The two types of programmatic advertising and why programmatic matters

January 14, 2022 | 3 minute read
Steve Olenski
Master Principal Sales Architect
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Programmatic advertising powers the entire digital advertising landscape. It enables advertisers to scale their advertising campaigns, segment and target their audiences, and optimize ad budgets. By automating ad buys, programmatic advertising models streamline how advertisers plan and purchase their campaigns, while maximizing advertising spend.

Most importantly, programmatic advertising gives brands the ability to purchase thousands of ads simultaneously across multiple platforms, including video, mobile, social, and television. This process eliminates time-intensive media buying strategies that rely on human negotiations and manual insertion orders.

With programmatic advertising, brands have the benefit of machine learning technology that improves ad placements based on pre-determined campaign goals and objectives. And while the programmatic advertising space can be a complex and complicated landscape to navigate, the following two types of programmatic advertising purchasing options are a good place to start. 

Types of programmatic advertising

According to the Interactive Advertising Bureau (IAB), a well-renowned advertising industry organization, there are multiple types of programmatic advertising. Two of the more popular models for purchasing programmatic include programmatic direct and real-time bidding or RTB.

1. Programmatic direct

Also known as premium programmatic advertising, a programmatic direct advertising buy is a direct, automated sale that happens between a publisher and an advertiser. It is a technology-driven method for buying, selling, and fulfilling digital ad buys. With programmatic direct advertising, there are no insertion orders (IO) or master services agreements (MSA) between the advertiser and publisher.

2. Programmatic real-time bidding (RTB)

Programmatic real-time bidding differs from programmatic direct in that it is auction-driven and involves three parties: A publisher, advertiser, and ad exchange. Ad inventory is purchased by advertisers via real-time, automated auctions. Two types of RTBs are open auction (audience targeting) and private marketplace deals which require a private marketplace and allow for fixed pricing and data overlays. More and more advertisers are leveraging RTB within their advertising strategies to optimize their results.

Why does programmatic advertising matter?

The shift to programmatic tactics means a few things for marketers and the industry as a whole. Essentially, marketers have gained data-driven, ROI-based media delivery capabilities that align with their campaign strategies. Additionally, successful programmatic campaigns across all types of programmatic advertising are an efficient method for publishers to monetize core inventory.

That said, some advertisers have struggled with premium inventory falling outside of the standard programmatic categories, although this is becoming less of a challenge. Still, brands with unique and exclusive campaign needs may have to look beyond programmatic advertising models.

Because of its predictive yield, the entire programmatic category is seeing increased spending across the board. The strong ROI for marketers and publishers alike is impossible to ignore, not to mention easy insertion processes and lower barriers to entry for advertisers of all sizes. In a nutshell, the future of programmatic advertising promises brands access to sophisticated technology that will improve ad performance, maximize ad budgets, and drive revenue.

 

Learn more about Oracle Advertising and how we can help you build successful programmatic ad campaigns.

Oracle is a leader in automated, multichannel marketing. Download Gartner's 2021 Magic Quadrant for Multichannel Marketing Hubs to read about Oracle's cross-channel campaign management capabilities.

Steve Olenski

Master Principal Sales Architect

Nicknamed “The CMO Whisperer” by the former CMO of Walmart, Steve Olenski is truly in rarified air for he has achieved an unrivaled respect and trust among those in the c-suite. Steve is also among the world’s most influential journalists and writers having written for many leading publications for over 10 years including Advertising Age, Adweek, Business Insider and Forbes.


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