By: Carson Bodnarek

Let’s say you’re scrolling through Instagram and you discover that Gen Z finds your skinny jeans out of style. You need a new pair of jeans STAT! You decide that the best place to shop for a more fashionable pair is at the mall. There, you have up to a dozen different stores that all sell jeans, each with slightly different colors, price points, and styles to choose from. The best part of shopping here is that you don’t have to drive to individual stores all over town to find what you’re looking for.

Don’t worry—you can wear skinny jeans if you want to! The point I’m trying to make here is that the mall is a great analogy for the programmatic advertising landscape. Here’s what I mean:

  • The jeans you seek represent the digital impressions that you wish to purchase
  • The stores in the mall represent ad exchanges, which each sell different inventory at different price points. Because you can’t afford to buy all the jeans in the mall, you must decide on how much you’re willing to spend for the jeans that are the closest fit to what you’re looking for.
  • Finally, the mall represents the demand-side platform (DSP) that brings all the exchanges together to make it easier for shoppers to buy—and for vendors to sell—their inventories. The mall gives consumers access to lots of different products via many different stores, all in one place.

It may sound elementary, but this example can help simplify the digital advertising process, giving your advertisers insight into how programmatic media buying works.

When I was a less-experienced local media seller, I often found myself pitching programmatic as a product instead of a strategy. Essentially, it was just another way to purchase additional audiences on websites outside of our owned-and-operated or core inventory. In doing so, I was leaving out the most important, and albeit most impressive piece of the offering: the benefit of using automated technology to run media.

Programmatic (or DSP) technology allows us to strategically bid on impressions that make sense for a client’s campaign. Honestly, this is the secret sauce when it comes to selling digital. The best thing you can do is find out what success means to your advertiser and educate them on how we can measure that success with digital campaigns.

Once we know the goal (site traffic, exposure to TV ads, form fills, etc.) and how we will measure that goal (clicks, completed views, conversions, etc.), we can use the technology to find impressions that are more likely to achieve that goal. Not only does our DSP have baked-in optimization tools, but programmatic buyers are trained to analyze the data and make decisions on where money should be spent in real-time. When we as sellers stop focusing on the CPM, and start focusing on the goal, the advertiser benefits in a big way (and so do you, when renewal time comes around!)

So how does the DSP find impressions that will perform? In the DSP, all inventory operates on an auction-based buying method—like bidding for an item on eBay. Our recent blog post on the evolution of programmatic bidding lays this out in detail.

It’s important to provide education on real-time bidding because it’s different from a site-direct owned-and-operated media campaign in which an advertiser can purchase any number of impressions for a flat-rate CPM. In the DSP, you decide what you will pay for different impressions. You bid higher or more aggressively on impressions that will help reach your audience or drive performance. When tactics, sites, or placements are not performing, you bid lower.

Of course, we don’t expect media buyers to sit and individually bid on millions of impressions every month—and that’s where the technology comes into play.  In a DSP, media buyers can assign the maximum bid prices they’re willing to pay for impressions, and let the technology automatically bid to compete with other buyers for those impressions. Because we are constantly in a state of bidding and winning impressions based on performance, it’s important that we focus on selling a total budget across the campaign (as opposed to by tactic) to reach a specific KPI.

What does this look like in practice? Let’s say a buyer is given a budget and four ways of reaching an audience: audience targeting, contextual, hyperlocal, and retargeting. The buyer then uses real-time bidding and real-time data to gauge where performance is coming from, and spends the budget accordingly. The benefit here is that the buyer is not handcuffed to spend on certain tactics only—instead, the data tells them how to execute.

Simply put, when a media buyer uses a DSP to buy digital media, they can leverage strengths in the technology to predict and analyze which impressions will achieve pre-identified campaign goals.  Whether your advertiser wants to generate maximum clicks, lots of completed views/listens, or even conversions via form fills on the website, we can tell the technology to search for and strategically bid on impressions that are predicted to generate maximum response.

Programmatic streamlines the inventory buying process, while real-time bidding allows us to use a DSP to find best-performing impressions based on client goals. When you work with an advertiser to establish goals prior to campaign launch, stress the importance of performance and flexibility when it comes to campaign delivery, and educate your client on the changing digital space (hot tip: use the analogy I laid out above!).

In this way, you will ultimately win more deals and earn long-term trust with your advertisers. Remember, having a trusted digital partner will be essential to the advertiser’s success in the years to come—and yours too!