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Programmatic Buying – what does it mean?

Apr 09 2018 admin

Programmatic Buying & Planning

Programmatic Buying is nothing but buying and selling of media inventory through technology. There are two kinds of programmatic buying:
1) Programatic Direct &
2) Programatic RTB

What is Programmatic Direct?

This is essentially fixed inventory (or guaranteed ad space) that you buy. It is also called Automated Guaranteed, Programatic Guaranteed and Programmatic Premium etc. A typical media buying process involves identifying the correct inventory, speaking to different publishers, getting rates, negotiating and then publishing ads. Programmatic Direct mirrors the same albeit through technology taking away inefficiencies related to the system.

What is Programmatic RTB?

RTB stands for Real Time Bidding. Think of it as Google Adwords for Display rather than Search. When RTB started it was for remnant inventory but slowly extended beyond that. What happens here is that through the platform you ‘bid’ for available inventory and get the space.

Now, this is where the fun comes in. Programmatic RTB is not just about remaining inventory sold on auction. It can be further segregated:

(i) Unreserved Fixed Rate So the inventory that is not sold off as guaranteed buys, the publishers will try to sell as unreserved fixed rate. So unreserved inventory that you buy at a fixed rate. Basically they will make blocks of inventory and offer to you at a fixed rate. This is not as expensive as fixed buying but more expensive than auction bidding. At the same time the agency doesn’t have to bother about the hassle of auction & bidding.

Now the remaining inventory should ideally be sold off on auction. Right? But it doesn’t. It further gets divided:

(ii) Invitation Only Auction (also known as Private Marketplace (PMP), Private Auction, Closed Auction, Access Auction) – Basically this is offered to select buyers making it exclusive. On the platform, the buyers are allocated Deal IDs and different publishers can choose what they want to show (or not) basis the deal ID. Information that is given can be filtered basis the deal ID. In this system too you bid but this is only amongst select buyers and therefore more premium than your open auction or RTB.

(iii) RTB (or Open Auction) Whatever inventory is left is now sold through auction (like search for GDN). Most people confuse programatic buying with RTB. Probably because more than 80% of inventory is still being sold through this model.