As you are probably well-aware of, the programmatic advertising market comprises two main parties who are engaged in automated buying and selling of digital ads: advertisers (buyers of ads) and publishers (sellers of ad spaces). But, given the inherent complexity of programmatic solutions, it shouldn’t come as a surprise that programmatic advertising space also includes various other service and solution providers. Such as SSPs (supply-side platforms), DSPs (demand-side platforms), ad exchanges, ad networks, and ad agencies.
The latter are the ones we would like to talk about today. It isn’t uncommon for both publishers and advertisers to be confused about what a programmatic media buying agency really is, and what role such agencies play on this market.
What is a programmatic media buying agency?
In order to understand which companies can be classified as programmatic media buying agencies and what is their market role, we would need to clarify two basic things: what is programmatic media buying and what is a programmatic agency.
What is programmatic media buying?
When we talk about programmatic media buying, we essentially mean using all kinds of programmatic tools and solutions to automate and advance the process of buying digital advertising space. In other words, programmatic media buying describes all activities that involve using sophisticated programmatic tools for the ad buying process, as well as for end-user targeting and data collection. So in many ways, programmatic media buying can be described as the opposite from the traditional approach to buying and selling digital media, which often is based on manual methods.
What are the types of programmatic media buying?
Talking on the subject of programmatic media buying, we should probably also cover the three main types of this process, as understanding the differences between them is quite important.
- Real-time bidding (RTB)
Real-time bidding is a practice of buying and selling ads on a per-impression basis via instantaneous programmatic auctions. It is similar to the ones facilitated during stock market trading. RTB is a type of programmatic media buying. It is typically conducted using SSPs or ad exchanges. We have a whole separate article describing real-time bidding in more detail.
- Programmatic direct
Programmatic direct is another form of programmatic media buying where a publisher sells media inventory directly to a specific advertiser at a negotiated cost fixed cost per mille (CPM). Generally speaking, programmatic direct is a way to automate the negotiation and sales of a publisher’s inventory in the case of a direct sale to a specific advertiser.
- Private marketplace (PMP)
Finally, there are private marketplaces, which basically function based on the principles of RTB auctions. The only difference is that PMPs impose restrictions on those who can participate in the bidding process, allowing only pre-selected advertisers to enter. Sometimes, publishers are allowed to participate in the PMP selection process, choosing advertisers they want to sell their inventory to.
What is a programmatic agency?
Now, in many ways, programmatic media buying agencies emerged as a market’s way of consolidating talent in the digital media buying space. Originally, when programmatic advertising technologies were just at the beginning of their evolution, advertising agencies and holding companies formed so-called trading desks. When the programmatic media buying methods evolved and the real-time bidding solutions were introduced, the trading desk business model became practically obsolete. This is when the talent associated with media buying in programmatic space moved to programmatic agencies.
What is the purpose of a programmatic media buying agency?
It’s quite simple really. Since programmatic advertising requires both publishers and advertisers to utilize a wide range of technological tools, such as SSPs, DSPs, DMPs (data management platforms) and other instruments, agencies have emerged as providers of solution management and consulting in this field. In other words, what a programmatic media buying agency typically does is managing and operating ad media buying campaigns on behalf of advertisers (brands).
Why do advertisers work with programmatic media buying agencies?
Naturally, media buying agencies are the ones that represent advertisers and brands, running all the processes of a programmatic ad campaign execution for them. This is why, as a publisher, you will most likely deal with a lot of agencies when selling your ad inventory through SSP solutions and other platforms. It is safe to say that, in most cases, you won’t be able to avoid interactions with programmatic agencies.
Here are several key reasons why advertisers, including many major global brands, go with programmatic media buying agencies instead of running advertising campaigns on their own.
- Expertise in programmatic media buying.
Media buying agencies, specializing in programmatic advertising specifically, typically employ the talent required for the success in such operations. For many brands, using an agency is a more cost-effective way of running a programmatic advertising campaign as opposed to having an in-house team of programmatic specialists.
- Lower costs.
When hiring a programmatic media buying agency, brands also minimize their costs by not having to spend any money on the actual programmatic technologies, such as white label programmatic advertising DSP solutions. Instead, agencies are responsible for maintaining their technical stacks, and they are the ones paying for it.
- Ad campaign optimization and data analysis.
And the final third major function of a programmatic media buying agency is to apply its expertise to optimize ad campaigns for brands, minimizing their ad inventory expenses. This also includes the collection and analysis of data related to the ad campaign by the agency, to gain insights and increase cost-efficiency.
As you can see, programmatic media buying agencies are mostly acting as intermediary service providers, taking care of all the aspects of programmatic advertising campaigns for brands. And brands hire agencies because it mostly works well, allowing them to minimize costs and maximize efficiency.
If you are wondering if there are any service providers able to do the same thing, managing all the aspects of programmatic advertising, but for publishers. The answer is: yes, there are firms that specialize in supporting all programmatic needs of web publishers.
This is us! The pubGENIUS team consists of highly experienced specialists who are well-versed in the best practices and trends of the industry. We know how to utilize innovative technologies and ad unit types to optimize websites for individual publishers. We will make sure that your web properties are using the most relevant monetization methods and your ad inventory is set up and operating with maximum capacity at all times.
Get in touch with pubGENIUS Team to get free consultation 🙂