Programmatic Media Buying: Everything You Need to Know About Buying Programmatic Ads

Macy is a Content Writer at WebFX. With a Content Marketing Certification, she's an expert in crafting pieces filled with the facts about all things digital marketing. You'll find many of her pieces featured on UpCity's Top Digital Marketing Articles of the Week. When she isn't clacking her keys, she's wondering why her dog is so cute. Follow her on Twitter @iinfinitestorm.

Are you looking for a way to advertise to prospects interested in your business?

Paid advertising is an excellent strategy to help your business earn more qualified leads and grow your online presence. Display advertising, in particular, is a great way to advertise your business on websites your audience visits.

With programmatic media buying, you can make that process even more accessible.

Keep reading to get answers to your questions, including:

  • What is programmatic media buying?
  • What are the components of programmatic media buying?
  • What types of programmatic ad buying are there?
  • How do programmatic ads work?
  • What are the benefits of buying programmatic ads?

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Programmatic media definition

What is programmatic media buying? Programmatic ad buying is the use of automated technology to help your business buy ad space. It utilizes data and algorithms to help you serve your ads to the right people at the right time and in the right place.

 

 

3 components of programmatic media buying

When you look at programmatic ad buying, you’ll find that three core components make it up:

  1. Sell-side platform (SSP)
  2. Demand-side platform (DSP)
  3. Ad exchange

Let’s look at these three components in more detail.

1. Sell-side platform (SSP)

The SSP is the end where publishers sell their ad space. Companies can offer up advertising space on their site for buyers to showcase display, mobile, or video ads.

 

Display ad featuring boots and moccasins

 

The companies that want to sell ad space are added to the sell-side platform, which gives advertisers a vast array of options for advertising their business. These ad spaces are automatically sold to buyers in real-time, making it a quick and easy process for buyers to find sellers who have available ad space.

2. Demand-side platform (DSP)

Another component of programmatic ad buying is the DSP. This part is where interested advertisers go to find ad inventory to market their businesses. Companies can purchase ad space on the publisher’s website to help them reach people interested in their company.

The DSP enables advertisers to target their audience on the right sites using data like location, age, and previous behaviors online.

3. Ad exchange

The last component of programmatic media buying is the ad exchange. The DSP connects to the ad exchange to process the buying and selling of ad space. This part enables advertisers to choose and purchase their ad space.

The prices for the ad space are agreed upon here by the advertiser and publisher.

Types of programmatic media buying

Programmatic ad buying doesn’t have just one process — there are multiple ways to buy ads for your business.

Here are three types of programmatic advertising:

1. Real-time bidding

The first type of programmatic advertising we’ll look at is real-time bidding. Real-time bidding, known as an open auction, is available to any advertiser or publisher that wants to buy/sell ad space. Bids for these ads happen in real-time, and the company with the highest bid gets the ad space.

 

 

With this type of programmatic ad buying, you can bid for ad impressions and buy ads in bulk. While you have access to many websites and a large audience, you don’t know where your ads will appear. It means you run the risk of your ads appearing on sites you don’t want them to appear.

2. Private marketplace

With the private marketplace, your programmatic ads can only appear on the websites within this marketplace if you’re invited. The private marketplace is an invite-only market, allowing publishers to control which companies advertise on their site.

In a private marketplace, advertisers typically set aside premium ad spots to enable select advertisers to have those spots. They can set aside the ad space to attract advertisers who will pay top-dollar for premium ad space on their side.

Additionally, advertisers always know where their ads appear in this marketplace, which offers a distinct advantage over real-time bidding.

3. Programmatic direct

Another type of programmatic ad buying is programmatic direct. With this type of ad buying, there is a direct sale of ad space between the buyer and seller. These companies don’t use the ad exchange but rather agree on terms for advertising on the publisher’s site.

This marketplace operates like a private marketplace because you must receive an invitation from the publisher to advertise on their site. The only difference is that your company works with the publisher to determine the cost rather than leaving it up to bidding and auctioning.

With programmatic direct, you pay a fixed cost for advertising on a publisher’s site.

How do programmatic ads work?

So, how does the bidding and advertising pricing work when you do programmatic ad buying? Here’s how the process occurs if you’re using real-time bidding or private marketplace for your display ads:

  1. Someone clicks on a website with ad space
  2. The ad space available on the owner’s site goes up for auction (SSP)
  3. Eligible advertisers bid on the ad spot (DSP)
  4. The highest bidder wins the ad space
  5. Ad appears on the website for the user

 

Display ad for RetailMeNot

 

This entire process happens in milliseconds without the visitor ever knowing an ad auction is happening.

3 benefits of using programmatic ad buying

Now that you know the basics of programmatic media buying, it’s time to look at the benefits of programmatic ad buying. Here are three quick benefits you need to know:

1. You reach a wider audience

With programmatic ad buying, you can reach a wider audience of leads interested in what you offer. This type of advertising supports multiple ad exchanges and networks, making it easy for you to broaden your reach and get your ads in front of people who want your products or services.

2. You can adjust your ads to perform better

One of the most significant benefits of programmatic advertising is that you can adjust your campaigns to perform better for your business. Once you launch your ads, you can analyze their performance to see if they drive results. Programmatic advertising offers reporting that helps you see if your campaigns are effective.

If your campaigns don’t perform how you like, you can adjust and optimize to improve them.

3. You can do everything automatically

One of the biggest benefits of programmatic media buying is that everything is done automatically. You don’t have to spend time figuring out which website to advertise on or make the arrangements to place ads. The algorithm does all the work for you, which makes it easy for you to manage your campaigns.

Get started with programmatic advertising

Programmatic ad buying is an efficient and effective way for your business to promote your products or services to interested leads. If you aren’t sure how to get started with programmatic advertising, WebFX can help.

We have a team of over 300 marketing experts who can help you promote your business. Our team knows how to craft ads that drive results — we’ve driven over $2.4 billion in revenue and over 6.3 million leads for our clients in the past five years alone.

To get started with programmatic media buying, contact us online or call us today at 888-601-5359 to speak with a strategist about our programmatic advertising services!

Bonus Reading: 8 Top Programmatic Platforms and How to Choose One
Bonus Reading: Programmatic vs. Display Ads: Definitions and Differences