Understand What a Programmatic Ecosystem Is

Native ads and programmatic advertising enable a powerful system of advertising inventory buying and selling in a segmented manner. They unlock marketing reach, ensuring that advertisers can target the right audiences with the right products and services at the most opportune times.

Programmatic ecosystems, then, are the applications, mechanisms, methods and digital communications that facilitate how programmatic advertising works. This collection of tools and platforms is part of our everyday life and governs much of modern business, from e-commerce to various types of digital marketing.

This article is your gateway to understanding more about the inner workings of programmatic ecosystems, the related pros and cons and how intuitive digital marketers can derive the most benefit from them.

What Is a Programmatic Ecosystem?

Simply put, a programmatic ecosystem is the fuel driving today’s digital advertising. It involves certain ad tech and platforms that work in sync to power programmatic buying and selling online.

A programmatic ecosystem has three main ‘players’ or levers: publishers, advertisers and a fine process of programmatic ad exchange in between. Programmatic ecosystems play a vital role in business and modern marketing because they define how advertisers and publishers interact with their audiences and prospects.

From pushing and prioritizing premium ad inventory, executing precise ad budgeting and favorable ROI projections to enhancing brand relevance and improving user experience (UX), an effective programmatic ecosystem is the key to winning the digital marketing game.

Marketers have multiple platforms to consolidate. So, let’s lay the foundation with a mini glossary of 12 common terms to familiarize you with the main terminology and some key phrases:

• Advertising campaign — an advertising project defined by specific goals, marketing techniques and strategies for the promotion of a brand, product or service.
• Ad exchange — a tech-powered (automated) platform where advertisers and publishers buy and sell ad inventory.
• Ad inventory — the available advertising space, which is time-sensitive and competition-dependent, that publishers offer advertisers (related to ad space and ‘digital estate’).
• Ad network — a human-owned and managed intermediary in the advertising marketplace where publishers and advertisers interact and transact.
• Advertiser — an individual, group or team looking to buy ad space from a publisher in order to target a specific audience (related to the demand source).
• Publisher — an individual, group or company looking to sell ad space, typically on a website with lucrative traffic potential, to advertisers (related to the supply source).
• Targeting — the persona-led process where advertisers identify their ideal audience (this ad targeting can be geared toward behavioral or contextual data).
• Audience segment — a group of audience members defined by common characteristics, online behaviors, needs and online interests.
• Audience reach — a realistic estimate of the total number of people most likely to receive, view or interact with an ad.
• Bid (or bidding) — the maximum amount of money advertisers will spend to buy ad space from a publisher within the ad marketplace.
• Real-time bidding (RTB) — the ‘open-auction’ model that enables the actual process of ad buying and selling (related to ad inventory or ad space and ad impressions).
• Programmatic media buying — the many different tools, methods and mechanisms involved in ad buying of a programmatic nature.

An Example of Programmatic Advertising Ecosystem: Spotify

It can be tricky to distinguish what is and isn’t programmatic, so let’s briefly look at a really successful model: Spotify. As one of the world’s leading music streaming platforms, Spotify fulfills three roles almost effortlessly: publisher, advertiser and application developer.

Through its programmatic audio advertising platform and service, Spotify leverages its massive user database to:

• Boost brand awareness.
• Customize and share hyper-targeted audio ads in real-time.
• Drive large (and forever-growing) traffic numbers, audience engagement and customer retention.

The engines driving this sophisticated and successful ecosystem are users’ personalized audio listening experiences, habits, interests and locations.

Common Programmatic Methodologies: Types and Purposes

Now that you’ve got a good foothold on programmatic advertising and the fact that there’s a relationship between the publisher and advertiser via an ad exchange process, it’s time to get a little more technical. In the programmatic ecosystem, there are different components that define the most common programmatic methods. Here’s a brief breakdown of the interrelated components:

Creative Management Platform (CMP)

These platforms are the compliance-driven applications that website owners and managers rely on to get your consent. They set the terms, conditions and data policies that govern how you interact with their websites.

Demand Side Platform (DSP)

DSPs are the software advertisers use to facilitate all their ad buying, with automated systems that allow a smooth exchange with publishers through specific digital interfaces.

Supply Side Platform (SSP)

Publishers use SSPs to enable ad selling, helping them manage their available ad inventory and ad space for successful programmatic advertising.

Data Management Platform (DMP)

DMPs are softwares used by both advertisers and publishers to process all the most important information and web traffic details regarding users and website visitors’ online behaviors.

