What Is Programmatic Advertising? The Ultimate 2022 Guide

Programmatic Advertising: It might be challenging to roll out digital advertising strategies. To succeed, you need to amass a mountain of data, locate your ideal customers, and provide them with your most pertinent information via the most appropriate channels. Advertisers need an easier approach to scaling up their ad distribution to break through the clutter created by the proliferation of touchpoints.

Programmatic advertising serves this purpose.

Programmatic advertising entails what exactly? To purchase online advertising space using a software platform. Advertisers can submit bids on available inventory with a programmatic advertising platform, which then uses customer data and algorithms to determine the optimal placements for each ad.

Previously, advertising was purchased through personal interactions between reps and salesmen, which is a significant improvement. While there are benefits to traditional advertising, such as the opportunity to create personal connections with consumers, these strategies are time-consuming, costly, and less effective than programmatic digital advertising, which is supported by real-time data.

Here are some of the essential benefits of programmatic advertising.

  • saved time and money

Advertisers can save time and money on formerly tedious activities by automating ad buying. If marketers can save time, they will have more resources to develop novel advertising approaches.

  • CPM, ROI, and Control Improvements

Programmatic advertising allows brands to automatically release customised ads at scale, lowering their CPM and increasing their ROI (ROI). Ad buyers can maximise their budgets with the help of the correct programmatic buying and monitoring technology by adjusting their CPMs in real-time.

  • More Personalized Experiences

Using data signals and machine learning, programmatic advertising determines where each ad will have the most significant impact, allowing businesses to target the right customers at the right moment.

Advertisers, for instance, can zero in on specific audiences in real time according to demographics, content preferences, online activities, and where they are in the buyer’s journey.

What is the procedure for programmatic advertising?

Okay, let’s get down to brass tacks and discuss how programmatic advertising works. This means dissecting the various elements of the programmatic advertising ecosystem.

  • Platform Focusing on Demand (DSP)

Advertisers use a demand-side platform (DSP) to bulk purchase targeted digital ad inventory. So, how exactly does programmatic advertising via DSPs function? Advertisers can submit materials, including campaign graphics, copy, and data, as well as select targeting criteria, select audience segments, and establish budgets. The DSP then employs this data to identify relevant publishers for the advertiser’s campaigns.

  • A platform for Managing the Supply of Goods and Services (SSP)

Publishers utilise supply-side platforms (SSPs) to automate the sale of ad space (both native and display ads) to advertisers. It functions similarly to a DSP but on the publisher’s end. Because of their ability to assist publishers in locating the best brand partners and the most engaging ad content for their audiences, SSPs are crucial for boosting both income and user engagement.

  • Infrastructure for Handling Data (DMP)

Advertisers can utilise data management platform (DMP) software to collect, analyse, and manage customer data. Information can be ordered via various online and offline channels, including websites, emails, direct mail, call centres, applications, and social media. It can be classified as first-, second-, or third-party information.

The DMP’s data organisation, insight extraction, and activation capabilities will allow it to power future programmatically targeted campaigns.

  • Promotional Swap

It is the function of an ad exchange to serve as a meeting place for demand-side platforms and supply-side platforms. Programmatic ad exchanges are virtual meeting places where sellers and buyers of ad space can transact.

The ad exchange allows the publisher to establish minimum CPMs and specify desired ad forms and content categories. And in the meantime, the advertiser can control bidding, exclude specific domains, and select particular audiences. Next, the ad exchange will utilise this data to pair users with relevant advertisements.

Different Programmatic Advertising Formats

  • Actual-Time Auctioning (RTB)

Using real-time bidding (RTB), marketers compete for available ad space on websites that use programmatic buying. Advertisers often use a cost-per-thousand model (CPM) to submit their best CPM bid through their DSP and compete in real-time on the ad exchange.

Real-time bidding (RTB) is quick and automated, allowing advertisers to bid on several spots simultaneously, expanding their reach and scale without draining their budget. To that end, RTB is widely regarded as a highly efficient and adaptable programmatic ad-buying option.

  • Public Free-Market (PMP)

Invitation-only RTB auctions are known as private marketplaces (PMPs). They serve a similar purpose as RTBs but are reserved for a select set of advertisers. PMPs can be costlier than other options because of the premium associated with their exclusivity.

PMPs appeal to advertisers because they guarantee that their ads appear only on high-quality publisher sites and provide immediate access to premium ad inventory. Meanwhile, publishers may rest easy, knowing precisely who delivers advertisements to their audience.

  • Directed by Programs

When purchasing ads, programmatic direct facilitates direct communication between advertiser and consumer. Since this is so close to conventional advertising, it may sound contradictory. However, direct programmatic stands apart because it can still be conducted through an ad purchasing platform, even if publishers and advertisers collaborate to establish a fixed CPM for a guaranteed transaction.

Programmatic direct is more transparent and brand safe, but it lacks the flexibility, cost-effectiveness, and scalability of RTB and PMP. It is typical practice for publishers to set aside a portion of their inventory for direct programmatic sales and then sell the rest through private marketplaces and real-time bidding platforms.

Strategies for Programmatic Advertising

Programmatic buying, targeting, and bidding can be complicated, but advertisers can employ best practices and programmatic tactics to maximise ad budgets and performance.

  • Multiple Creatives

Try other ads. The programmatic native display helps target audiences with relevant sponsored items. Programmatic out stream or native video can create more engaging, interactive ads.

  • DSP Creative Assets

Keep all creative assets in your DSP platform. Simply listing all creatives in one-line item does this.

  • DSP Deliver to Top Creatives

The DSP can optimise your campaigns with all those materials by prioritising the most significant creative assets.

  • Share KPIs with Supply Team

Your supply team may optimise each ad agreement by communicating your goals—impressions, conversions, decreased CPC, or sales.


With more and more companies realising the benefits of channel diversification, enhanced brand safety, and streamlined operations, programmatic advertising is only anticipated to increase in popularity. Businesses will need sophisticated targeting and monitoring tools to survive after the phase-out of third-party cookies in 2023. Those who begin establishing their programmatic operations today will have a leg up on the competition and be in a prime position to capture audience attention across the open web.

You Can Read Also:

What Are the Key Differences Between SMO and SMM?
How To Attract The Right Crowd To Your Website With SEO?
Website Development Process: Planning & Essential Stages to Build a Website

Leave a Reply