Thinking of programmatic? What you should know

Programmatic is being used by more marketers to bring efficiency and efficacy to their advertising efforts. It is predicted that 83% of all display advertising will be purchased programmatically by 2017.

However, more than half of the marketers surveyed by the Boston Consulting Group in July 2015 said their understanding of programmatic was very poor, poor or average. While marketers are increasing their adoption of programmatic technology, understanding of exactly what it is and how it works remains unclear.

Programmatic is the automation of process and decisions, driven by data and powered through machines. What does programmatic mean in the context of media buying? Recall the days when stocks were traded via phone and fax. Buying advertisements used to happen the same way.

As you can imagine (or remember), this process was incredibly manual and time-consuming. Programmatic evolved as a way to make media buying more effective and efficient. While programmatic isn’t a strategy, it can be used as the key part of an effective digital advertising plan. For instance, programmatic can be used for audience targeting and segmentation and the execution of premium ad buys.

Crucially, programmatic doesn’t mean real-time bidding (RTB) or automation although it does encompass both. The RTB protocol is used to employ media buying within programmatic technology, and programmatic does allow you to automate certain functions of technology based media buying.

How does programmatic media buying work?

  • Demand-side platforms (DSPs) connect directly to inventory and are the de facto way in which programmatic buying occurs. Conversely, supply-side platforms (SSPs) work on behalf of media publishers trying to maximise the sale of their inventory.
  • In the mid-1990s, ad networks emerged as a way to bring together like-minded, affi nity based sites in a network model. You no longer had to go to multiple individual publishers; rather, you accessed a group of several publishers. With this model, advertisers could then reach more of the fragmented internet audience through aggregated inventory.
  • From there evolved ad exchanges, a concept pioneered by Right Media (a company bought by Yahoo! in 2007) that allows media buys to be executed in a technology-based way across an exchange. Each individual impression is auctioned in real-time and sold to the highest bidder, removing complexity and consolidating efforts for both advertisers and publishers.
  • Real-time bidding provides efficiencies in both cost and targeting ability by enabling the purchase of display inventory on a per impression and per-user basis through a rapid bidding system. The outcome: the ability to show the right ad to the right customer at the right time for the right price.

Getting started

If you’re a marketer who wants to invest in a digital-first way of advertising, adopting technology is imperative. The programmatic adoption curve is happening and there’s no better time than now for your organization to jump in and use the technology. As you consider your approach to programmatic media buying, keep in mind these four key areas that are crucial to informing your decisions.


Ask yourself: “Do you feel you have the right internal or external resources to begin your journey with programmatic?” Programmatic raises questions internally across publishers, brands and agencies. Be honest about your company DNA. Are you a DIY-type business with technical minds in-house that can fully execute programmatic buying or are you willing to invest in developing that talent? Will you require an external partner to implement and manage programmatic for you?


You must understand from whom you can source data, because as you are building programmatic into your digital marketing plan, you should also be crafting a data strategy. Learn all you can about the different types of data and how each might fi t into your marketing efforts.

  • First-party data is your own data from your site and your customer files. This data tells you about the known visitors to your website and customer base.
  • Second-party data is another brand’s first-party data. This data can be used to prospect for new customers and re-target current or lapsed ones through finding affinity – and behavioural-based points. Second-party data leads you to customers you don’t yet know.
  • Third-party data is typically a large volume of data you pay for to access for media-buying purposes. You layer this data with first-party or second-party data to attain audience reach you can’t quite get on your own.

Once you understand the data landscape, you can determine the internal and external resources you need to grow this portion of your programmatic efforts.


The path to purchase is now varied and incorporates a range of channels your target customer might use at any given phase of the buying cycle. A consumer might hit the awareness stage on a smartphone, get to consideration on a laptop and purchase via a tablet.

Each channel isn’t created equally. You can’t simply employ a strategy for display on a desktop and use the same data profiling and banners for your other channels. As you employ the next steps in your digital marketing strategy, you need to think about which media channels you will combine and how you will use them in different ways.

  • Consider the consumer experience. For instance, you’ll need to determine how you will reach the consumer who works from a laptop during the day, but comes home and plays on their tablet.
  • Adapt your messaging to account for these differences in consumption across channels.
  • Develop a strong attribution model that will prepare you to conquer these cross-channel consumers.


Programmatic and today’s evolving advertising technology now deliver the ability to test everything. You can test across channels, creative units, different audience buckets, targeting techniques and more, and run different strategies against each other to optimise. Consider these points as you develop your testing plan.

Always be testing – either internally or externally. Test creative elements within audience segments and across screens and devices. Using A/B testing will help you determine which creative works best for different channels.

  • Fully leverage analytics and insights – you can do this through constantly running and re-running campaigns to access untapped data streams, and then cycle and iterate so you understand what worked and didn’t work.

This was a sponsored post by Mediamath.