Programmatic advertising uses algorithms and artificial intelligence to automate the real-time buying of ad space on digital channels, like websites, social media platforms and mobile apps. And, this all happens in the blink of an eye.

Today, the majority of digital advertising is traded and managed programmatically. So, it’s vital to have a basic understanding of how this works…

The programmatic process starts when a visitor lands on a digital channel…

This could be a web page, a social media platform or a mobile app - any digital channel which includes space designated for advertising. If this space isn’t negotiated through a direct deal, then it can be sold through an auction process to the highest bidding advertiser.

In this process, criteria such as demographic, location and behavioral data all come together to determine which ad should be shown when a visitor loads a web page or other channel. When the ad is shown, this is known as an impression.

Mobile is a heavily used programmatic channel, where ads can be triggered by a phone’s location to reach users in real time, and in situations where people are most likely to engage with them. This means that mobile ads generally require less content than other forms of advertising, and are designed to produce instant responses from users.

Video content provided by online streaming services - whether it's live or on-demand - is also growing in popularity as a destination for programmatic ads. Here, ads can appear before, during or after the main video content.

Meanwhile, audio ads appear on websites and apps like Spotify, and are usually played during podcasts and between songs.

Next, there are display ads, which appear in the header, footer or sidebar of web pages, and sometimes, these ads can even take up a whole page on these sites. Social media ads can be tailored to different individuals using the data a platform has on its users, and many social ads often appear as native ads, which are integrated into the content of a page or mobile app. Finally, you might choose to use out of home advertising, like ads that appear on digital billboards.

There are several technologies that make programmatic possible...

First of all, there are Demand-Side Platforms, or DSPs, which provide advertisers with the functionality and information required to select the best publishers and placements for their campaigns.

Information uploaded from a DSP can be compared to a publisher’s Supply-Side Platform, or SSP, to determine the relevance of a potential impression. SSPs help to ensure that all available ad space is sold and achieves as many views as possible.

Meanwhile, Data Management Platforms, or DMPs, give advertisers a better understanding of their audience by collecting and storing data from multiple sources in one place, ultimately helping to target and personalize brand messaging.

Finally, ad servers. These manage delivery and reporting, keeping track of any ad space that’s been sold, and the number of impressions, click-throughs and conversions this generates. Once again, these insights can optimize your campaigns and improve overall results.

Intro to Programmatic