At the last episode, we had an introductory talk about the concept of programmatic advertising, so:

Why does programmatic matter?

Well, to advertisers, it is typically a more cost-effective, quick and easy way to plan and place media buys.

Why use humans to research and negotiate with the sales teams of hundreds of publishers, to pay expensive, high rate ad placements? Programmatic buys typically end up at a fraction of the cost, and all with an unbelievable level of consumer targeting capabilities that were historically unavailable.

As for why the publishers should care: they may no longer need expensive human sales teams selling out their ad inventory.

But, more importantly, given how far lower the Cost per Thousand Impressions (CPM) ad sales rates are in the programmatic vs. human world, they need to pay particular attention to how far their overall ad revenues may fall by launching programmatic solutions.

The guess is, at some point, they will not have a choice, and all publishers will need to be in programmatic, in one way or the other.

Where does the consumer data come from?

There are three major types of consumer data sources, used in targeting ads to consumers.

  • First party customer data is the cleanest, directly captured by consumers (e.g., their name, address, demographics), from that specific publisher.
  • Second party data is similar to first party data, in that the data was directly captured from consumers, but is being sold by a third party that did not actually capture the direct data themselves.  The benefit of second party data is the greater reach than first-party data, as it can be aggregated from numerous sources.
  • Third party data is anonymous data, captured by companies that that were never involved in any original transaction or engagement with a customer, but can append certain data from third party sources or use sophisticated algorithms to determine key classifiers (e.g., demographics, interests, affinities, behaviours, intent to purchase).

Please do share your thoughts, comments or questions in the box provided below. Also, do find full archive on programmatic advertising here: https://www.tinklingd.com/programmatic-advertising

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