(This is Chapter 1 of the Adomik Programmatic Yield Management Handbook)
An introduction to Programmatic, Part 1: What is Programmatic Advertising? You ask:
"Programmatic media buying (also known as programmatic marketing or programmatic advertising, sometimes just programmatic) is the algorithmic purchase and sale of advertising space in real time. In this process, technologies automate the buying, placement, and optimisation of digital, television, print outdoor and radio media inventory, replacing human-based methods. Experts believe programmatic media will soon become the norm rather than the exception (Wikipedia)
More practically, programmatic is a true disruption in the way media sellers and buyers are organized and operate in the online advertising business. Three principal changes have come about that are driving massive value and disruption in the market:
- Programmatic has created a new complex language for buyers and sellers (and their software) to discuss, negotiate and monitor a massive number of transactions at scale (see future blog post analyzing this transition in details)
- Programmatic trading has become a living marketplace: This is a truly real-time marketplace where both sellers and buyers need to be able to make "immediate" data-driven decisions that are motivated by both long-term strategies and short-term opportunities. In the future, as all media becomes transacted programmatically, we may even see things like futures contracts much like those in the financial markets.
- Programmatic has become a deeply complex ecosystem. Programmatic and real-time bidding have led the way for unprecedented and more sophisticated ways of buying and selling ads and have empowered sellers and buyers to exponentially increase the number of parties that they do business with. However with these additions, deep concerns about quality, pricing and the lack of humanity have made more complex the life of the yield manager.
With all this change, it might sound like quite a challenge for a traditional media seller wanting to go programmatic! Not to worry: media trading still remains - even in this highly automated environment - the meeting of a seller and a buyer in a marketplace to trade a specific good.
Today, technology needs to be viewed as the infrastructure designed to make this process more efficient, flexible and scalable. Programmatic technology gives sellers the ability to differentiate from the competition by making transactions completely adapted to their inventory offering (content, audience, etc) and demand partners' needs.
The programmatic Yield Management Handbook will help sellers understand the value of their inventory and and structure and market it properly using this evolving programmatic “tech stack”.
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