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Dissecting Buzzwords: What Does Programmatic Mean to You?

  |  November 18, 2013   |  Comments

Everyone is talking about programmatic; it's one of the buzzwords that seem to come up in every conversation lately. Yet are we all talking about the same thing? Does it have more than one meaning? Columnist Larry Allen explores the topic.

shutterstock-151042010Everyone is talking about programmatic; it's one of the buzzwords that seem to come up in every conversation lately.

Yet are we all talking about the same thing? Does it have more than one meaning? Is programmatic used in more than one way in the industry?

One thing is very clear: programmatic is growing and will continue to do so. I currently see three ways it is being used and imagine you can think of more:

  1. Programmatic -- The Real-Time Auction: The most common use of programmatic is in reference to the buying and selling of inventory via an ad exchange, using a second priced auction. Inventory is listed on an ad exchange (such as Microsoft Ad Exchange), which allows DSPs and trading desks to bid in real-time, competing for this inventory.
  2. Programmatic -- The Private Marketplace: Similar to the real-time auction, this level of programmatic sits on the same exchange, but a publisher prenegotiates a price for a set piece of standard inventory -- for example, a 300x600 banner on the homepage. A publisher sets up a unique placement on the exchange with a set floor price and only allows the single buyer to have access to this inventory at that price. Some people refer to this as the DealID.
  3. Programmatic -- The Premium Kind: This is the scenario where a publisher is selling inventory via an automated planning and buying system. It works best for non-standard executions (think native or high-impact creative) where the system is driving efficiency in the process by instituting electronic IOs and simplifying the planning and billing for the buyer. In some cases, this type of programmatic buying even automates the campaign set-up in the ad server.

These are just three examples of how programmatic works today. There are likely more. As always in this industry, be careful about the buzzwords, as they often have more than one meaning.

The world is moving to programmatic for sure, but many things remain the same: Creative is still king. People are more important to the sale than ever before. Deals are still done the old fashioned way. The robots haven't taken over and there is a war waging that I'm not sure they can win.

Are you seeing uses of programmatic not mentioned here? Please share them in the comments so we'll all be better informed about this common buzzword.

Next buzzword up: Viewability. See you then.

Title image courtesy of Shutterstock

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ABOUT THE AUTHOR

Larry  Allen

Larry Allen is SVP, Global Platform Sales for Xaxis. He has responsibility for overseeing solutions for publishers including Xaxis for Publishers, Xaxis Exchange, and Xaxis Marketplace globally.

Larry has extensive experience in digital media, marketing, and business strategy unmatched by most standards. Prior to joining 24/7 Media (which merged with Xaxis in 2014), he held senior management positions at cutting-edge digital media companies such as AOL, Viewpoint, Unicast, Yieldex, Real Media, and TACODA.

Larry also ran his own consulting business where he advised many major media companies such as The New York Times, Meredith, 33Across, and Business Insider. He is a frequent contributor to a number of trade publications, blogs, and industry conferences.

A graduate of Clarion University of Pennsylvania with a degree in Business Management, Larry is based in Xaxis' headquarters in New York City.

Follow him on Twitter at @lawrenceallen2.

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