Programmatic Media Buying 101: Demystifying the buzzword

By Chika Umeh

The word “programmatic” has officially become a buzzword. One that is still largely not fully comprehended in the African mobile marketing space.

Programmatic buying is an automated process of buying inventory which is in line with the desired target audience and demographics. Simply put, it’s a stress-free way of buying traffic that works for your campaign using software and aggregated data to target individuals with ads relevant to their needs and interests.

There are two ways to do programmatic buying: Real-time bidding (RTB) and Programmatic direct.

RTB which is commonly used is the process of buying and selling impressions in an auction that occurs at the speed it takes to load a webpage.

In Programmatic direct, there is no auction, and therefore no need to bid. The buying of ad space is done automatically and takes place without the need for an exchange or DSP.

RTB involves multiple parties such as publisher, advertiser, ad exchange and the demand side platform (DSP). DSP is a technology platform through which buyers/advertiser can plan, target, execute and optimise their programmatic campaigns.

Examples of these entities: DSP – Twinpine DSP,  Publisher – Naij.com, Advertiser – Unilever,  Ad exchange – DoubleClick ad exchange.

The process of programmatic media buying is explained in these four simple steps.

1.  User A visits a publisher’s mobile web page or app, this triggers a bid request for a specific ad placement. User A’s information such as IP address, operating system etc. is recorded and made available.

Impressions are made available through an ad exchange which lets all advertisers/buyers know there is an ad space for sale (this is called a bid request).

2. The DSPs look into all campaigns the advertisers/buyers are running to see the one most relevant to User A. Bid request is sent to Advertisers whose campaigns are relevant to User A.

The DSP on behalf of the bidders (Advertisers) place a Bid price.

3. The exchange evaluates all the bid price sets by each DSP and the advertiser with the highest bid price wins and pays the price of the second. This is called second-price auction model.

4. The winner of the bid gets to place their ad on the publisher’s mobile web page or app. User A, therefore, sees the ad.

This entire process happens averagely in 200 milliseconds. Now compare that with the average time it takes for the human eye to blink (300 milliseconds) and you will realise this happens before the blink of an eye!

Programmatic media buying provides a pool of benefits to all parties involved. Buyers can leverage third party data to automatically pick impressions and optimise their campaigns at the impression level.

This, in turn, automates the placement process by selecting whom to serve impressions to based on data an advertiser thinks is important to the campaign.

In summary, programmatic media buying allows you the following:

1.  Target your KPI more closely: programmatic technology enables you achieve your campaign KPI in an automated way which increases efficiency.

2.  Scale: with access to wider premium inventory, the scale programmatic offers can not be matched by any other media buying system. Programmatic buying allows you reach a larger audience across multiple websites and app inventory.

3.  Drives campaign performance: programmatic lets advertisers leverage first, second and third party data to focus ad spend on inventory that is seen by their ideal audiences only.

4. Cost effectiveness: with programmatic, advertisers have the ability to adjust CPM price in real time depending on how heavily that impression is valued. You get the best price that ad space is worth at that particular time. More value for every penny!

Have further questions? Share with us in the comments section.

If you are interested in learning more about how programmatic buying can help your brand or business then let’s hear from you. We are excited to help you walk through the process.