How to Buy Digital Advertising: Direct Buy versus Programmatic

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Deciding how to buy digital advertising can seem overwhelming if you haven’t done it before. There are limitless websites and search engines that sell online ads, including the popular display and paid search options.

The first step is to determine whether to purchase ads directly through a publisher, or through a third-party ad server like Google or Facebook. The following is a basic comparison of the features and benefits of the two basic approaches to buying digital advertising: Direct buy versus programmatic.

Direct Buy Digital Advertising

With direct buy, ad space is purchased directly from the publisher. The cost per thousand is typically much higher with direct buy than through programmatic. The challenge of having to sell and maintain ad inventory is one reason publishers have shifted toward programmatic in recent years, though.

Direct buy does give advertisers greater control in the placement and delivery of the ad, similar to a traditional media purchase. It also allows for more flexible sponsorship relationships. Publishers can often provide advertisers data before and after implementation of advertising campaigns as well.

Programmatic Digital Advertising

With programmatic advertising, ad buying is facilitated through an automated software program. It occurs through private systems (56 percent of programmatic spending) and through third-party ad networks (44 percent of programmatic spending).

The technology behind programmatic is amazing. Advertisers can segment their market by factors such as geo-location, demographics and content preferences. Through the use of “Cookies”, advertisers can deliver personalized, relevant ads to users based on previously visited websites. You can set up retargeting campaigns, for instance, that deliver specific ads to people who have visited your website.

U.S. Programmatic Digital Display Ad Spending

Third-Party programmatic is facilitated by an ad server that connects advertisers and publishers. These ad networks, including Google, give advertisers large-scale reach. Because of the large network, the CPM is usually much lower than it is through direct buy. This reality creates challenges for websites and publishers looking to sell direct ads at a premium.

Publishers often turn to third-party programmatic to fill excess ad inventory. Non-disclosure agreements sometimes limit data available to advertisers and agencies. Amazon.com, Goodreads and DigitalPoint.com are examples of websites that offer private programmatic buying opportunities to reach a large, sometimes niche on-site audience at an affordable rate.

Conclusions

This is a basic look at direct buy versus programmatic advertising options to help you get started in evaluating how to buy digital advertising. If you choose to purchase ads directly, the number of publishers you could work with is virtually limitless. With programmatic, Google and Facebook dominate digital advertising spending.

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About the Author: Neil Kokemuller

Neil Kokemuller is a veteran college marketing professor with an MBA. He has also been a freelance business and marketing content writer and website creator since 2008.

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