How Programmatic Advertising Works

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How Programmatic Advertising Works by Marco Muzzi found on breaks down what programmatic advertising aims to achieve in this short and sweet video about a surfboard company, Totally Tubular.

The problem with advertising in general

It is sometimes easy to send a message to a large number of potential customers, but they are not always the customers with purchase intent. Advertising can become very expensive in a traditional sense, which offers high barriers to entry and little granular performance metrics of campaigns.

The Solution

Programmatic advertising solves the issue of inefficient advertising by by leveraging consumer data to target the right user on the right device at the right time of the day with a personalized and track-able message, all in real time.

Hows Programmatic advertising works is by facilitating and automating the process of buying and selling of digital ad impressions across millions of websites each and every day. Online advertising in general keeps the internet free by creating a digital economy that is growing exponentially and projected to reach 33 billion dollars in revenue by 2014.

When a dollar from an advertiser is spent programatically, it is plugged into a programmatic ad exchange which connects the supply (publisher websites) and demand (advertiser dollars) to purchase the best targeted ad inventory for the lowest price. It’s an incredible ecosystem that is able to provide endless scale for an advertiser and large amounts of revenue for digital publishers.

Open Auction Pricing

All of this exchange of publisher supply and advertiser demand is driven by the companies found in the Lumascape. The digital advertising industry is still considered so young but definitely rising to it’s golden age with tremendous exponential growth year over year. A dollar from an advertiser in the today’s ecosystem starts out from an agency into an agency trading desk, into a demand side platform, into an Exchange, through a supply side platform and finally into the pocket of the publisher where the user sees the advertisement.