Programmatic ads have changed the game in online advertising, but there’s still heaps of confusion around what it actually is and how it all works. So let’s break it down. Programmatic buying refers to any ad space bought automatically on a web page these can be bought by 1. Bidding for one space or two. Buying it directly. These spaces are bid on its called programmatic real-time bidding (RTB) this is what serves internet users with display advertising on the web.

But where do they do all this buying and bidding? Well, all the interesting stuff happens on Ad exchange.  Ad exchange will auction off the space to the highest bidder, then the add will appear when the page is done loading. So basically as a page loads, if it has ad space on it that’s available to be bid on, info about the web page and who’s viewing it is passed on to an ad exchange and an auction will be held. The prices of the ad spaces completely depend’s on how much buyers are willing to pay.

You’ve probably confused, how could there be an auction in a matter of seconds that it takes to load a page?! But that’s exactly how long an auction on ad exchange will take. It happens so quickly because advertisers use a fully automated software demand side platform (DSP) to help them decide which ad space to purchase and to bid on ads for them. This does remove the need for human sales people, negotiation skills and a huge amount of time as these decisions are made immediately and simply the highest bidder wins.

The Use of RTB means advertisers no longer have to purchase ad space for a set amount of money for a set amount of time on websites they assume will bring them traffic instead ads can be specifically targeted to relevant audiences across a wide range of sites and prices and can all be managed in real time!

Programmatic advertising has taken a lot of stress off agency’s when buying ads as the process of buying has become much more efficient and cheap. Agencies no longer have to research the best ad space to place an ad, rely on an admin heavy process and manually place the ad before the ad is even running. Now thanks to programmatic advertising’s marketers can now have faster access to ad inventory, complete pricing control and immediate and seamless delivery.

Sophie Robertson