The programmatic advertising model is growing in popularity worldwide. According to the IAB International Report on Programmatic In-Housing from 2020, the global programmatic share of digital ad spend saw a 54% increase from 2015 to 2019. In 2020 the value grew almost 70%, reaching $129 billion, according to Statista. Transparency, reach and relevance — these are the advantages of the model for advertisers, but what about publishers? We explain what programmatic is and when media outlets should use it.
In its simplest form, programmatic is about automating buying and selling of online advertising space. Algorithmic software allows advertisers to target consumers precisely and purchase relevant ad space on websites by leveraging data through an automated auction process. (Think of an ad for a banking service for students served to a person aged 18-25 before the start of the academic year, while he or she is reading economic news.)
There are two main models for selling inventory in programmatic: direct deal and real-time bidding. The direct approach requires that the publisher sell ad space to specific advertisers. The real-time bidding model is more common. Despite the many stages of the sales procedure, the auction happens in the blink of an eye:
A publisher provides its ad space availability on a supply-side platform (SSP). The SSPs manage, sell and optimize available ad space on the publisher’s websites and mobile apps.
Each time a publisher’s website loads, an ad request is sent to multiple ad exchanges.
Demand side platforms (DSPs), which host advertisements, bid for the right to put an ad impression on the publisher’s website.
The winning bid is then delivered to the website via the SSP and displayed to the user
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Each SSP has specific requirements for newcomers, but these are the most common:
1. Traffic quality
Usually SSPs will usually not specify the amount of traffic needed, but it’s expected to be big. For example, OpenX, the third largest SSP in the world, supports such publishers as VICE and Conde Nast UK. On the other hand, the 13th biggest SSP, Sovrn, defines 1,000 daily pageviews as the absolute minimum. Traffic sources with the highest priority, in order, are organic, direct and social.
2. Original Content
Cooperation does not take place without a content quality assessment on the website. Publishers with plagiarized content, for instance, won’t be accepted.
3. User engagement
Publishing partners should work to improve all metrics, but average session duration and low bounce rates are particularly important for SSPs
The higher your website’s ads viewability, the more your inventory is able to attract in programmatic. To improve ads viewability publishers should optimize their layout, improve SEO and analyze the content quality.
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Oliwia Gruszewska, Ad Operations Analyst at Yieldbird, suggests auditing both the content and the ad banner metrics for inventory value optimization. She recommends using Similarweb and Marketscout.
Google Ads Manager, the most popular SSP, offers a free version for small and medium sized businesses.
Gruszewska recommends using more than one SSP or, at the very least testing a number of them, particularly because SSP’s are often targeted to certain regions or platforms. A few examples, by region below:
SSPs like Smaato, TripleLift and OpenX tend to be the best in Europe for the in-app format, according to Gruszewska. For video, the best performance is provided by ViddyAd, Teads, Unruly, FreeWheel, SpotX, Telaria, Xandr/AppNexus and Oath (Verizon Media). For Desktop and mobile, the leaders are Xandr/Appnexus, Magnite/Rubicon Project and Pubmatic.
Yoni Wilbur, Global Product Strategy Lead for Google Ad Manager, writes that the programmatic model helps publishers succeed in the following ways:
Maciej Zawadziński and Michał Włosek, experts from Clearcode – AdTech & MarTech development partner, mention these other benefits:
The most important disadvantage of programmatic is that human control is still required, writes AdTech development partner War Room Inc. The auction is fully automated, but both publishers and advertisers need dedicated staff for process control and optimization. Even though inappropriate ads and advertisers should be blocked, there still needs to be a person who ensures there is not inappropriate ad matching or an unfavorable floor price. Later, the team has to analyze your inventory quality and sales performance.
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