Programmatic: What, why and how

On 10/05/2017 by Araceli Almada

“What is exactly programmatic native advertising?” Although for those of us in digital, it is a term that is more and more common, this question is often asked. As we are operating in a highly dynamic and changing industry, if you don’t stay up-to-date you can easily get lost in the flow of new technologies and developments. And it’s even harder if you are a beginner in this field. Since we like to keep you informed of what is new and what is coming, we want to share more about programmatic and how to get the full potential out of it. 

Native advertising in brief

Before talking about programmatic, let’s quickly define native advertising. Basically it’s a type of digital advertising that is seamlessly integrated within the publisher’s website. It’s not about misleading the user and having him click on what he thinks is piece of editorial content. It’s rather about providing him with a positive browsing experience that avoids interrupting pop-ups, pre-rolls, intersticials or any other type of advertising that destroys the relationship between consumers and brands. Therefore, this format is better accepted by users, and then they are more likely to click on what they know are paid-for ads. This makes advertisers want to invest in it, which increases publishers’ revenues. So, native advertising is a winning solution for every player involved in the process. 

What is programmatic? 

Programmatic can be defined as the automatisation of media buying where CPM is set through a real-time auction. In this auction, the DSP (Demand Side Platform) is the buyer and the SSP (Supply Side Platform) is the seller. 

DSPs help optimize the purchase of the publisher’s inventory by the advertiser. The optimization is not only a matter of price, but also of placement (the process allows to automatically select the best-performing placements), page category, user, time, context or location if the data are available. By using their data, advertisers are able to target specific users according to their demographics and browsing or purchasing behavior, which is another level of optimization allowed by programmatic. In short, programmatic is a way of automating manual processes, reducing transaction cost and enabling the use of (own) additional data. All of this leads to an increase in efficiency of every programmatic campaign. 

On the other side, “SSPs allow publishers to offer their inventory (either display, native or video), in an easy way to the multiple sources of demand. And this, without individual contractual relationships or technical integrations” explains Jan Fees, Head of Product Marketing & Technical Partner Management at Ligatus. Thus, SSPs are a way for publishers to maximize the total value of their inventory. 

Why programmatic native? 

Programmatic and native advertising have developed independently at first. But, as a win-win online advertising solution, global spendings for native advertising have been booming for a few years now (they are expected to reach $59,3 bn in 2018 according to Statista*). More spendings meant an increase in demand, so media companies had to set up technology-based solutions to shift from inefficient and time-consuming manual processes to automated ones. This is where programmatic comes up. Standardization being key to set automatisation, the iab (Interactive Advertising Bureau) created the OpenRTB native specification which is now used by the entire programmatic industry. 

Programmatic native is also a response to the growing demand for brand safety and targeting capabilities. Since advertisers are able to choose their audience with a better precision, they are less likely to get invalid traffic and to suffer from ad fraud. Programmatic native in fact has given them the power to manage their assets. This partly solves the issue of transparency between the media company and the advertiser. Only partly because, as in non-programmatic buying, transparency is also a matter of quality. 

Quality always comes first

Targeting capabilities are a huge step forward in the field of Native Advertising, especially for advertisers. As programmatic is a technology-based solution, behavioral or contextual data can be used as a driver of success: First, in terms of performance because advertisers are now able to better target the relevant audiences. And second, in terms of engagement as well, since messages are more relevant and therefore are most likely to be well received by users. 

Campaign optimization is a key point in programmatic native and to that extent, an even greater number of advertisers and publishers will be pushed to use it and then come up with more targeted and relevant content. This should help in reducing the amount of clickbait found today. However, this does not mean that media companies have no responsibility anymore. It is also their duty to build a strong and brand safe publishing media to ensure a qualitative environment for their partners. 

Programmatic native is not only a matter of budget and campaign optimization. It is also about respecting users and their browsing experience. As experts in Native Advertising, it is our duty to do our maximum to satisfy their needs and provide them with a positive experience. If Native Advertising is a way to reconcile ads and users by re-building the relationship between them; Programmatic Native is taking it even further. 

Now that you know more of what programmatic is and how it can be beneficial for your business, why don’t you take the leap and start your programmatic native campaigns today? Contact us