Programmatic Advertising 101

Programmatic Advertising 101

In the last year alone, a significant majority of US digital ad dollars were used for programmatic advertising efforts and is set to continue over the next decade. It seems as though most marketers and businesses are pushing to automate their ad spend transactions, and taking a programmatic approach has become the new norm in advertising and marketing.

But what exactly is Programmatic Advertising, and how does it work for advertisers and website owners? The concept may seem complex, but it really isn’t. Let’s take a look at everything business owners and advertisers need to know about programmatic advertising, from its definition to how Gourmet Ads uses a programmatic approach to advertising in the food and wine industry.

Programmatic Advertising 101

To put it simply, programmatic advertising can be described as a process that automates digital advertising. A publisher (the seller) is essentially selling advertising space on their website for advertisers (the buyers) to display their business’s ads. Advertisers will bid to display their ads on niche sites.

For food and wine companies, it’s very important that these types of ads are displayed on very specific food-related websites for the most possible leads. Programmatic targeting allows advertisers to find the best possible audiences for their advertisements. Typically, this will involve contextual targeting, keyword targeting, data targeting, etc.

This process is a lot more efficient than traditional methods of buying and selling ads because it reduces human error and improves the success of the ad itself. AI will utilize algorithms to collect valuable data such as demographics and geolocation to target specific audiences. Plus, it tends to make ad spend less expensive and many programmatic platforms (like Gourmet Ads) offer reporting software.

Ad Exchange, Demand-Side Platforms (DSP), and Supply-Side Platforms (SSP)

There are a number of tools that publishers and advertisers will use in a programmatic advertising scenario. These tools make the automation process even easier.

Ad exchange refers to the digital place where both buyers and sellers meet. It’s also often referred to as the market. Here, both sides will bid, sell, and buy ad space. It’s really not so different from a trading space on Wall Street.

Traditionally, buying ads online was a disorganized and difficult process. Publishers and advertisers would have to do all of the work that programmatic advertising does, but manually.  Demand-side platforms and the automation process eliminates the need for this. A DSP is a tool that advertisers use to automatically buy ad space, and it’s usually used by advertisers to find the right ad inventory.

While advertisers have their tools, publishers also have their own. Publishers will use supply-side platforms to auction off their ad space and manage purchases. Before SSPs were in the mix, publishers would have to hire third-party sales professionals to contact advertisers and try to sell them ad space. This, of course, took a very long time to do. SSPs essentially takes on this process with little work from the publisher.

Understanding the differences between DSPs and SSPs is crucial to understanding programmatic advertising. DSPs and SSPs both work in the ad market. DSPs are tools for advertisers to automate their bidding and purchasing processes. SSPs are tools for publishers to sell available ad space. A DSP will use AI to search for the least expensive but highly-targeted ad space for the advertiser to purchase. An SSP used AI to sell the ad space on websites for as much money as possible.

Programmatic Advertising vs Managed Services

Programmatic advertising and managed services are terms that tend to go hand-in-hand, but they’re actually quite different.

Managed services refer to the practice of essentially outsourcing maintenance and processes within a business. In the context of advertising, this is often done to further “automate” the advertising process. Many large businesses will use managed service platforms to handle their advertising and marketing needs online, including the process of programmatic buying and selling. Gourmet Ads also offers managed services in addition to programmatic advertising services.

What Makes Gourmet Ads Different?

Gourmet Ads is a programmatic advertising platform for food and wine companies, including supermarkets, food manufacturers, grocery stores, etc. We believe that taking a programmatic approach to advertising online makes the entire process of online marketing easier, more efficient, and more profitable. We manage thousands of high-quality publisher websites that post recipes and cooking-related content. In addition to programmatic advertising, we also provide managed services as well.