Impact of Programmatic Advertising on Media Buying


If organizations want to explore new business models, digital media is the best place to be. It’s where media agencies look for the next best product, strategy, or idea. The question is how can these businesses become better at digital media? Some say it’s planning, others say it’s the practice of trading. However, digital media is growing increasingly complex, and operations have become the key to generating business.

The most exciting development changing the entire digital media landscape is programmatic advertising, which in the US, was predicted to grow at 53% every year during 2011-16 (Source: International Data Corporation). To execute digital buying campaigns successfully, executives need to be good at programmatic advertising.

Impact of Programmatic Advertising on Media Buying

The need for programmatic advertising

The technology is mostly about businesses bidding on advertising inventories in real-time. It is done with an objective of connecting a specific advertisement to an audience segment. Now that ad marketplaces have arrived, advertisers can take advantage of programmatic advertising and without having to do jumpy negotiations. The advantage of programmatic advertising is in real-time bidding (RTB). Advertisers can directly bid from an ad marketplace. There are ad auctions conducted at such marketplaces, and the auctions take just a few hundred milliseconds. The best part about programmatic buying is advertisers buying slots individually and not in bulk. In each auction, the advertiser gets the chance to provide a particular customer segment with a single advertisement.

Impact of programmatic advertising on media buying agencies

RTB, ad, demand side (DSP), and sell-side platforms (SSPs) were earlier used by publishers to fill up residual spaces in a display-ad space. With success of programmatic buying, advertisers and agencies now have dedicated ad spaces. There are many benefits of this, like better targeting, selection of specific impressions, higher control, and clarity on pricing. Programmatic advertising is an efficient way for media agencies to manage media purchases. The functions aligned with software solutions of programmatic advertising create access to improved analytics and develop operational efficiencies for media buying agencies, especially towards saving time. They can integrate different marketing and financial automation platforms, which work on different media channels.

The entire function is based on targeting consumers, and studying their behavior and responses to campaign inputs. The agencies also provide resources after proper data analysis to check if the objective appeals to users. The work of a DSP is to tailor decisions for the advertiser, depending on available inventory, price, data, and a host of algorithms that suit the advertiser’s media plan, campaign KPIs, and budget. Hence, programmatic advertising can enhance the advertiser’s investments in media and also influence the returns of the marketing campaigns positively and substantially.

Now the scenario requires premium payments like commissions and agency fees from marketers unlike in traditional media. However, with more automated and efficient buy management processes, media buying agencies face a real challenge to identify the places where their purchase-side employees can add more value.

Author Bio:

Preethi vagadia is a marketing manager worked in Marketing department with top notch companies and has over 8 years of experience in content management solution, Advertising Technology, ad server software. Sports, content writing and music are her hobbies.

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