Programmatic advertising has changed the way businesses buy digital media.
Rather than manually negotiating placements with publishers, advertisers can use automated technology to buy advertising space and reach relevant audiences in real time.
Today, programmatic advertising powers a large proportion of display, video and Connected TV advertising, helping businesses improve targeting, optimise budgets and scale campaigns more efficiently.
While the technology behind programmatic advertising can seem complex, the concept itself is relatively straightforward. In this guide, we’ll explain what programmatic advertising is, how it works and why it continues to play an important role in digital marketing strategies.
What is programmatic advertising?
Programmatic advertising is the automated process of buying and selling digital advertising inventory.
Traditionally, advertisers would negotiate directly with publishers to secure advertising placements. This process could be time-consuming and often lacked flexibility when it came to targeting specific audiences.
Programmatic advertising streamlines this process by using technology to purchase advertising space automatically. Instead of buying placements manually, advertisers can use data and algorithms to determine which audiences they want to reach and how much they are willing to pay for an impression.
This automation allows businesses to deliver adverts to highly relevant audiences across websites, apps and streaming platforms at scale.
Today, programmatic advertising can be used across a variety of channels, including:
- Display advertising
- Video advertising
- Connected TV (CTV)
- Audio advertising
- Digital Out of Home (DOOH)
As a result, programmatic advertising has become one of the most widely used forms of digital media buying.
How does programmatic advertising work?
Programmatic advertising can seem complicated. However, the process becomes much easier to understand when you break it down into the key technologies involved.
Demand-Side Platforms (DSPs)
A Demand-Side Platform, or DSP, is the software advertisers use to buy advertising inventory. DSPs allow marketers to manage campaigns, set budgets, define audience targeting and monitor performance from a single platform. Rather than purchasing advertising space individually from multiple publishers, advertisers can use a DSP to access a wide range of inventory through one system. Popular DSPs include Google Display & Video 360 (DV360) and The Trade Desk.
Supply-Side Platforms (SSPs)
While advertisers use DSPs to buy inventory, publishers use Supply-Side Platforms (SSPs) to sell it. An SSP helps publishers manage available advertising space and connect with potential buyers. The platform allows publishers to make their inventory available to multiple advertisers simultaneously, helping maximise competition and revenue opportunities.
Real-Time Bidding (RTB)
Real-Time Bidding (RTB) is the auction process that underpins much of programmatic advertising. When a user visits a website with available advertising space, an automated auction takes place in milliseconds. Advertisers evaluate whether that particular user matches their targeting criteria and submit bids accordingly. The highest bidder wins the auction and their advert is displayed.
The entire process happens almost instantly and can happen thousands of times every second across the internet.
- A user visits a website.
- Advertising space becomes available.
- Advertisers bid for the impression.
- The winning advertiser’s advert is shown.
What are the benefits of programmatic advertising?
Programmatic advertising offers several advantages over traditional media buying methods.
Improved audience targeting
One of the biggest benefits of programmatic advertising is its targeting capabilities. Rather than showing adverts to a broad audience, businesses can focus on users who are more likely to be interested in their products or services.
Advertisers can target audiences based on factors such as:
- Demographics
- Interests
- Online behaviour
- Location
- Device type
- First-party customer data
This helps improve relevance and reduce wasted ad spend.
Greater efficiency
Programmatic advertising automates many of the manual processes associated with media buying. Instead of negotiating placements individually, advertisers can access multiple publishers and audiences through a single platform. This allows campaigns to be launched more quickly and managed more efficiently.
Real-time optimisation
Unlike traditional advertising channels, programmatic campaigns can be adjusted while they are running. Advertisers can monitor performance in real time and make changes to budgets, targeting or creative assets based on the results being generated. This flexibility helps maximise campaign performance and return on investment.
Scalability
Whether you’re targeting a niche audience or running a large-scale awareness campaign, programmatic advertising offers the flexibility to scale activity up or down depending on your objectives and budget. This makes it suitable for businesses of all sizes.
What types of ads can be bought programmatically?
Programmatic advertising is no longer limited to display banners.
Today, advertisers can use programmatic technology across multiple formats and channels.
Display advertising
Display advertising remains one of the most common forms of programmatic media buying. These adverts appear across websites and apps, helping businesses increase brand awareness and drive website traffic.
Video advertising
Programmatic video advertising allows brands to reach audiences through online video content. This can include in-stream adverts shown before or during videos, as well as placements across video-sharing platforms and publisher websites.
Connected TV (CTV)
Connected TV refers to television content viewed through internet-connected devices and streaming services. As more consumers move towards streaming platforms, CTV has become one of the fastest-growing areas of programmatic advertising.
Audio advertising
Programmatic audio advertising allows businesses to reach audiences through music streaming platforms, digital radio and podcasts. Audio formats can be particularly effective for building brand awareness and reaching users during moments where visual advertising may not be practical.
Digital out of home (DOOH)
Programmatic DOOH allows advertisers to buy and manage outdoor advertising inventory automatically, offering greater flexibility than traditional outdoor media buying. Campaigns can be activated, adjusted and scaled in real time, helping brands reach audiences in specific locations at the moments that matter most.
Programmatic advertising vs traditional media buying
The main difference between programmatic advertising and traditional media buying is automation. Traditional media buying often involves direct negotiations between advertisers and publishers, manual campaign management and fixed placements.
Programmatic advertising automates much of this process, allowing advertisers to buy impressions individually and make data-driven decisions in real time. This typically results in greater flexibility, improved targeting capabilities and more efficient budget allocation. For many businesses, programmatic advertising provides a more scalable and measurable approach to digital advertising.
Is programmatic advertising right for your business?
Programmatic advertising can be an effective option for businesses looking to reach targeted audiences, improve efficiency and scale their digital marketing activity. However, success depends on having a clear strategy, the right audience insights and effective creative assets. When used correctly, programmatic advertising can help businesses increase brand awareness, generate leads and drive sales across a variety of digital channels. As your business begins to scale, looking outside of ‘walled gardens’ advertising channels, programmatic advertising is likely to become a key component of a successful digital marketing strategy.
Looking for support with programmatic advertising?
Programmatic advertising can unlock significant opportunities for businesses, but achieving consistent results requires the right combination of strategy, targeting, creative and optimisation. At Embryo, our paid media specialists help businesses plan, launch and manage programmatic advertising campaigns across display, video and Connected TV channels. From audience strategy and campaign setup to ongoing optimisation and performance reporting, we work closely with brands to ensure advertising budgets deliver measurable business outcomes. If you’re looking to explore how programmatic advertising could support your wider digital marketing strategy, get in touch with our team today.
