Programmatic inventory demystifying its complexities

Programmatic inventory is sweeping the AdTech sector, changing the way digital advertising is bought and sold.

It allows advertisers to automate the buying process and reach their desired audience with unprecedented precision and efficiency.

However… despite its growing importance in the ad-sector, programmatic inventory can be a complex and confusing topic for many professionals.

Hopefully this blog will help clear things up and ‘demystify’ what it’s all about…

When someone says programmatic inventory, they’re referring to the process of buying and selling advertising space through an automated system, rather than through manual negotiations.

This automation is achieved with the use of real-time bidding (RTB) technology, in which ad space is auctioned off to the highest bidder in real-time.

Where most beginners get confused with programmatic inventory is around the various, different technologies and platforms involved in the process.

For example, demand-side platforms (DSPs) and supply-side platforms (SSPs) are key players in the programmatic ecosystem but their roles and functions can be confusing for many to understand (especially if the initials are just mentioned in a meeting without any explanation… and we’ve all been there!).

Understanding the basics of programmatic inventory

  • Real-time bidding (RTB) is the backbone of programmatic inventory. It’s how ad space gets auctioned off to the highest bidder in real-time.

  • Demand-side platforms (DSPs) are the platforms used by advertisers to buy the ad inventory programmatically.

  • Supply-side platforms (SSPs) are the platforms used by publishers to sell their ad inventory programmatically.

  • Open auction inventory is the most common type of programmatic inventory and refers to the buying and selling of ad space through an open and transparent auction process.

  • Private marketplace inventory, also known as programmatic guaranteed, is a more controlled form of programmatic buying as it refers to pre-negotiated deals between a buyer and a seller.

  • Reserved inventory is a form of programmatic buying in which a buyer can reserve ad space on a publisher’s site in advance.

Finally, that last ‘important’ term or concept to wrap your head around is that of ad exchanges, which are the online marketplaces where RTB auctions actually take place.

Programmatic inventory in the ad-sector

Programmatic inventory is changing the way ads are bought and sold by using data and targeting algorithms for more accurate audience targeting and greater control over ad spend.

As a result, it’s becoming ever more popular, with more and more ad dollars being allocated to programmatic channels.

Whilst it offers many benefits, it also presents some challenges for both buyers and sellers.

For example, programmatic buying almost always leads to increased competition, driving up the cost of ad space.

There’s also a lot of noise in the ad-space at the moment about how use of personal data and targeting algorithms can lead to issues with data privacy and the potential for discrimination (even if the data has been anonymized first).

Despite these challenges though, programmatic inventory is still being used in the real-world to deliver effective advertising campaigns.

It’s often used to target specific audiences, such as individuals who’ve previously shown an interest in a product or service. It’s also used to retarget customers who may have previously visited a website.

Keeping up with programmatic inventory

For people in the ad sector, it can be difficult to fully understand and keep up with programmatic inventory, as the tech is improving and evolving all the time.

That being said, there are strategies you can put in place to help.

One of the most important things to do is to stay informed about the latest developments in programmatic technology and even more importantly than that, how those developments are being put to use in the sector.

There’s always a slew of training and educational resources out there to better understand the programmatic landscape.

Perhaps an easier way to keep on top of programmatic inventory though is to use solutions and technologies that simplify the process in the first place.

Try using a DSP that will provide a single interface for buying as it makes the entire process much more manageable.

Another example could be to use a DMP (Data Management Platform) to better understand and utilize data for targeting and retargeting.

Finally, if you’ve the budget and resources, emerging technologies like AI and machine learning can help to automate all your processes.

Programmatic inventory is a constantly evolving field and it’s not going away any time soon so it’s essential for anyone in the ad sector to stay up to date with all the latest developments so they can leverage its full potential and deliver effective campaigns.

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