One of the most helpful guiding tips for programmatic strategy done right is knowing how each component of programmatic ecosystems works. That means planning and accounting fully for your unique marketing goals, budgets and efforts in relation to the platforms mentioned above.

Because the numbers matter (and always will), marketing teams can use the following 10 campaign-defining metrics to approach programmatic advertising in a forward-thinking and sustainable way:

1. Ad impressions.
2. Clicks and click-through rates (CTR).
3. Cost per: Click (CPC), Acquisition (CPA), Lead (CPL) and Mille (CPM).
4. Viewability and page views.
5. Audience reach and ad frequency.
6. Conversion rates.
7. Return on Ad Spend (ROAS).
8. Bounce rates.
9. Audience engagement and retention rates.
10. Ad revenue.

The Pros and Cons of Using a Programmatic Ecosystem

Like many other aspects of digital marketing, programmatic advertising has its pros and cons. Some elements of programmatic ecosystems are complementary, others contradictory. Nevertheless, this means that astute digital marketers have to aim to strike the perfect balance for effective programmatic use, execution and evaluation.

Some prevailing pros of programmatic ecosystems:

• Using a programmatic ecosystem will elevate your brand visibility.
• Programmatic advertising encourages and inspires clever, cost-effective marketing spend.
• When executed properly, programmatic enhances ad performance and bolsters your ad monitoring, ensuring you maximize every ad space you buy from a publisher.
• Leveraging an effective programmatic ecosystem ensures granularized behavioral and contextual targeting led by precise audience data.
• Programmatic ecosystems promote marketing efficiency, scalability and SEO.
• Marketers who capitalize on programmatic save plenty of time.

Some prevailing cons of programmatic ecosystems:

• This is a digital evolution after all; there are constant platform changes and viewability fluctuations to contend with and mitigate.
• Ad networks increase ad fraud risks.
• Programmatic ecosystems introduce new user data privacy concerns and loopholes.
• The platform multiplicity involved in programmatic can get complex or overwhelming, particularly for a new or inexperienced programmatic advertiser.
• The programmatic ecosystem model presents unanticipated brand sensitivity and transparency issues.
• Programmatic requires effective planning around ad blockers and website cookie restrictions.

Identifying Programmatic Success: Knowing if Your Strategy Worked

Even after planning and preparing to launch a brilliant programmatic ad campaign, you’ll want to know how effective your strategy is and what you can do to guarantee positive outcomes. Fear not, there are nine tips to ensure smart strategies that yield the desired results.

Tip #1: Set clear online advertising goals that are aligned with broader business goals.

Tip #2: Invest in efficient target audience segmentation tools for granular contextual and behavioral targeting.

Tip #3: Pay close attention to ad placement and bidding for opportune ad inventory.

Tip #4: Continually monitor and track your ad campaign performance, staying abreast of important metrics and then implementing strategy adjustments as required with each ad impression report.

Tip #5: Don’t leave everything to machine learning and automated tools — apply careful human oversight to ensure consistency and full competency.

Tip #6: Align your advertising strategy with the brand development strategy you’re pioneering, parallel to all your marketing projects.

Tip #7: Advertise with intention by prioritizing programmatic platform choices that suit your specific programmatic campaigns.

Tip #8: Prioritize consistent, high-quality ad content and ad inventory that doesn’t rely on ad quantity alone.

Tip #9: Integrate your existing failsafes, like any successful Google ad strategies and programmatic DOOH (digital out of home), into ongoing advertising experimentation and innovations.

Not every programmatic strategy works for everyone all the time. So, over and above the nine tips above, it’s imperative to do regular industry-specific research to unearth and integrate the most valuable market trends for your business.

A Renewed Approach to Programmatic Ecosystems

There you have it: a comfortable introduction to programmatic ecosystems and the power of programmatic advertising to drive traffic, ROI and audience engagement. There are multiple benefits to leveraging the best programmatic advertising platforms, but the key is understanding the needs of your unique:

• Audience.
• Business.
• Long-term goals.
• Marketing projections.

While programmatic is part and parcel of our digital lives and business affairs, there are unavoidable considerations to keep in mind around user data, privacy and legal compliance. Maybe you’re a marketer who needs expert programmatic consultancy or ad mediation to help you bridge the gaps. Either way, programmatic is here to stay, and there’s no better time than now to get involved!