ads and therefore they feel a negativity toward your brand and your product, simply snubbing it out of hand, because you over-targeted them.
On the other hand, better targeting through programmatic ad buying could work toward getting a consumer to try your brand of product, in cases where they might not be completely satisfied with what they currently purchase. That's the hidden benefit to the consumer, a wider brand awareness of competing products to those that they already use, but are not totally satisfied with.
There is a fine line that needs to be walked, consumers often will use whatever information is readily available to them in order to make a purchasing decision.
Programmatic buying, as it gives ad buyers finer control over where the ads display and who sees them, also has some benefit for consumers. Over time they will begin to see more ads that do have more relevance to them based on their own behavior patterns when consuming connected content. It might give them a missing piece of information that helps them form their final purchasing decision, alert them to a brand new product they didn't know existed but which they have sorely wanted, save them money, or save them time. In today's ever-increasingly fast-paced world, time and money are still major factors along with quality and personal desire. When advertising stops blindly blasting consumers and starts targeting with pinpoint accuracy, it then goes from being a nuisance to a necessity. While the majority of consumers may never agree that advertising is good, they may still have their buying impacted by it.