What is programmatic?
If you’ve read the previous article in the series of ‘Getting Started’ tutorials, you probably don’t have this question in your mind. Mostly because I didn’t ever mention the word ‘programmatic’. But I am now. Why?
Well, I previously drew a comparison between CAASie.co and Booking.com. However, I did say that CAASie is different. Programmatic is how.
I recently booked a hotel for myself and my partner to stay in Sydney for a few weeks (yay). I used Booking.com to do this. Let me walk you through the process. Firstly, I tell Booking.com my dates, where I’m going, and some key requisites of the place I’d like to stay. In my case, this was a private bathroom (at the very least, sheesh!). The site then crunches my requirements and spits out a few options, and I choose the hotel I’d like to stay at, and then I enter my credit card details, and I’m done.
You see, that’s a fixed buy. The hotel and I have effectively entered into a contract for them to serve me their room in exchange for my money, for the duration of my stay. In other words, I’ve ‘booked’ it. Duh. Nobody else can take that spot now that it’s mine.
This booking mechanism is brilliant for hotels, because at the very least, you’re staying for at least one (1) night. And even though it’s tedious if everyone stayed only for one night, it’s still not an administrative headache. Of course, most hotels would prefer you stayed longer because it makes life easier for them. This is why most hotels have minimum durations. You must book for a night. You can’t (in most cases) book a hotel for an hour, let alone a few minutes.
Historically, this problem plagued out-of-home providers as well. Take a static billboard for example. You need to hire someone to go out to the site, peel off the wrap (or unpaint it) every time the ad needed to be changed over. Hence the lunar cycle ad rotation. The duration was both necessary and practical for media owners to adopt.
Enter: digital OOH (dOOH).
dOOH upturns this above mechanism. These digital sites generally serve multiple ads on the same board. Usually in the form of a slideshow or similar. So, during any time of the day, the board ‘rotates’ or ‘flips’ between slides from different advertisers. The slideshow approach had many advantages over static. Namely, the ability to change ads without having to send someone out to repaint anything.
Fantastic. But that had a flow-on effect. Because we no longer had to send out anybody to change the ads, it meant that there was no reason to do fixed buys. Now, with dOOH, there’s no reason why we should be doing Booking.com-style buys with minimum durations and fixed terms. dOOH has had the ability to be purchased on demand. In other words, it can be purchased down to the second. Well, down to a few seconds, anyway.
But how do you manage selling ads by the second? How do you avoid the administrative nightmare? If each ad lasted 10 seconds, and there are 86400 seconds in a day, that’s 8640 ads that need scheduling. Daily.
Programmatic literally means ‘according to a programme or schedule’. In the context of dOOH (or any digital advertising, really) it means to automate the serving of ads from buyer to seller.
So, let’s say the dOOH board still operates a slideshow as per usual, with every ad running for 10 seconds. Except this time, the board is connected to the internet, and it has no idea what ads to play ahead of time. In other words, every 10 seconds, it has to ask the internet ‘hey, internet - do you have an ad for me?’ and the internet (in its great glory) would say ‘yep, here you go’, and it’ll stream an ad to the board.
That’s programmatic, in a nutshell. It’s a way for boards to reach out to the internet for their ads, and save their owners a massive administrative headache by automating the trade of ads.
And what does that mean for the advertisers? It means they get an incredible level of flexibility in the way they serve ads. With CAASie.co, advertisers can purchase down to individual 8, 10, 30 second blocks of ads at any time of the day, whenever they like. And, since they’re not committed to any given creative, they can change it at their leisure. In other words, if they wanted to buy 8 seconds of ad time and that was all - they could do that. I’m not going to condone it - but it’s possible to do.
Programmatic is truly a game-changer for both buyers and sellers of dOOH. Where historically sellers would take on administrative overhead for every sale of OOH inventory, and advertisers would have to commit to a fixed buy (à la my Booking.com analogy), programmatic means little to no administrative overhead for ads served.
So, media owners can focus on what they do best - creating fantastic ad placements. Similarly, advertisers can spend more time getting creative, and less time signing contracts.