The Basics of Programmatic Advertising

November 18, 2015 mogoarts

Programmatic advertising is a method of buying digital advertising inventory that is altering the way arts marketers target and reach key audiences. However, it still only comprises a relatively small set of total digital marketing and advertising spend. This number is expected to rise from 44.1% (in 2014) to 63% of all spend by 2016.  So, what should arts marketers know about programmatic advertising before this spending spike?

What’s Programmatic?

First, you should know what programmatic advertising actually is

According to AdExchanger, “Programmatic Buying describes online display advertising that is aggregated, booked, flighted, analyzed and optimized via demand side software interfaces and algorithms.”

While the technologies available to execute programmatic advertising do exist, programmatic advertising definitely involves human beings! Programmatic advertising can be considered a partially automated process, much like cruise control on your car. It works, but you have to turn it on and off and make adjustments manually.


Why Should Arts Marketers Use Programmatic Advertising?

Programmatic is all about data and accuracy. Accurate data provides the foundation for programmatic advertising to work well. In programmatic advertising, data is reduced to the individual or patron level. This can provide insight for much more accurate targeting than traditional media methods or even broad targeting strategies like targeting by geographic location.

Programmatic allows for opportunities like lookalike audience modeling, and more. Essentially, you’ll target and reach more patrons more efficiently. Programmatic advertising allows for targeting demographics by gender, age, and income, but also more advanced targeting methods and insights, as shown below:

  • Patron psycho-graphics & Interests
  • Patron geography –  like city, zip code and IP Clusters
  • How many ads the patron saw before converting

While this data allows for better targeting, Programmatic methods also allow you to connect with other third-party platforms. These platforms can often help you answer data-driven questions that will inform your future marketing strategy, such as:

  • When was the last time a certain patron was on my website?
  • Has the customer abandoned tickets in their shopping cart?
  • Is the patron current or lapsed?
  • How many ads have we delivered this patron?

How/Where Does Programmatic Advertising Take Place?

All of the above takes place in what is called an ad exchange. Programmatic advertising allows advertisers and publishers to buy and sell ad inventory in an environment very similar to the stock market. Publishers who wish to sell their available ad inventory wait for a high bidder on that inventory; in near-real-time, this sale results in an ad impression being shown.

Ad Exchanges are different from ad networks, which are essentially the “stock brokers” of the advertising world. Programmatic advertising connects ad buyers and ad sellers directly, removing the middle man.

Arts marketers, do you like accurate data? Have you used programmatic advertising methods? Tell us below.