There’s a buzzword flying around the advertising industry these days, one that has a value of nearly $15 billion in 2015. No, I’m not talking about #Kimye (not even close). I’m talking about #programmatic.

Heard of it? Yes. 

Know what it means? Yes…I think…maybe…kind of? No…not really.

…Don’t worry, you’re not alone.

Programmatic media buying is the hot new gossip in advertising. It’s new, it’s shiny, it’s mysterious and naturally, like with most gossip, everybody wants a piece of it. But does everybody understand what it is or why they want it? Not exactly.

Well fear not, my friends, for I am about to bring you into the inner circle, define what programmatic buying is, and explain why it is projected to account for over 25% of digital advertising revenue in 2015.

But let’s look away from the dollar signs for a minute, because programmatic media buying goes far beyond the colossal projected revenues associated with it. Programmatic represents the industry’s gradual adoption of a completely new way of buying digital media that could revolutionize and alter the way media across all mediums is targeted and purchased.

What is it?

Programmatic, by definition, is the data-driven, automated process of buying digital advertising. Gone are the days of exchanging phone calls and emails and IO’s with sales teams, now replaced by…well…acronyms.

Specifically: PMP, DSP and RTB. Also known as the driving forces behind programmatic ad buying.

If you love tech speak as much as me (note: sarcasm), then you’ll love these definitions even more:

Private Marketplace (PMP) is a marketplace where specific, premium publishers make their inventory available to a select group of buyers. Unlike the traditional site-direct buy, PMP’s offer buyers access to these inventories via ad exchanges called DSP’s.

Demand-Side Platform (DMP) is the software platform by which buyers purchase digital media within a PMP. DSP’s make the ad-buying process more efficient by allowing buyers to access 1^st and 3^rd party data that ensures them that the impressions purchased are delivered on the right sites, to the right audience and at the right time. Allowing this access to buyers eliminates the need for any humans to be involved in the buying process—no extra costs, no negotiation, no back and forth. Instead, ads are purchased via RTB.

Real-time Bidding (RTB) is the entirely transparent, auction-style method for buying and selling ad impressions in real time, like the stock market. A general assumption throughout the industry is: RTB=auction=low quality/remnant ad stock. However, with the rise of programmatic, a growing number of publishers are making their premium inventory available through PMP’s.

So, how does a buyer get their hands on this premium stock? We refer to age-old adage: it’s all about who you know.

How are we using it?

Here at G/L, we are “getting with the programmatic.” One thing we prioritize as an agency is the importance of implementing business practices that not only benefit and drive our work forward, but those that do the same for our clients’ brands. True, the programmatic waters are still a little murky, so we knew we needed to seek out a partner to help us navigate. One whose expertise in developing strategic programmatic buys would help us produce successful, optimized digital campaigns and see that our clients achieve their desired ROI. Enter Goodway Group.

Working with Goodway Group, we are able to cultivate digital media buys based on specific target audience parameters versus the traditional site-direct buy. Thus, for example, rather than assuming a clients’ regional customers are solely surfing regional sites (that often have a higher monthly premium restricting the overall reach and frequency of a campaign), we’re able to utilize rich data that tells us exactly where the people we want to target are, in real time, and serve them the message within milliseconds. In turn, programmatic also offers us the ability to access immediate reporting data to track campaign success and pause or augment the campaign based on ad performance. Insights like these effectively inform the campaign, our targeting and our creative.

In joining forces with Goodway, we are able to be a dynamic player in the ever-evolving world of digital media by adopting programmatic as a way to produce better, more strategic digital campaigns that provide our clients with the greatest impact and highest ROI. Removing humans from the process of ad buying allows us as an agency, along with Goodway Group, to make our primary focus optimizing clients’ campaigns and ensuring they are on strategy. 

Where is it going?

According to eMarketer, programmatic is the fastest growing area of online advertising. By 2017, it is predicted that programmatic media sales will account for 83% of all U.S. digital display ad spending. The trend is catching, however, and is predicted to represent 4% of U.S. TV budgets in 2015, increasing to 17% by 2019. We think it’s going to cause a pretty big shift in the industry, and we’re excited to be on board!

Want to learn more about how we’re working with Goodway Group in the developing digital landscape? Download your own copy of our webinar presentation, A Strategic Approach to Digital Media!

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