Programmatic Advertising, easily explained

Programmatic Advertising refers to the fully automatic purchase and sale of advertising space in online marketing. It is offered in real time on the most suitable advertising space for the previously determined target group. Imagine an auction. The highest bidder is awarded the contract. And this within milliseconds.

The automated processing reduces manual work, simplifies processes, enables more flexible pricing and increases the relevance of the delivered advertising. The advertising inventory is automatically controlled via different channels and marketplaces. This means that the user is approached in real time with the appropriate message via desktop and mobile devices.

How Programmatic Advertising works

With Programmatic Advertising you do not book a fixed advertising space. The advertisement is placed where the defined target group is located. Example:

The classic method

The customer sells skis and books a classic banner placement on 20min.ch at a fixed price for a predefined format. They assume their clientèle is right there.

  • High scatter loss, high risk
  • No possibility of optimization or only with a lot of delay

The programmatic method

The customer sells skis, books a programmatic campaign and specifies their desired target group. User data is now used to search for exactly these people. In any case, they are not at 20min.ch, but at gutefrage.net.

  • Low scatter loss, low risk
  • Delivery is optimized in real time

What is an optimized campaign?

Every campaign has a goal. Basically, the campaign is optimized using the specific KPI (Key Performance Indicator). Would you like to increase awareness? In this case, range is optimized. For more traffic, you optimize to the click. And anyone who wants to trigger an action, for example subscribing to a newsletter, optimizes exactly that.

How do I reach my defined target group in Programmatic Advertising?

Now the so-called targeting comes into play. We distinguish between profile targeting, behavioral targeting and re-targeting. Profile Targeting deals with users who meet certain socio-demographic criteria, such as gender, age or household income. For example, you can catch them when they create a user account on a website.

In Behavioral Targeting and Re-targeting, advertising is targeted on the basis of user behavior. The required data is recorded by using cookies. If, for example, a user is on the website of the provider XY, they are most likely interested in fashion and lifestyle and would like to purchase something. If they then leave the provider XY, clothing advertising will still be displayed when they continue surfing – not only on fashion pages, but also, for example, on news pages.

Determine user interests with re-targeting

Re-targeting also works with cookies and focuses on a previously action performed by the user on the website. If, for example, the user cancels an order process, the targeting system "tracks" this user continuously with the same or an extended advertising message in order to convey the product. Re-targeting is therefore an essential instrument for determining user interests and deriving personalized advertising from them.

Video IAB Austria (german)