A programmatic advertising campaign works by using software and algorithms to automate the buying and selling of digital ad space. Here’s a basic overview of how programmatic advertising works:
- Advertiser sets campaign objectives: The advertiser sets the goals and targeting criteria for their ad campaign, such as the target audience, ad formats and budget.
- Ad exchange: Ad inventory from multiple publishers is made available on an ad exchange platform. Publishers can make their inventory available on the exchange and advertisers can bid on it.
- Ad auction: When a user visits a website or app, an ad impression is generated and a real-time auction takes place to determine which ad will be shown. Advertisers bid on the available ad inventory and the highest bidder’s ad is displayed.
- Ad delivery: The winning ad is delivered to the user’s device and displayed within the content they are viewing.
- Optimisation: Each programmatic advertising platform uses algorithms to track the campaign performance of ads and optimise them for better results. This includes analysing user behaviour, click-through rates and other metrics to adjust targeting and bidding strategies.