What is "Programmatic"?
The term "programmatic" in programmatic advertising simply refers to the automated buying and selling of online advertising through the use of software and increasingly smart algorithms and AI/machine learning. Nonetheless, the word "programmatic" is often used loosely, albeit confusingly, to represent the advertising channels that are transacted using the OpenRTB specification, such as OTT/CTV, video, audio, display, native, DOOH, and email, while omitting paid media such as social media and search.
Defining Programmatic in XPO
Knorex XPO was envisioned and designed from the ground up to achieve the vision of Universal Marketing. Our goal is to provide unified, real-time access to paid media such as social media and search, and the open RTB-based "programmatic" channels (as listed above) where ad buyers can directly purchase ad inventory across all these different media and advertising channels in one place. Unlike other solutions in the market which typically cover some of the channels listed in the diagram below, XPO aims to cover as many channels as possible to attain the Universal Marketing goal. As such, we have prepared the following diagram to (re-)define the programmatic advertising as used in XPO for clarity purposes.
Referring to the diagram above, we explain the terms used in the diagram to present the different models and approaches in use.
|Explanation / Description
Programmatic advertising buying refers to the use of automated programs to buy and sell online ad spaces. Unlike traditional ad buying where negotiations and ordering are done manually through tedious processes, programmatic advertising relies on technology to eliminate human error and to speed up execution and transactions by replacing tedious tasks of insertion orders and the like.
Another great benefit of using programmatic advertising enables the use of a data-driven approach, allowing for better targeting instead of the spray-and-pray approach used in traditional media. The audience becomes the key factor and less emphasis is placed on the placement of the media.
These channels - OTT, CTV, Video, Audio, Native, Display, Email, and DOOH, are commonly referred to as "programmatic channels" despite the misnomer, as described above.
There are 2 general methods to connect to the channels,
(a) by means of using the Open-RTB specifications; OR
(b) proprietary APIs provided by each of the media platforms, such as social media including Meta, Instagram, LinkedIn, and search (Google Search).
|Pricing Mechanism and Buying Models
A. Open Auction Based:
ii. Private Auction Based:
B. Non-Auction Based (or Fixed Price):
NOTE: Programmatic direct is where a deal is struck directly between a media publisher and an advertiser, eliminating an exchange party. Preferred Deals, private auctions, and programmatic guaranteed are all considered "Programmatic Direct".
|Access to underlying Audiences