Web ads have evolved from simple text and image banners to interactive modules, video advertisements, and even high-quality downloadable content. Programmatic monetization is the latest development in modern web advertising. It is a form of online advertising in which publishers sell their ad inventory through automated, real-time bidding exchanges. Publishers who use programmatic monetization services can use multiple marketplaces to maximize the value of their available inventory.
It is also referred to as a demand-side platform (DSP) because it allows advertisers to buy ad inventory through automated means rather than having to negotiate with a publisher’s sales team. Simply put, programmatic monetization is a modern approach to the process of programmatic buying and selling of ad inventory over the internet. Traditional methods of advertising sales often include lengthy negotiations between publishers and advertisers; this can be time-consuming and risky for both parties, as the advertiser may not like what they see or vice versa.
Programmatic monetization helps to increase the efficiency of ad inventory sales by simplifying the process that both parties must go through. It helps publishers by 1) improving ad inventory quality and increasing revenue potential; 2) reducing the costs associated with manually selling advertising space, and 3) facilitating a better user experience. By enabling automation in the ad buying and selling process, programmatic monetization provides significant benefits for all parties involved in the process.
How Does Programmatic Monetization Work for Publishers?
Using the technology of real-time bidding (RTB), ads can be instantly purchased and displayed based on an algorithm. Real-time bidding is a process where publishers’ ad space is auctioned off in real-time to the highest bidder. Processes like programmatic monetization help optimize the buying and selling of ads by allowing bidders to see what others are paying for advertising inventory and adjust bids accordingly, ensuring that their ads are shown to the target audience for the lowest possible price.
Digital marketers can also bid on specific types of users to better target potential customers. For example, a footwear company can indicate that it wants its ads to be shown only when people search for “running shoes”.