I’m thrilled to define the term programmatic because it’s such a popular concept (and marketing channel) right now, one that will certainly only grow over time. Before I get into the definition, a fun fact... The picture at the top of my Tumblr blog right now is a picture of myself, PPC Ian, and my good friend Chris Innes, SVP of Client Services at SteelHouse, speaking at a conference called Programmatic I/O. As someone who spoke at the conference dedicated to programmatic, it’s only fitting I define the term here on PPC Ian’s Digital Marketing Dictionary!
So what is programmatic? First, let’s start off with what Programmatic is not... In the early days of digital marketing, especially from a display advertising perspective, everything was done by hand, via manual work. You had your pre-negotiated media buys with publishers such as Yahoo! You mapped out your media plans months in advance and knew exactly where you’d be advertising, at what particular time, and at what specific cost (pre-negotiated CPM). This manual way of doing things is about as far away from programmatic as it gets.
This old model is still leveraged today for premium inventory and has many use cases (and I’m a big fan of this traditional way of doing things in the right setting). If your business has a very important annual event and you must have the Yahoo! homepage that specific day, you want to go the traditional route and negotiate that inventory well ahead of time. Intuit is an advertiser, for example, that often ties up the Yahoo! homepage on key dates around the tax season.
This traditional model also has disadvantages... A few examples:
Humans can only scale so far. With more and more content being published every single day, it’s difficult to manually sell all inventory.
Businesses change. You may not know your future business needs today. What if you want to make a last minute decision to run a display advertising campaign?
What if your strategy is not placement-driven, but rather user driven (such as retargeting)?
Enter programmatic advertising. Programmatic refers to digital advertising programs that are algorithmic in nature. While programmatic originally referred to display advertising efforts, the term has expanded to include other channels (such as video) when an algorithm makes the decisions rather than a human. Of course, it’s of great importance that humans manage the algorithms closely. Some great examples of programmatic advertising:
Retargeting: You pixel a consumer when they come to your site. You then serve them relevant, helpful display advertisements across the Internet. This could not be accomplished manually, only a computer algorithm could accomplish such a feat.
Lookalikes: You pixel consumers who visit your site and then leverage advanced algorithms to find similar consumers who have never been to your site, regardless of which website they are currently browsing. Again, this would not be possible manually, but advanced computer algorithms (like SteelHouse’s) can accomplish this with great accuracy and results.
Highly-Automated Search Advertising: While I don’t think of Google AdWords advertising as programmatic from a classical sense, it is getting there for certain advertisers. When you leverage advanced bid management automation, the computers start doing most of the work. The work becomes algorithmic. While most people think of programmatic as a display-specific concept, you’re starting to see the programmatic mindset emerge across all channels. Another recent example in the search space is Google’s Customer Match.
I hope this brief definition helps out, and highly encourage you to include programmatic in your own advertising plan. In fact, it may already be there, you just may have not thought of it as programmatic!
