The digital advertising industry has rapidly evolved to reflect a world in which smartphones have become the global standard for media consumption. In response, programmatic media buying is supplementing, and in many cases replacing, traditional media buying practices. The value for advertisers and publishers is immense — in the United States, 83.5% of digital display ad dollars go through programmatic channels.
Programmatic markets are proving robust enough to handle the demands of 21st-century marketing, even weathering the challenges of COVID-19. App marketers who approach this space strategically have more opportunities to reach their audiences than ever before.
This article will explore the nuances of programmatic media buying and discuss how advertisers can find their footing in the space.
Need a primer on the real-time bidding ecosystem? Check out Mobile RTB: The App Marketer's Guide to the Real-Time Bidding Ecosystem.
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What is programmatic media buying?
Programmatic media buying is a broad term that refers to the automated process of buying ad inventory, which can include (but is not limited to) a unified real time auction. The approach is an increasingly popular alternative to traditional media buying because it reduces manual work and often drives high-quality results. It automates targeting, reaching quality users with greater precision at a grander scale. The real-time auction model ensures that the most valuable impressions receive the highest bid.
There are currently three ways advertisers can participate in the programmatic ecosystem:
In real-time bidding (RTB), supply-side platforms distribute inventory via real-time digital auctions. Unlike traditional media buying, RTB opens the floor for any advertiser to bid on supply from any publisher, eliminating the need for direct deals per channel.
RTB auctions occur instantaneously and deploy ad creative milliseconds after an ad request. To participate in these auctions at scale, advertisers and publishers use demand-side and supply-side platforms.
Even in a programmatic ad environment, direct deals still have value. Advertisers can always buy inventory directly from supply providers for a predetermined price — usually in CPM — without the need for an auction. While publishers assign these deals manually, delivery still occurs programmatically.
Private marketplaces leverage RTB mechanics, but they are not open to all advertisers or supply-side platforms. Admittance is invite-only or restricted to partners operating above a specific CPM benchmark. These marketplaces often house exclusive inventory that is not otherwise available on any market, programmatic or otherwise. For advertisers, they provide strategic opportunities to target high-value or niche audiences. Premium supply also means that advertisers have more control over brand safety, given that they’re able to choose which marketplaces they participate in, making sure to only join those containing publishers that align with their brand.
Best practices of programmatic media buying
Choose the right partner
The programmatic media space is fast-paced and highly complex. To succeed, media buyers need partners who can help them meet their specific needs. This partner is typically a demand-side platform (DSP) that facilitates inventory buying at any scale. Many platforms also provide campaign strategy as a managed service, while others include self-serve campaign tools.
Looking for a programmatic partner? Unlike most DSPs, MOLOCO uses proprietary machine learning algorithms to determine the most valuable impressions to target and optimize for ROAS. We provide both self-serve and managed service options to power growth at any scale. Reach out to our team for a consultation.
Optimize, optimize, optimize
Programmatic media buying is an automated process, but it doesn’t run itself. While buying is automated, advertisers set strategic goals and optimize for maximum ROAS.
Machine learning is the cornerstone of any effective programmatic ad campaign. These algorithms perform best when they can learn from both first and third-party data. In this case, third-party data is that of the DSP or ML platform, while first-party data is your data on your highest quality users. While some DSPs aren’t able to accommodate both, the most successful app marketers leverage all data sources to maximize ROAS. In fact, the ability to effectively leverage first-party data is a big part of why MOLOCO is able to deliver results above and beyond what other DSPs are capable of.
Don’t forget about brand safety
Any automated process runs the risk of compounding mistakes and errors without your knowledge. In programmatic advertising, this happens when DSPs buy inventory from the wrong publisher. The issue here is brand safety — if you’re not careful, your brand might unintentionally fund inappropriate apps, hate sites, and extremist platforms. Always work with an established traffic provider with a reputable history that has a public-facing brand safety policy, like our own.
Have measures in place to counter ad fraud
It’s difficult to estimate precisely how much ad spend is lost to fraud, but experts agree the impact is immense. One eMarketer report sets the range from $6.5 billion to $19 billion per year. The good news is marketers have more programmatic tools to minimize fraud than ever before. Ad fraud rates are steadily decreasing, and in 2019 more fraud was prevented than fulfilled for the first time.
The best fraud prevention measure is to choose a trusted DSP with a reliable and scalable fraud identification solution. Be wary of fraud rebates — if your DSP permits click injection, SDK spoofing, or organic poaching on its platform, you will likely only receive a fraction of the lost spend. When in doubt, run an incrementality test to gauge whether the traffic provider contributes to your growth.
How MOLOCO brings more value to programmatic campaigns
Choosing the right programmatic media buying platform makes all the difference in the world to app marketers. With MOLOCO’s proprietary machine learning technology, the results speak for themselves. Our algorithms are trained on billions of data points and interact with four billion devices worldwide. Whatever app category you belong to, MOLOCO can drive user acquisition and maximize your ROI.
If you’re ready to gain the benefits of programmatic media buying, get in touch with us today.