Technology and marketing terms can get a little confusing sometimes. With all of the programs and tools out there, it’s easy to lose track of what to use when! In order to have successful marketing and digital advertising, however, we need to understand the lingo. So let’s break it down…
What is Programmatic Buying?
Programmatic buying sounds way more complicated than it actually is, so to break it all the way down, lets define it in the simplest terms: programmatic buying is the buying and selling of display advertisements using automated technology. Simple! Think of it as one computer talking to another computer, without the mess of human error in the way (goodbye lost emails and long response times). By making the digital advertising process more automated, the entire process becomes more efficient and easier to use.
You Mean There’s More Than One Type of Programmatic Buying?
Yes! There’s RTB and Programmatic Direct. These terms are often used interchangeably because people don’t fully recognize the different between them, but this oversimplification can actually harm the marketing and advertising industry! Don’t worry, it’s not only novices that make this problem – it is actually a problem on a large scale! And it only takes a little bit of attention to the differences between the two to get it right!
What is RTB?
RTB means real-time bidding – but don’t worry, you’re not headed to an auction house here! In simple terms, RTB is a technology mechanism which aids in automatic buying and selling of online advertisement impressions. The buying and selling works kind of like an auction house, only the real-time auction all happens during the time it takes for your webpage to finish loading!
How does RTB work? Let’s say you are on Facebook and on the side of your page, there is an ad impression. In the time it takes to load the page, information about the site you are on and you as a user is passed to an ad exchange. In this ad exchange, the information is then auctioned off to whichever advertiser is willing to pay the most for it, and the winner’s ad gets the impression spot! This whole process, because it is automated, takes a millisecond!
There are a lot of positive benefits to using RTB, but the most obvious is the effectiveness of the process. Instead of using websites as proxy, advertisers are able to target their audiences with RTB based on their hit and click history. The process therefore cuts down the number of impressions they put out using exchanges and other advertising technologies.
The confusing part about RTB is that it is inherently programmatic. Yes, RTB is a type of programmatic advertising, but not all programmatic advertising uses RTB. Programmatic is more of a characteristic of RTB than the definition of it. When you use the term RTB, you are referring directly to the RTB technology which holds open auction markets and private marketplaces.
What is the Downside to RTB?
RTB was revolutionary for the world of ad buying, but it came with a small price. The downsides mostly relate to the vagueness of the buy – there is no guarantee that you will get the ad spot of your choice and there is no information about the specific sites your ad will be displayed on (only the category of sites). Also while RTB allowed a deeper transparent look into the media buying world, it doesn’t fill publishers in on the decision making process behind advertisers buying their inventory by removing the direct relationship between advertiser and publisher. To top it all off, RTB is a little harmful for premium publishers, giving the full advantage (arguably) to publishers. So what happens now?
Programmatic Direct to the Rescue
Programmatic Direct can be called numerous things (programmatic premium, programmatic guaranteed, programmatic reserved, premium direct, automated guaranteed), but don’t be fooled into thinking these are different things. All of those terms all mean the same thing!
In a nutshell, programmatic direct is the an automated process of direct media buyers which solves the problem RTB creates by removing the direct relationship between advertisers and publishers by allowing advertisers to buy directly from the publisher, but without filling out the tedious insertion orders. In this way, publishers and advertisers get the transparency they need to make the most out of their campaigns. For example, in this way, when advertisers buy inventory from a publisher, they are guaranteed the spot they purchase!
By offering a system that includes a guarantee instead of an auction, programmatic buying was able to surpass RTB by supporting more targeted marketing to audiences.
So Which One Should We Use?
When it comes down to it, both types of programmatic buying are still in use by advertisers and publishers all over the world. The choice comes down to preference! Consider the positives and the negatives and optimize your campaign with whichever fits your needs!
Want to know more about programmatic buying – check out our Ultimate Guide to The Evolution of Programmatic Buying