What is Programmatic Advertising?
Why do we need it?
All this while Ads were bought by Advertisers/Agencies interacting with publishers. With the advent of digital every small-time blogger, website & publisher now had space to fill for ads.
This created a lot of unsold inventory which could be now bought directly using the software. Supply of Ad-space became greater than demand and a lot of publisher inventory was left unsold. Hence the rise of programmatic.
Impact
By 2020, 65% of all digital ad revenue will come from Programmatic.
The Long Story
Using technology to buy & sell ads in an automated manner can be called Programmatic advertising. Generally used in the context of digital advertising and with terms like real-time bidding, open auctions and remnant inventory.
Whenever there is advertising there is an advertiser and there is a Publisher. The advertiser wants to show his ads to consumers and the Publisher has space to show these ads on his website. Every Publisher has a certain kind of audience visiting their website. So the advertiser could choose which Publishers had the right audience for their brands.
Media agencies tried helping advertisers find the right Publishers. Ad-networks bundled Publishers together and sold inventory to advertisers. This created Premium and Remnant inventory. The premium was sold directly to advertisers and remnant got sold thru ad-networks.
Now Publishers had the problem of multiple parties vying for their inventory. Hence the SSP can into the picture which helped Publishers maximize their revenue and manage the delivery. (SSP- Supply-side platform)
For advertisers, a similar problem of finding and managing relationships with Publishers was tackled by DSP (DSP- Demand-side platform). The infrastructure for both DSP & SSP evolved into an integrated platform know as RTB (Real-time bidding).
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