Published · By Ailumic

What is programmatic advertising?

Programmatic advertising is buying ad space with software instead of phone calls and contracts: each time someone opens an app or a page that has an ad slot, an auction decides which ad appears there, in a fraction of a second. For a small business it means you can start with a small amount, choose where and for how long, and see afterwards what each showing did. The software that does the buying on your behalf is called a demand-side platform.

What it replaced

Buying ad space used to mean finding the app or the website, agreeing a price and a period with a person there, sending the ad, and waiting for a report. That works for an advertiser with a media team and a large budget. For anyone else it is slow and awkward. Programmatic advertising moves the same buying into software, and into the moment the slot appears.

How it works

When someone opens an app or a page, each ad slot on it is offered for sale. Software working for advertisers looks at the slot, each names a price, the best bid wins and its ad is drawn there, all before the screen has finished loading. Our guide on how real-time ad auctions work goes through it step by step.

What you decide, and what the software does

  • You decide how much to spend, where the ad should be seen, for how many days, and what the ad says.
  • The software decides, for every slot that comes up, whether it is worth bidding for and at what price, and keeps the spending within the amount you set.
  • The report tells you afterwards where the ad ran, when, and what it did.

What it is not

It is not an ad on a search page or a boosted post on a social network. Those are bought inside the search engine or the social network, in that company’s own auction and with its own tools. Programmatic advertising buys slots across many apps and websites at once, from one place. Nor does it promise a result: it puts your ad in front of people, and your report shows what they did next.

What to check before you try one

  1. Is there a minimum to start?
  2. Do you see the price before you confirm?
  3. Can you pause or stop whenever you like?
  4. Do you get a report you can read without a glossary?

Those are the four questions we would ask. Ailumic’s answers: Start with what you have — there is no minimum. The price is in front of you before you confirm, and nothing runs until you do. No long-term commitment: pause, change the budget or stop whenever you like. Pricing, fees and payment terms will be provided before you commit to a paid campaign.

Example

A florist wants to be seen by people in her town in the week before a holiday. By phone and contract she would have to find the apps and sites her customers use and negotiate with each. Programmatic, she sets an amount, the area and the dates, and the software bids for the slots that come up there in those days. Her report then says where the ad ran and when.

Guides

  • How do real-time ad auctions work?

    Every ad slot is sold in an auction that lasts a fraction of a second. Who bids, what decides the winner, who pays, and what it means for a small budget.

  • What is a CPM in advertising?

    CPM is the price of showing an ad one thousand times. Why ad space is priced per viewing, what moves the price, and why Ailumic publishes no price list.

  • Banner, native or full-screen: which ad format should a small business choose?

    A banner runs beside the content, a native ad sits in the feed, a full-screen ad fills an app between pages. How to pick one for the ad you have.

  • How much should a small business spend on ads to start?

    Size a first ad budget by what you can afford to learn from, not by a rule of thumb: enough to run a full week, small enough that a lesson with no sale is fine.

  • How do I read an ad report?

    Read an ad report in order: times shown, clicks, cost, then where and when it ran. What the click-through rate tells you, and what to change next.

  • How long should an ad campaign run?

    Run a first ad for a full week and no longer than it takes to learn one thing. Why a week, why not months, when to stop early and when to add budget.

  • What is a DSP, or demand-side platform?

    A DSP is software that bids for ad space on an advertiser’s behalf. How it differs from an ad exchange and a supply-side platform, and where Ailumic fits.

  • How do ads in mobile apps work?

    An app sets aside ad slots, sells each one in an auction as it is about to appear, and draws the winning ad. What an advertiser chooses and sees afterwards.

  • How do I write an ad for my small business?

    Write one message for one kind of person, say what to do next, and cut the rest. How to fit it to a banner, native or full-screen ad, and when to rewrite.