What is Programmatic Advertising? The Basics

by Figaro Digital

Over the last year or so, you may have heard a lot about ‘programmatic’ and how effective it can be. But, what is programmatic advertising exactly? And how could you use it as part of your PPC marketing campaigns?

The Definition Of Programmatic Advertising

In short, programmatic means ‘automatic’.



Programmatic advertising provides marketers with access to millions of advertising spaces across the web and automates the process using specific targeting information on a demand-side platform (DSP) and display adverts.

Generally, programmatic advertising can be categorised as one of three types. These are:

Real Time Bidding (RTB) – This allows advertisers to purchase impressions on an individual basis through multiple ad exchanges.

Programmatic Direct/Guaranteed – With no auction process, this allows advertisers to purchase a set amount of guaranteed impressions.

Private Marketplace – Buyers bid on ad space directly and ad exchanges are eliminated.

How Does Programmatic Advertising Work?

Despite ads appearing instantaneously as a page loads, programmatic bidding is actually a detailed process.

When an internet user clicks a website link, the programmatic process begins. The page and user information is sent to the Ad Exchange, which then automatically auctions off any free advertising space to relevant businesses.

This information is then passed to the DSP, which will decide whether or not the prospective ad space meets the target requirements that have been set by a brand. This matter is determined by analysis of factors such as:

Audience – income, age, education level etc.

Behaviour – user online activity, such as what sites are visited and what the users do

Context – the categories and keywords used on a site

Geotargeting – where the user is

The DSP then sends out a bid and in under a second, the highest bidder is revealed and their ad will be shown ready for the user to interact with.

What Are The Benefits Of Programmatic Advertising?

There are several advantages of using programmatic advertising. Programmatic ensures that:

• Advertisers can free up their time and become more efficient

• Issues caused by human error are eliminated

• The traditional process of contacting publishers directly to buy advertising space is negated

• The exchange is faster

• Ads are highly-targeted and only seen by the right people at the right part of the user journey

• ROI is maximised

Is There Anything To Be Wary Of?

Sadly, there’s no such thing as perfect, therefore there are a few disadvantages of using programmatic advertising too. The main one being programmatic fraud, which is categorised as two forms:

Non-Human – When a bot or script generates false data such as page views, clicks and conversions. This can often be spotted as a static IP and cookie ID will be used.

Human – When an ad is placed on a site without payment or permission by hijacking the intended ad, a domain’s URL is changed to mimic a premium site, or an ad has been hidden from view.

Publishers are doing what they can to eradicate this, however it is something to be wary of when managing your programmatic strategy.

Want To Learn More?

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