Decoding Programmatic Buying Techniques

If you are in the digital advertising space then you have probably heard the term “programmatic advertising”. If not, you might still be wondering what exactly is programmatic advertising? While that’s covered in our previous blog post here, this one is dedicated to introducing you to the different types of programmatic buying – Programmatic Direct, Private Marketplace (PMP) and Real-Time Bidding (RTB)

1. Programmatic direct:
Programmatic direct deals, also known as programmatic guaranteed deals, are negotiated directly between buyer and seller. In this, the advertisers know exactly the kind of audience and content they want, and when they want it. The flight/ run time (start-end dates) and pricing are pre-negotiated with the seller. However, additional filters, audience targeting, and frequency caps can be applied during the run time.

2. PMP deals

PMP deals are invite-only deals in which the publishers send exclusive invites to select advertisers. In this, publishers sell their premium ad inventory to the selected buyers. The buying and selling of the inventory are done programmatically. It is advantageous to both advertisers as well as to the publishers. It allows advertisers to have their ads placed in premium inventory, and get complete control over where their ads are placed. This helps in addressing the brand-safety issues. It also thwarts ad frauds, thus saving their precious ad dollars. Publishers, on the other hand, get premium prices on such deals, thereby increasing their revenue.

PMP deals are of two types:

• Preferred deals –
  Preferred deals bypass the auction completely. The inventory is sold at a negotiated minimum CPM to the selected advertiser. Publishers get a stable revenue stream while the advertisers get a priority and exclusive first-look at the inventory before it is made available to others in a private auction, and then in an open auction.
• Private Auction –
  These are similar to an open auction, except the participation is invite-only and is restricted to only selected advertisers. These advertisers then bid on that inventory and the highest bidder amongst those wins the ad impression. The publisher decides a floor price above which advertisers have to bid. It is beneficial to advertisers as they get access to premium inventory and also there is less competition as compared to open auction, while the publishers get a variety of advertisers, as against the monotonous user experience.

3. Real-time bidding:

RTB is an environment in which advertisers can display ads only to a particular audience that they are interested in, rather than losing impressions on uninterested audiences. Advertisers bid for these impressions in real-time. This is achieved by using complex algorithms, and machine learning on users’ data to ensure ads are delivered to the right people at the right time.

Many times, advertisers think that programmatic advertising is quite esoteric and complex. They often get confused while deciding which media buying technique is the best fit for their requirements. We have tried to clear out all that confusion in this blog. We hope it helped!