Programmatic buying is when an ad is sold and targeted via an automated system.
Programmatic buying employs user profiles that can be used to identify the interests of, for example, a website’s visitor. The available ad space is sold in real-time to the bidder with the highest value. This doesn’t always have to be the bidder with the highest bid. The space can, for example, also be given to the bidder with the most clicks on their ad, or the bidder whose ad best matches the site’s content.
A benefit of programmatic buying is its flexible nature. For instance, you can start a campaign off on a large scale and while it’s running, see what works and what doesn’t. You can also see if there are certain times or regions that yield a better response, or if certain target audience segments show a better result. Based on this evaluation you can fine-tune your campaign goals and, as a result, only pay for the most effective advertisements. This marks a major difference with the traditional way of buying where you pay in advance for having managed an agreed upon amount of advertisements, within a certain medium or channel
Programmatic buying has four ways of buying:
- Preferred Deal: no auction model, fixed CPM rates, no guaranteed placement
- Programmatic Guaranteed: geen veilingmodel, vaste CPM-tarieven, gegarandeerde ruimte
- Private Exchange: organised by one or more publishers who can control the lowest CPM rates, Real Time Bidding (RTB), only select advertisers (on invite)
- Open Exchange: Real Time Bidding (RTB), variable CPM rates, open to all advertisers