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Exploring the ecosystem of programmatic advertising - Adsmurai
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Exploring the ecosystem of programmatic advertising: Comparison with traditional advertising and key trends

In recent years, programmatic advertising has been one of the most recurring themes in the world of digital advertising. An increasingly popular option, as brands seek more efficient and effective ways to reach their target audience.

In addition to signifying an evolution in the buying and selling processes, it has also led to a revolution in strategies that generates new professionals and updates classic concepts in the advertising field.

 

TABLE OF CONTENT

 

Introduction to programmatic advertising

Programmatic advertising and traditional advertising are two different methods for buying and distributing advertising. Both options seek to boost the presence of a business on the Internet and try to increase both the conversion rate and the visits to the website.

Programmatic advertising has evolved a lot in recent years, but its origins date back to the beginning of the 21st century. At that time, advertisers began to see that automation technologies could be used to buy online advertising space more efficiently. 

The first form of programmatic advertising was ad buying through automated ad networks, which allowed advertisers to buy space on multiple websites at once. These networks offered bids for ad space, in the form of an auction, and websites chose the highest bid.

In 2007, demand-side-platforms (DSPs) were introduced, allowing advertisers to buy these spaces in real time via auction. This helped advertising reach a wider audience with greater accuracy and effectiveness.

Programmatic advertising has continued to evolve since then, with the introduction of new technologies and tools, such as Data Management Platforms (DMPs) and artificial intelligence. 

Understanding the programmatic advertising ecosystem is very important, as it helps to improve the efficiency, transparency, control and results of advertising campaigns.


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Programmatic vs. traditional advertising  

Programmatic advertising and traditional advertising are two ways of contracting advertising on the Internet, the former being an evolution of the latter thanks to technology.

Traditional advertising deals with traditional media such as television, radio, newspapers, and billboards... where ads are bought and placed directly by the advertiser or through an advertising agency. 

Programmatic advertising, on the other hand, is the purchase and distribution of online ads through automated platforms. Instead of buying ads directly, advertisers can use a platform that uses data and technology to place ads on websites, apps, and other digital media. These ads can be targeted and personalized, which helps advertisers target specific audiences based on their interests and behaviors.

Here are the main differences between programmatic and traditional advertising:

  • Buying audiences VS buying spaces: In programmatic advertising you are buying audiences, that is, you are paying for contact with this and for visibility within the target audience. On the other hand, traditional advertising is focused on spaces, on renting or buying a promotional support within several platforms.

  • Buying process: Traditional advertising is bought through direct sales channels, while programmatic advertising is done through technology and automated platforms, winning the bid that puts it on sale.

  • Target audience: Traditional advertising is directed to a general audience, while programmatic advertising is directed to specific and more personalized audiences through the use of data and technology.

  • Flexibility: Programmatic advertising is more flexible, as advertisers can change and adjust in real time, which helps us to be more responsive and adaptive according to the changing needs that exist in the market.

  • Costs: Programmatic advertising is more cost-effective than traditional advertising, as it is much more efficient and has greater precision in targeting audiences, which means that advertisers can get a better return on advertising investment.

PROGRAMMATIC ADVERTISING

Advantages

Disadvantages

Increased accuracy in target audience segmentation

Risk of lack of control over where advertisements are displayed

Optimization of advertising investment

Dependence on external technology and platforms

Real-time data access

Possibility of target audience saturation

Greater reach and coverage

 



TRADITIONAL ADVERTISING

Advantages

Disadvantages

Greater control over ad placement

Reduced accuracy in target segmentation

Higher visual and emotional impact

Difficulty in measuring ad effectiveness and ROI

Possibility of generating branding and brand recognition in the long term

Higher cost compared to programmatic advertising

Reduced dependence on external technologies and platforms

Reduced range and coverage



 

The programmatic ecosystem

New technologies have turned digital advertising into a constantly evolving multi-channel ecosystem. The programmatic advertising ecosystem is complex and consists of several players, technologies and processes. Below is an overview of the key components of the programmatic advertising ecosystem:

  • Advertisers: Companies or individuals who wish to publish ads. They can be direct advertisers, such as brands or advertising agencies, or programmatic advertisers, who use automated tools to buy and distribute ads. 

  • Publishers: Owners of the websites, apps or other digital spaces where ads are displayed. Publishers can sell their ad inventory directly to advertisers or use some programmatic platforms to automate the sales process.

  • Ad Exchange: Digital marketplaces where advertising space is bought and sold. These exchanges allow advertisers to bid on available ad inventory, while publishers can sell their ad space to the highest bidder.

  • Demand-side platforms (DSPs): Tools used by advertisers and agencies to buy advertising space in real time. Demand-side platforms connect with ad exchanges and allow advertisers to target audiences and show these ads to those who are interested.

  • Supply-side platforms (SSPs): Tools used by publishers and ad networks to sell ad space in real time. Bidding platforms connect with ad exchanges and allow publishers to maximize the value of their inventory by selling it to the highest bidder.

  • Data Management Platforms (DMPs): Tools used to collect, store and analyze data about audiences and ad performance. These platforms help us make informed decisions about how we can optimize ad campaigns.


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The programmatic advertising ecosystem has several players working together to automate the buying and selling of online ads. Advertisers use demand-side tools to buy ad space, while publishers use supply-side tools to sell their ad inventory. These exchanges connect buyers and sellers, and data management platforms help us improve the effectiveness of advertising campaigns.


 

Key trends in programmatic advertising

As an artificial intelligence model, there are some key trends to be aware of, such as:

  • Real-time bidding: Real-time buying and selling of advertising through the online auction. Allows advertisers to reach target audiences efficiently and effectively. 

  • Programmatic mobile advertising: Allows advertisers to reach their audiences while they are on the move, which increases the effectiveness of advertising campaigns. 

  • Native advertising: This is the form of programmatic advertising that integrates with editorial content. It helps advertisers reach consumers effectively, as it is non-intrusive. 

  • Programmatic video advertising: With the rise in popularity of online videos, they have become an important part of programmatic advertising.

  • Pre-bidding: A form of programmatic advertising that allows advertisers to buy ads on websites and apps in real time, effectively reaching their audience.

  • Direct programmatic advertising: Allows advertisers to buy ads directly from website and app publishers, giving them more control over where their ads appear and what audience they are reaching.

Programmatic advertising is a key trend in the digital advertising world. It uses algorithms and technology to automate the process of buying and selling online advertising, allowing for more precise targeting and more efficient delivery to the right users at the right time. 

At Adsmurai we offer the Managed service where we value informed and non-probabilistic data, which allows us to make decisions based on real information about the target we are working with.





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