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Programmatic Buying: Is It Real-Time or Not?

Posted by Neil Pace on Wed, Oct 1, 2014 @ 13:10 PM

In an earlier blog, I gave a topline definition of programmatic buying from beginning to end. It touched on all the basics, but I didn't really go into any detail. I wanted to go through each step of programmatic to make sure everyone was clear about this new technology. The first question that I wanted to address is: Is programmatic the same as real-time bidding (RTB)? The answer is--sort of.

RTB is really just the method of buying the digital advertising. In the olden days (and I'm really dating myself here), you typically bought a bunch of impressions that were run of site on a given domain. These impressions were bought in bulk and in advance without any choice in who would be seeing those impressions. You'd pay the same amount for the absolute best possible customer and the absolute worst customer. All you knew was "people" were seeing your ads--and even then it may not have been a person. But it was all we had then. And we had no choice but to buy it to reach the online audience. It was frustrating. Soon, sites began to sell specific sections of their sites based on how much traffic they received. You still didn't really know who these people were except that they had interest in whatever the site covered, so you still weren't sure if you were getting the "right" audience. And in both those scenarios you didn't know if you were getting a good deal or not because you were paying a rate set by the publisher and not at all based on demand.

Now we have RTB. You set your bid amount for impressions, your overall budget and goals, note where you would like to appear and the bidding starts. Each impression you purchase is graded on its own as a website makes it available. This is where the "real time" part comes in. But RTB alone isn't what any advertiser really wants. Technically, you'd be buying impressions based on criteria you set for your audience but on thousands upon thousands of websites. You're getting your audience based on the impression, but the environment may not be ideal. This is where programmatic comes in. Think of it as RTB with a boost.

Programmatic adds on a layer of data to your buy that can significantly improve the impression you're bidding on. Say you want to target readers of a particular website, but you only want people on a specific section of a website. RTB alone can't achieve this as those buys can only target by domain. Using the data provided by programmatic, you can target readers of that particular section of a website AND target them based on age AND target them based on geography AND target them based on other sites they've visited AND I think I've made my point.

So, ultimately, programmatic is really just using first and third party data to refine the impressions you bid on in real time. And there is so much data out there to choose from, you really can buy exactly the right person at the right time within the right content. It's an advertiser's dream, but there are still concerns about the quality of the inventory available. Some advertisers feel that programmatic inventory - because it's mostly automated - has to be the below-the-fold inventory that no one wants. Others feel that it might be more susceptible to click fraud because it's automated. The IAB is currently working hard to ensure that there are standards in place to ensure quality in this programmatic ad space. We'll delve deeper into these issues in a future blog.

If you have any questions about programmatic buying or want to talk about any media option available, contact us here. We'd love to hear from you.

Topics: RTB, programmatic, real time buying, digital

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