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A Comprehensive Overview of Programmatic Advertising

In recent years, programmatic advertising has gained increasing attention in web advertising. Also called “programmatic buying,” programmatic advertising is driven by a proprietary computerized auction system.

It is a mechanism that automatically bids for slots in real-time to display ads. And even though this type of advertising is convenient for advertisers and publishers, it can also be used maliciously, hurting a company's brand and being a breeding ground for invalid access.

This article will go over the basics of programmatic advertising, the prevalence of malicious ads, and what's at stake.

Evolution of Programmatic Advertising 

Nearly 30 years have passed since programmatic ads were introduced, but after 2010, it has rapidly risen to become a smash-hit in the advertising industry. According to Interactive Advertising Bureau’s 2020 Brand Disruption Report (pdf), programmatic advertising has grown substantially in 2021, with expenditures estimated at $91 billion. 

Programmatic advertising involves automatically purchasing slots and displaying ads according to predefined parameters — budget, bid limit, etc. It is a real-time auction format with most of the contracts in the form of “X amount of dollars per click,” or something similar. Each time a user visits a web page, the advertiser who won the bid at that time gets their ads displayed.

The ad-buying model comes in many varieties. But in general, programmatic advertising is based on this auction principle, with advertisers bidding against each other for ad placement.

Programmatic advertising is often compared with native advertising. But while native advertising is one in which advertisers sell a product without drawing attention to itself, or as David Ogilvy defined it, programmatic advertising is a much larger concept, comprising targeting tactics, algorithmic software, and other systems that handle automated marketing activities.

Why Programmatic Ad-Buying?

Well, programmatic advertising offers publishers the advantage of effectively utilizing surplus inventory advertisers have not already purchased. To understand why adopting this is imperative, we need to understand the historical backdrop behind how it originated. 

Initially, direct display advertising mainly consisted of simple advertising transactions. Over time, as the number of websites increased, transactions became more complicated, and advertisements were distributed through ad networks to avoid additional complications. These ad networks, companies that link advertisers with ad-hosting sites, began to face a newer problem too: surplus ad slots. 

With the intent of monetizing this slot, auction-style real-time transactions called real-time bidding (RTB) were born. Considering that RTB is instantaneous every time a user views a web page, programmatic advertising has enabled advertisers to set conditions in advance and automatically buy and sell slots based on those conditions.

The unpurchased ad slots can now be effectively utilized, thanks to programmatic advertising, creating a mutually beneficial outcome for both advertisers and media publishers alike. 

Challenges with Programmatic Advertising

As long as the site's audience data is accurate, low-quality web pages can and will be sold to advertisers. This is just one of the issues with programmatic advertising, and the risk is in one’s brand image getting tarnished when their ads get displayed on these low-quality sites. 

There is also ad fraud, which wastes advertising funds. Fraudsters manipulate ad interactions with users, gaming the ad ecosystem. In tampering with campaign results, bots continually mimic human behavior and engagement. Additionally, if users' cookies are not properly secured, their personal information can be leaked to multiple third-party websites on the ad exchange.

With all the progress programmatic advertising offers, it comes but at a cost. Luckily, we can minimize the risks by paying close attention to our web and ad performances. And as much as we'll want to do that by ourselves, it is simply more effective to use ad verification tools. 

Ad Verification

To combat the abuse of programmatic advertising by some media companies, ad verification was introduced. It is a feature that helps check whether an ad is being delivered to the target audience originally intended by the advertiser. Verification tools ensure that users’ cookies are not sent by bots and that there is no double-spending on ad auctions.

Ad verification tools usually come equipped with functions like automatic checking and video tracking, necessary to detect and report ad frauds and clutter, thereby making the tools crucial in protecting one's return on ad spend.

Meet Spider AF

At Spider Labs, we offer our own ad verification tool called Spider AF. It is an all-in-one tool that can be used to tackle ad fraud, promote brand safety, and weed out fraudulent users. Whether it is listing ads, app advertising, or other forms of web ads, Spider AF is equipped to help monitor ad performance and spot any issues in the ad operations. Anxious about how ad fraud is impacting your business? Try our free demo today.

Conclusion

As ad management platforms, web traffic measurement tools, and ad verification software evolve, programmatic advertising has, on a broader scale, made great strides in the way we manage advertising operations. With it, advertisers can be assured that they are getting the exact audience they’re after, and publishers have a better chance of making up for lost advertising dollars. These are important steps in a market that continues to grow, and it is up to us to strive and maintain a healthy and sustainable advertising ecosystem.