Programmatic Buying

Programmatic buying describes the automated purchase of digital ad inventory in real time through technical platforms. Instead of a classic one to one contract between advertiser and publisher, a demand side platform handles the purchase by submitting a bid per impression. The decision whether the bid wins is taken in milliseconds while the user's page is loading.

Components involved

On the advertiser side sits the demand side platform that submits bids, on the publisher side the supply side platform that offers inventory. Intermediaries called ad exchanges bring both sides together in an auction. Data management platforms supply audience data with which the demand side platform decides whether a bid is economically justified. The whole setup runs fully automatically within a few seconds.

Pros and cons

Programmatic buying enables precise targeting, dynamic budget control and fast scaling. Risks are ad fraud, brand safety issues, opaque cost chains and inventory share delivered at low viewability. Advertisers should regularly monitor brand safety filters, viewability tracking and bot traffic share, otherwise a substantial part of the budget disappears into unused delivery.

Practical use

In day to day marketing, programmatic buying dominates the entire display, native and video ad inventory in the open web. Anyone running performance campaigns is practically always working through programmatic channels, even when this is not visible day to day. Conscious management of whitelists, bid strategies and optimisation goals decides whether budget is spent efficiently or inefficiently.