The Agency Guide To Programmatic Buying

Transcription

1 The Agency Guide To Programmatic Buying

2 Table of Contents 1. Introduction 2. Defining Programmatic Buying 3. How Does Real-Time Bidding Work? 4. The Benefits 5. The Challenges 6. Conclusion

3 The Agency Guide to Programmatic Buying Agencies must start embracing and investing in programmatic buying and commit themselves to it because programmatic buying is the future of online advertising. Agencies can no longer afford to let their clients (brands) take on the burden as their clients expect for them to be able to deliver a full and complete package, including their media buying strategies. And as is being predicted, programmatic buying will be essential to any digital marketing strategy. Introduction The vast majority of small and mid-tier agencies (about 94%) don t trust the concept of programmatic buying. Why? Simply because they don t understand it. Consequentially, their clients feel this high level of uncertainty and distrust that stems from this lack of understanding, causing them to feel as if they have no choice but to manage their programmatic buying efforts inhouse. According to a recent study done by Adap.TV, brands report that 60% of their budgets are now focused on programmatic buying, as opposed to agencies, which are allocating just 38% of their budgets to programmatic. It s time to stop this the stigma that Agencies have attached to programmatic as programmatic is set to double from this year s $10 billion to $20 billion in 2016 and Agencies simply can t afford to risk losing it all.

4 The Agency Guide to Programmatic Buying Defining Programmatic Buying Let s make it simple. All programmatic buying is, is simply automating the process of buying or selling online media at a massive scale; a way of using technology to buy and sell media. It s about bidding on an advertising inventory source in real-time for the opportunity to show one specific ad to one specific consumer in one specific context. It takes what takes a human to do in several hours and does it in less than 200 milliseconds and much more effectively. One of the key aspects of programmatic buying is real-time bidding (rtb) and unlike traditional online display advertising, which proved too inefficient and costly (for all players in the field), real-time bidding shows the right ads to the right people at the right time. The real problem in regards to the traditional methods were that advertisers were using a CPM model to buy their impressions; which means you are buying a bulk of impressions for the same price per unit, even though each impression has a different value. For publishers, this was inefficient because they were unable to sell up to 70% of their inventory, and the inventory that they did sell was sold for way below the market value. So real-time bidding appeared in the picture and things began to change for the better.

5 The Agency Guide to Programmatic Buying Real time bidding revolutionized the way online media is done because it allowed for advertisers to purchase their inventory based on individual impressions through an automated bidding system. This means that the publisher is getting the most bang for their buck and that the advertiser doesn t need to worry about reaching unwanted audiences.

6 The Agency Guide to Programmatic Buying How Does Real-Time Bidding Work? Let s make it simple. There are 4 major players in real-time bidding: Demand Side Platform (DSP) The DSP enabled advertisers to gain access to multiple sources of inventory and makes the bid for them automatically, based on buying parameters the advertiser has preset. Publisher This one s easy; the publisher supplies the inventory. In the earlier days, publishers would only supply remnant inventory to the DSP s, but as demand began to grow from the advertisers, publishers are now supplying their most premium inventory as well! Supply Side Platform (SSP) The SSP is a tool which helps publishers manage their inventory. Ad Exchange This is the tool that actually connects the advertisers with the publishers and vice versa. It facilitates in the purchasing of inventory in real-time milliseconds before a page loads.

7 The Agency Guide to Programmatic Buying Without getting too technical, here is the most basic process of RTB: The publisher provides inventory to their Ad Exchange The advertiser sets their buying criteria on the DSP, which will eventually place the bid on each impression on behalf of the advertisers. The value of the bid is based on the value of that individual impressions, which has been predetermined by the advertiser s criteria with the DSP; this bidding process ensures that the publisher is getting the maximum price for their inventory, as dictated by market demand Once the bidding is completed, the impression goes to the highest bidder and their ads are served on the publisher s site!

8 The Benefits The benefits for agencies are endless. Programmatic buying allows for agencies to conduct large scale transactions.. It allows for agencies to enhance their targeting capabilities so that their impressions will reach the right audience, at the right place, and the right time, ultimately increasing their ROI. It is more cost effective for agencies as they are not wasting their This business paper was produced by AdClarity, the leading digital media buying solution. We invite you to learn more and start your free trial impressions and ad dollars www. The reach and frequency is much more effective and targeted Gives agencies complete control over their campaigns performance All of this in turn enables the agencies to deliver better results to their clients Programmatic buying let s agencies consider much more websites than any human could.

9 adclarity.com In addition to the direct benefits of programmatic buying, there are also several indirect benefits, such as insights, that agencies can gain from it. Campaign insights- Find out which campaign works best, when it works best, where it works best, and through what channel it works best. Consumer insights- Discover who your target audience really is and what it is that makes them your top customer in addition to multivariate insights on demographics. Creative insights- See which creative works best for which campaign and in which context. Diversify your campaigns based on the type of consumer you are targeting and where you are targeting them. Plan your bids according to these insights and make sure that when there is a publisher that is really worth it, you get the spot!

10 Conclusion Make no mistake, programmatic IS the future of online media. It won t be going away and agencies that fully embrace and commit themselves to it now will surely reap the rewards in the future. It s time for Agencies to step it up a notch and begin to make the technological and marketing changes needed in order to achieve an effective and ideal programmatic buying strategy. Sources: This business paper was produced by AdClarity, the leading digital media buying solution. We invite you to learn more at: