Programmatic technology has become the pipes that connect the digital advertising industry, enabling inventory to flow faster than ever before. Like most advances in the industry, however, the initial appearance of automated media buying was met with suspicion and foot dragging, which eventually gave way to adoption and evangelism. And, in a final sign that the programmatic evolution has unquestionably taken hold, the tactic is being customized to specific nuanced needs.
Today, the programmatic pipes that control the automated flow of previously unimaginable amounts of digital impressions every day are being customized to serve the specific needs of advertisers and publishers of every kind. In the midst of the rapid evolution taking place in the programmatic landscape, it might be a good time to take a closer look at the various ways these pipes can now be configured, each addressing different programmatic needs and strategies.
Open exchanges: Opening the floodgates
Programmatic open exchanges were the first iteration of the programmatic pipeline model. The best way to think about this version of programmatic within the "pipes" analogy is to see the open exchange as a massive open pipeline, delivering automation at true scale. In the early days of programmatic media buying, this kind of automated scale became synonymous with real-time bidding (RTB), a system where the automated auction model could operate free of any modulation.
While the percentage of digital media transactions that ran through the programmatic pipes skyrocketed, however, these transactions largely did not include coveted media budgets from brands and agencies, as they prioritized control over scale. The pipes would have to be more "hands on," allowing ability to regulate the "flow" if a greater portion of advertising budgets were to be won over.
Programmatic private marketplaces: Controlling the flow
In order to service the call for more control over the speed and quality of programmatic campaigns, the industry went to work reconfiguring the programmatic pipes and created the concept of the private programmatic marketplace (PMP). Here, the massive flow of inventory is diverted across smaller groups of publishers and into specific pools based on targeted audiences.
In this scenario, advertisers gain the benefits of the programmatic methodology while maintaining control -- knowing that their ads are running within a closed set of inventory. Rather than just blindly buying programmatic inventory at massive sale, advertisers can now combine automated efficiency with some of the digital audience tactics they have become accustomed to in the direct buying model, including traditional audience targeting by behavior and demographics.
This more customized configuration of the programmatic pipes shares the benefits of the firehose-style open pipeline and begins to deliver the flow to areas where it is most likely to achieve specific goals.
Programmatic direct: Directing the flow
Continuing along the arc of programmatic pipe customization is the rise of programmatic direct. Programmatic direct allows big publishers to create their own set of in-house programmatic pipes by mapping out their existing inventory and augmenting their current inventory pipeline.
Programmatic direct pipes can be custom-built on top of a publisher's existing inventory strategies and can be plugged into either a DSP or another programmatic demand vendor.
This level of pipeline customization attracts publishers that want to get away from the "noise" of the open exchanges and advertisers that want to engage programmatic but also want to maintain ultimate choice over where their ads are placed. This evolving approach employs the sophistication of the private exchange tools while affording publishers and advertisers significantly more control over the process. Advertisers can now move greater budgets into the automated space but retain the one-to-one focus with which they have become comfortable.
The trend toward customization
The arc of programmatic customization has moved forward at what seems an amazing pace. The fact is, however, that this kind of adoption curve -- from skepticism to adoption and then to customization -- is really the hallmark of our industry. From the adoption of the ad network and exchange models to the evolution of targeting tactics, developments have begun on the edges and quickly migrated toward the center, where they become modified to fit the specific needs in the industry.
To this end, the customization of programmatic pipes that are fueling this latest leap forward in the digital media space can be seen as a validation of the importance and staying power of the trend.
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