Programmatic marketing: what is it and how does it differ from real-time bidding?

Joe Webster

Planning Director

Adjective: programmatic

Of the nature of or according to a programme, schedule, or method

‘A programmatic approach to change’

Of the nature of programme music

‘Programmatic tone poems and operas’ 

Why am I writing this article? Programmatic marketing has been in force for a few decades now, so you’d think most marketers would be pretty well versed in the subject… But I haven’t always found that to be the case.

Programmatic teams and media buyers do have a comprehensive understanding, but not necessarily those around them in the wider business. The main issue is this: people assume that programmatic buying is real-time bidding (RTB), and whilst in many instances this is the case, they are not one and the same.

Recently someone said to me; “I’m really excited about programmatic out of home (OOH) – imagine being able to reactively put your ads in a particular location with a moment’s notice”.

I’m imagining it. It would be amazing. But whilst the various elements exist to make this technically possible, at an industry level we’re not quite there yet. This isn’t an unusual assumption, just google ‘How does programmatic advertising work?’ and I guarantee the majority of the content will focus on the real-time bidding process.

In the example above, if you already had media running in a digital OOH spot, with a dynamic feed, you could update your creative messaging remotely in real time (the results of a live football match or current travel or weather conditions, for example).

But currently, it’s largely not possible to bid on this inventory in real time. Whilst the method is programmatic, the bidding and buying needs to be planned in advance.

I can see where this confusion has come from – it’s completely understandable, given that most people’s experiences of programmatic are tied closely with display or paid search media buying, which do happen in the moment.

When I first started working in media, programmatic display was very much focussed on the real-time nature of the auction. It was a revelation to me and a real eye-opener. Based on a set of rules and parameters, we could unleash our ads across a network using a demand side platform (DSP). When the right user, content, site or combination of attributes were met, our trading desk would automatically bid on the available inventory as the page loaded, we’d compete with thousands of advertisers in an online auction and if we won our bid, the ad would be displayed as the page loaded. All within less than 200 milliseconds. This capability is simply amazing, and the fact that this is the backbone of our industry still impresses me today.

The fact is, programmatic buying has grown considerably from the early days of the display auction. It’s on the rise in a variety of media, including TV, OOH and digital audio.

So what is programmatic media buying and how is it different from RTB?

Programmatic is media buying driven by technology that refines and condenses the traditional media buying process, empowered by the use of data and media that integrates with the appropriate platform. It means that both media buyers and owners are able to buy and sell based on individual impressions or placements (rather than complete packages) in a cost effective way.

This can be done in real time (as with display), but it also enables planners and buyers to source inventory across a range of media in advance, including OOH, digital radio and TV. Platforms like Bitposter allow buyers to utilise their data to identify the right OOH locations, audiences and times in order to buy placements at an efficient scale – both digitally and through traditional printed media. As previously mentioned though, some digital OOH media, once live, will allow advertisers to manage and update their creative in real time with the use of a dynamic feed.

Real-time bidding is exactly that – media that is priced and bought in real time. This allows for a feedback loop empowering the optimisation of campaign goals and KPIs. It creates an efficient and competitive marketplace, responding to the supply and demand of publishers and buyers through an automated bidding mechanism.

Together, these two elements are incredibly powerful and have considerable benefits for the buyers, the vendors and the audience. A competitive marketplace with greater transparency and a better user experience delivers less intrusive and more relevant content to the audience.

Can OOH and digital TV open up to real-time bidding?

At a base level, it’s possible. But in reality we’re not quite there. For all the innovations in technology and across the media landscape, there are as many reasons and blockers to prevent this becoming a reality just yet.

In order for the media to be available in real time we would need a data passback to establish the feedback loop that allows for a real-time auction. What’s the advantage of bidding in real time if you have no more information than when buying in advance? Without stats like current footfall, audience numbers and the makeup of that audience, where is the advantage?

So this is what I’m asking of you and the industry…

It’s a big ask, as terminology and understanding does fluctuate on a wide scale, but understand the similarities and differences between programmatic and RTB and where this applies.

Programmatic and RTB are both:

  1. Empowered by data to make decisions

  2. Driven by advanced technology

  3. Able to streamline the buying process

  4. Competitive and transparent when it comes to pricing

  5. Possible to buy on a placement/impression basis, rather than packages

RTB is:

  1. Based on real-time behaviour and data

  2. Priced in real time

  3. Fuelled by a feedback loop of information between buyer, publisher and user

  4. Able to empower supply and demand in the moment

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