Programmatic media

Programmatic media buying (also known as programmatic marketing or programmatic advertising) is the algorithmic purchase and sale of advertising space in real time. In this process, technologies automate the buying, placement, and optimisation of digital, television, print outdoor and radio media inventory, replacing human-based methods. Experts believe programmatic media will soon become the norm rather than the exception.
Algorithmic media transactions
The evolution from traditional contractual media transactions and proxies of measurement started with Google's Adwords system in 2002. The success of algorithmically driven search media (e.g., AdWords) and display media ad-serving (e.g., DoubleClick) led to further innovation and rise of programmatic media. In 2011, WPP Group launched a proprietary platform (Xaxis) that allowed precise algorithmic targeting of specific audiences via an aggregation of audience information across multiple online and offline channels.
Programmatic media buying
Programmatic media buying allows the use of audience insights and technology to tailor messages to a particular individual, at a particular moment, and in a specific context. Programmatic media is transacted across a wide and diverse array of mediums including digital media (desktop, mobile, and social media), television, print, radio and out-of-home (OOH). Many media agencies work with technology providers to use ad exchanges; others have developed their own trading desks that allow them to place ads programmatically.
The algorithmic method of transacting in media inventory offers two key efficiencies for advertisers, namely the real time management of data and the ability to find liquidity (or targeted media that is readily available). The former and latter has given way to a more process that is far more efficient and cost effective and has changed the way media is transacted. The industry is going through something akin to the automation of the financial markets in the 1980s, allowing much more precision and personalisation of media, which results in more efficiently targeted campaigns.
; Ad exchange
: Ad exchanges allow advertisers to buy media space from publishers using auctions. Buyers and sellers use algorithms to place ads which optimise key performance indicators (KPIs).
; Real-time bidding (RTB)
: Real-time bidding (RTB) is an automated method of transacting in media inventory, which is bought and sold via technology platforms such as ad exchanges or supply-side platforms (SSP), in real time. In this process, sellers (publishers) make their inventory available for buyers (advertisers) who bid on the inventory in the marketplace. Parameters set by the advertisers include bid price, network reach, and the type of individual that they are targeting. One of the benefits of this process is the unrivaled opportunity for optimisation.
; Private marketplace (PMP)
: In the private marketplace (PMP), or private exchange, buyers and sellers interact in a closed environment in order to gain an additional layer of control over the transaction. Media inventory available via a private marketplace (PMP) is limited to premium environments.
; Demand-side platform
: Demand-side platforms (DSPs), working as a central hub, connect various data sources into one key platform.
; Supply-side platform
: A supply-side platform (SSP) interfaces on the publisher side to advertising networks and exchanges, which in turn interface to demand-side platforms (DSP) on the advertiser side.
Big data
Programmatic media utilises big data to reach targeted people at optimal times in optimal locations; advertisers can approach big data as many actionable points of information about millions of individuals, in order to serve, or convey, a message or content that is (statistically speaking) in line with the consumers mindset. In this way, advertising can be analysed and optimised in real time, in contrast to the traditional approaches employed by newspapers, magazines, or television shows to reach target audiences. Publishing environments are increasingly tailoring messages (advertisements) and content (articles) to appeal to consumers that have been exclusively gleaned through various data-mining activities.
Broadly speaking, there are three types of data set utilised by the industry:
:First party data refers to the data retrieved from customer relationship management (CRM) platforms, in addition to website and paid media content or cross-platform data. This can include data from customer behaviors, actions or interests.
:Second party data refers to an amalgamation of statistics related to cookie pools on external publications and platforms. The data is provided directly from the source (adservers, hosted solutions for social or an analytics platform). It is also possible to negotiate a deal with a particular publisher to secure specific data points or audiences.
:Third party data is sourced from external providers and often aggregated from numerous websites. Businesses sell third-party data and are able to share this via an array of distribution avenues.
Attribution and real-time optimisation
In marketing, "attribution" is the measurement of effectiveness of particular advertising placements in a consumer's ultimate decision to purchase. By helping identify the most effective placement, attribution permits the advertiser or marketer or optimise ad placements, in real time, and with reference to pre-defined key performance indicators. Commonly measured brand and performance metrics include viewable impressions, turnover, profit, customer retention and volume of sales. The list below summarises the procedure used to attribute performance on advertising campaigns that use more than one medium:
Customised attribution model
The customised attribution model is widely used in industry as it includes one or more of the models below and also factors in campaign specific KPI. Each credits a different kind of interaction with the customer, or touchpoint, for a sale.
; Linear
: The linear attribution model takes into account every possible manner a message could reach its audience. For example, in a digital and programmatic TV campaign, the campaign has two potential touchpoints. Equal credit is shared between the two mediums / touchpoints for the conversion.
; First interaction
: The first interaction model credits the first touchpoint.
; Last interaction
: The last interaction model credits the last touchpoint.
; Last non-direct interaction
: The last non-direct interaction model credits the last non-direct touchpoint. For example, if a customer clicks on an ad and later returns directly, the ad would be credited.
; Time decay interaction
: The time decay model works in a chronological manner; the touchpoint closest in time to the conversion gains all credit.
; Position based
: The position based model gives 40% of credit to each of the first and last interactions, whilst the remaining 20% credit is distributed evenly across the remaining touchpoints.
==Networked sensors (the "Internet of Things")==
Networked sensors, sometimes characterised as the Internet of Things, allow advertisers access to a variety of user data (e.g. temperature readings, status updates, location co-ordinates, and check ins) relating to user actions outside of the traditional media space. This information can be used to better target media placements.

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