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How Does Programmatic Work? All of Your Programmatic Q&A

Reading Time: 5 minutes

You might have already heard about the term ‘programmatic’ in the digital advertising context. For digital marketers today, it is imperative that they know quite a bit about this terminology and how it works for businesses around the world.

According to a report, 65% of all the money spent globally on digital advertising will be through programmatic advertising. In 2020, it is predicted that $98bn will be traded programmatically worldwide – giving a very clear reason for the digital marketers to understand the significance of all the elements that are associated with programmatic advertising.

So what are the major questions that revolve around this specific topic? Let’s have a look:

  1. What is programmatic digital marketing?
  2. How do I run programmatic ads?
  3. Is Google ads programmatic?
  4. How does programmatic work?
  5. Is Facebook programmatic?
  6. Is Facebook a DSP?
  7. Is Google AdWords programmatic advertising?
  8. Is programmatic advertising effective?
  9. What is CPM?
  10. Is Google a DSP?
  11. What is dv360?
  12. What are programmatic platforms?
  13. What is a DSP in advertising?
  14. Who are the biggest DSPs?
  15. How does a DSP work?
  16. What is programmatic targeting?
  17. What is the unsold ad inventory?
  18. What is a programmatic buy?
  19. Is PPC programmatic?

 

What is Programmatic Digital Marketing?

  • In the simplest of definitions, programmatic marketing or advertising is the automated process of buying and selling ads online. Gone are the days when manual insertions, Request for Proposals (RFPs) and human resources had to be used for digital advertising. 

In today’s digitized era, software have taken over this procedure in order to optimize the way digital advertising can be done and also, to narrow down the potential revenue lost by both – the publishers and the advertisers.

How Do I Run Programmatic Ads?

  • Every digital marketer you come across will agree to the fact that creating a programmatic ad is no rocket science – however, everything else that precedes that ‘creation’ stage is. In order to create a successful programmatic ad campaign, make sure you do the following:
    • Research – First things first, make sure you have clear goals set for your advertising campaign. Do all your homework prior to your campaign launch – from studying your target market, brand awareness, current market conditions to demographical, pricing-related expectations and choosing the right DSPs. 
    • Launch – Depending on the amount of ad investment, target filters, operating systems, SSPs, etc., you are willing to start your campaign with, go ahead with your campaign launch.
    • Revisit – Use all the analytics, reports and dashboard visibility that you have at your disposal to monitor the performance of your campaign. If anything looks out of order or you find room for improvement, do that. You might as well retarget potential users who did not convert.

Is Google Ads Programmatic?

  • No, Google Ads and Programmatic are two different digital advertising concepts. While Google Ads is primarily based on its own users within the Google framework, Programmatic allows advertisers to reach out to vendor-neutral Real-Time-Bidding (RTB) mechanisms, including the Google platform.

How Does Programmatic Work?

  • The following steps will give you thorough visibility on how the programmatic process works:
    • A user visits a specific website page (publisher) that uses programmatic advertising – this initiates an automated mechanism to fetch an advertisement based on certain parameters.
    • The publisher places this particular user on their SSP (supply-side platform) so that the DSPs can be notified about the user’s characteristics using their website cookies.
    • Once the DSP analyzes the user information, it places a bid on behalf of the advertiser with predefined parameters.
    • After that, the SSP receives all the various bids placed by the DSPs. Then, the winner is selected and the ad is shown to the user accordingly.

Is Facebook Programmatic?

  • Yes, Facebook Advertising is categorized as Programmatic advertising.

Is Facebook a DSP?

  • Yes, Facebook’s Ad Manager is categorized as a DSP that only sells Facebook inventory.

Is Google AdWords Programmatic Advertising?

  • Google Adwords (now known as Google Ads) is not programmatic advertising mainly as it only uses the Google platform.

Is Programmatic Advertising Effective?

  • As per estimates for the US market, 2021 will witness programmatic advertising of around $81bn (88% of all display advertising in the US) – giving a clear indication of how effective programmatic advertising is for businesses around the world.

What is CPM?

  • In digital marketing and advertising, CPM stands for ‘Cost Per Mille’ (cost per thousand impressions). In technical terms, this is defined as the price a digital marketer would pay in return for 1000 impressions for his campaign. CPM assists digital marketers to make large calculations and base their strategies and action plans accordingly.

Is Google a DSP?

  • Technically speaking, yes Google Ads is a DSP. It differs from all the other DSPs due to the fact that it only sells its own Google inventory.

What is DV360?

  • Previously known as DoubleClick Bid Manager, DV360 or Display and Video 360 is Google’s DSP (demand-side platform) for buying ad inventory. It facilitates the publishers and advertisers to transact online media buys.

What are Programmatic Platforms?

  • A programmatic advertising platform facilitates digital marketers and advertisers to manage their digital campaigns through automation. This is software that assists in ad buying and placement, insights, campaign analytics and so forth. SmartyAds, TubeMogul, Simpli.fi, MediaMath are examples of well-known programmatic platforms.

What is a DSP in Advertising?

  • DSP (short for demand-side platform) is one of the two components of programmatic digital advertising.

Who are the Biggest DSPs?

  • MediaMath, Amazon (AAP), DoubleClick, LiveRamp and Choozle are examples of renowned DSPs operating in the market today.

How Does a DSP work?

  • A DSP is used by the advertiser in order to make bids on its behalf and buy ads on a publisher’s website or an app, via a defined mechanism that takes place as soon as a user lands on the publisher’s website page. A good DSP is known by its ability to provide access to advertising opportunities on numerous apps and websites.

In layman’s terms, a DSP allows an advertiser to get the best ad space on a publisher’s website or mobile app using the information it gets from the SSP of the publisher.

What is Programmatic Targeting?

  • With the aim of achieving the best results, programmatic requires the efficient use of ‘targeting’ tactics. No advertiser would want to pay for ads that do not bring a lot of value to their business, would they? To get them only the potential leads for their product or service, the target audience is segmented accordingly using data such as demographics, interests, behavior, age group, etc.

What is Unsold Ad Inventory?

  • All those ad impressions that have not been sold to the advertisers are categorized as ‘unsold ad inventory’. Various strategies can be used in order to gain the maximum output from these unsold ads.

What is a Programmatic Buy?

  • Programmatic buying is a combination of various automated actions via DSPs, SSPs, and DMPs. Once the DMPs (data management platforms) analyze the data available to them through cookies, digital marketers have a whole lot of information based on which they can devise digital marketing strategies and make meaningful decisions for a business.

Is PPC Programmatic?

  • No, PPC is not yet programmatic, however, the latter can increase PPC traffic to considerable amounts by adding new potential leads to its conversion funnel.

Our Final Thoughts

Considering the ever-increasing dependency on online ads and marketing, it’s high time for businesses to understand the potential leads that they might not be converting right now due to the gaps that programmatic advertising can fill for them. It’s not everyone’s cup of Joe to reach out to the advertisers and still be able to make optimum ad impression sales directly.

Programmatic software and mechanisms take away a lot of the hassle and open new horizons as far as your digital marketing goals are concerned.