The Term 'Programmatic' in Online Advertising

Date:   Tuesday , June 21, 2016

Headquartered in Mumbai, Vertoz is a leading programmatic advertising company that offers engaging & innovative advertising and monetization solutions to a vast clientele of the world\'s top advertisers and publishers

When we talk about online advertising, we talk about the advertisements that we see on various websites while surfing on the internet. We come across various types of flashy or animated banner and video advertisements. The online advertising ecosystem is a networked community of hundreds of companies linked together to place advertisements of different categories on different pages of the internet.

There are thousands of ad tech companies present globally acting as a mediator between the publishers and advertisers providing online advertising solutions and services. The major role that these ad companies play is to help publishers earn money from their website and help advertisers to reach the right audience.

Ad tech companies have been providing ad solutions to customers through various methods and with the use of available technology. But not all these companies around the globe use programmatic technology to cater to the needs of their clients. Programmatic in India is still in its nascent stage and there are very few companies who actually have their own advertising technology.

Integration of Programmatic In Online Advertising

So, when we say \'Programmatic\' what do we actually understand from the term? A common assumption can be that various programs are being run for an advertisement to work online or it is a technology that helps make online advertising simpler.

Programmatic advertising, also known as programmatic marketing or media, consists of automated media buying, placement, and optimization of digital advertising according to certain business rules, where both supply and demand partners are in fact free from human intervention. This process occurs through the help of Data Science and Real Time Bidding (RTB) programs used for online display, video, native and mobile advertising. Data Science technologies have highly developed algorithms that give them the ability to analyze data and process things in real time.

What is RTB?

When a bid request is raised for an impression by an SSP (Supply Side Platform) for their publisher\'s content consumer, DSPs (Demand Side Platform) receive the request and matches it to the advertisers\' targeting requirement by tapping into the captive and Data Management Platforms (DMP) data source. The advertiser with the highest bid campaign wins the bid and his ad/creative is displayed to the consumer on the publisher content. All of this process happens in real time within a time frame of 200 milliseconds through an auction process called Real Time Bidding (RTB).

Being a part of programmatic advertising, RTB standard helps in buying and selling of ad inventory on a per impression basis through a programmatic auction process. Real Time Bidding standards introduced by Interactive Advertising Bureau (IAB) named as OpenRTB, has greatly helped many ad tech companies around the world to advertise programmatically.

The Challenges

Many challenges have grown around online advertising, making it hard to advertise on the internet. The major challenge that online advertising is dealing with are ad fraud and ad blockers. Ad fraud is one of the primary reasons why some advertisers are hesitant to try out programmatic campaigns. Another issue is ad blockers. Many internet users are using ad blockers to block ads when they are surfing on the internet. Ad blockers have proved to be quite a challenge for the online advertising industry.

Many fraud detection companies have come up over the year tackling this problem of Ad fraud and helping the publishers and advertisers to get genuine impressions and premium inventories. To deal with the issue of ad blockers, many websites hide their content if the ad blocker is active on the user\'s browser. The content can only be viewed when the user deactivates the ad blocker. There are many other counter measures been taken by companies to make online advertising easy.

Impact of Programmatic Advertising

According to eMarketer, the U.S. programmatic digital display ad spend will reach $22.10 billion this year. While in India, as per LiveMint, the digital advertising will account for 12.7 percent of all ad spending.

India has become a huge market for advertisers to target 462 million people using the internet. Programmatic can really help in targeting these audiences based on interests, gender, age group, geography and other aspects, helping ads to reach the right audience. Programmatic advertising in India is growing at an extensive rate. It is time Indian marketers adopt it and take it to the next level. With many influential ad tech companies in the country booming, programmatic advertising can help India be the second largest market after U.S. for online advertising.

Think Programmatic

With programmatic advertising projected to account for 50 percent of digital ad sales by 2018, we believe now is the time for traditional advertisers to move to online programmatic advertising and focus more on various methods of online advertising. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cost effective. It has evolved a lot over the years and is taking the online advertising market by storm. With new improvements and upgrades in the programmatic method, it is certainly the future of all forms of advertising.