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Programmatic buying refers to the automated booking of advertising inventory on appropriate marketplaces or platforms.
Definition and Demarcation
Programmatic Buying is often equated with Real-Time Bidding, where marketers offer real-time advertisers and use automated bidding tools. The term “programmatic buying,” on the other hand, stands for the automated purchase of advertising in digital media. real-time bidding is only a small sub-range of it.
A variety of inventories can be booked via a corresponding programmatic buying platform. Target group data for targeting is also available on these platforms in addition to inventory. They can be related to the inventory. This allows advertisers to select not only the source of their inventory, but also to select their target group very precisely. Reach can be significantly increased.
Standard-Displays make up a large part of the programmatic buying platforms. Gradually, however, large-scale inventories are also spreading on platforms, as these are of particular importance for Branding of larger companies. Video Formats are increasingly being traded on programmatic buying platforms.
Advantages of programmatic buying
The biggest advantage of programmatic buying is a more effective implementation of one’s advertising strategy. The target group can be precisely identified and addressed, Scattered Losses get reduced. In addition, they can no longer be addressed according to their environment (such as “mothers” target group on baby websites) but almost on any Websites. The reason for this is that because of the targeting, it can be determined which interests a User has shown in the past. A wider reach and a better Performance can be achieved through programmatic buying.
Importance for online marketing
Programmatic buying is very much on the rise in Online Marketing. Currently, three quarters of German advertisers use real-time bidding for their mobile advertising strategy. Programmatic buying is not yet well-known in Germany, as many German entrepreneurs have not yet fully understood the functioning principle.
However, since the system is already widely used in the US, it is only a matter of time before it is implemented by German marketers as well. Also, the process is still somewhat inhibited, as there is not enough transparency in the data used for targeting. Thanks to the strict Data Protection Laws in Germany, advertisers have to deal cautiously with larger amounts of data they have not collected themselves. The legality of such data collections is difficult to prove in this area.