Programmatic Advertising: a new media phenomenon explained

Programmatic advertising is a powerful tool for brands and companies, be it on the local Mauritian market or internationally. The possibility to program adverts is a leverage that businesses can use to find the right customers, at the right time. In today’s world, programmatic advertising networks are an exceptional way for a product or service to stand out from the competition. In short, programmatic advertising is the apex tool for differentiation in the Digital Information Age.

Questions we will answer in this article

a. What is programmatic advertising?

b. Who are the parties involved in a programmatic advertising campaign?

c. How did programmatic advertising emerge and where do we stand in Mauritius?

First things first! What is programmatic advertising? 

Simply put, it is the use of software to buy advertising slots on websites & other digital platforms. Programmatic advertising removes human negotiations and pre-set prices from the purchase transaction, which allows for data-driven optimization of digital ad campaigns. 

In its most popular form, and dare-we-say most sophisticated form, programmatic advertising makes use of artificial Intelligence and machine learning to enable real-time purchase of advertising banners. The latter ad banners are usually present on websites, apps, and video-streaming platforms which are visited by ideal end-consumers. It is important to note that programmatic advertising is not restricted to real-time bidding of advertising banners. 

Indeed, there are 4 different types of programmatic inventories available to advertisers:

1. Real-time bidding

2. Private Marketplace

3. Preferred deals

4. Programmatic Guaranteed

Who are the parties involved in a programmatic advertising campaign?

For the sake of simplicity, we will say that fundamentally there are 2 parties involved in organizing programmatic advertising campaigns.

  • Advertisers: generally, this means the marketer in charge of advertising for a brand.
  • Publishers: Website owners who wish to monetize their websites by using web banners.

To participate in programmatic advertising, advertisers and publishers must respectively rely on third-party services. Basically, much like any type of trading scenario, there are two sides involved. In this context, advertisers wish to purchase advertising space on publishers’ websites & platforms. And publishers wish to put up their advertising space for rent. For this to happen, each side requires specific tools. On the publishers’ side the required tool is called a Supply-Side Platform (SSP). Advertisers require a tool called Demand-side Platform (DSP).

Supply, Demand and Exchange

SSPs and DSPs are implements that allow each side to transact in a Programmatic Advertising marketplace, which is commonly called an Ad Exchange. Advertising Exchange platforms are virtual marketplaces where programmatic advertising inventories are sold and purchased. An ad exchange democratizes digital advertising in the sense that it gives advertisers and publishers the possibility to better serve end-consumers. All of this while keeping the end goal in mind: to present adverts to the right consumer at the right time, while the consumers are journeying on the World Wide Web.

Ad Exchange platforms are different from Online Advertising Networks. Indeed, advertising networks are more akin to a wholesalers that dispose of available ad space from specific platforms. An Ad Exchange, on the other hand, is a market that provides ad spaces from several ad networks.

A simplified diagram of the Ad Exchange transaction before it appears online

It has been mentioned earlier, and it is worth reiterating: a majority of programmatic advertising is real-time bidding (RTB), but not all programmatic advertising is RTB. Programmatic advertising, simply put, is a way to automate the purchase of ad space from several ad networks.

How did programmatic advertising come to be?

Now that we have established the different actors of the programmatic ecosystem, let’s delve into some historical context of how this method of online advertising came to be. At the dawn of the digital age, banner ads could be purchased in a similar way that we would buy an ad space in a newspaper, magazine, or from a billboard company. There was not much difference between how what we now call the “traditional media” and “new media” operated. Back then, salespeople would reach agreements with advertisers to place a banner on a website for a specific time period. This meant the same banner was always displayed, no matter who visited the site.

The Internet of Things revolutionized the way we consume

As technologies evolved, especially with the advent of the Internet of Things and smart devices, online ad networks took birth. These highly dynamic networks, relying on data provided by consumers, developed statistical algorithms that have the capacity to observe consumer behavior in a way that analog media never could. The Digital Age meant that advertising solutions could provide consumers with information that is much more relevant to their interests and desires, and allowed them for better self-actualization. This paved the way for what is today called programmatic advertising.

Where does programmatic advertising stand in Mauritius? 

In Mauritius, programmatic advertising is still embryonic. There are some significant strides that have been made in the fields of search engine optimization and search engine advertising, especially with services such as Lean Search. Currently, the data shows that social Media advertising seems to be one of the go-to solutions for digital marketing agencies. In that sense, there is a general stasis in digital advertising on the local market. We truly believe that there is an opportunity to recalibrate the state of programmatic advertising in Mauritius. Market research shows that social media advertising and banner advertising will continue to lead the way in terms of ad spend per internet user in Mauritius.

Source: Statista (data for Mauritius)

Digitalgo: scaled programmatic advertising

There is an enormous opportunity to give a breath of fresh air to local agencies with a new programmatic advertising technology so that ad spend can be harnessed to generate qualitative returns on investment. The most daunting issue facing Mauritian website owners in today’s digital economy is that there is a huge disparity when it comes to monetization of their websites. This disparity is explained by reliance on monetization systems proposed by tech monopolies such as Google and Meta. The problem with the current Mauritian digital landscape is the lack of a programmatic advertising ecosystem adapted to the local market. This means that local websites get lost in the vast ocean of the World Wide Web, and have to compete with the gazillions of websites present on international programmatic ad services. This is where Digitalgo comes in. Our mission is to provide a scaled ecosystem, fitted for the local market, where both Advertisers and Publishers can get suitable returns in the programmatic advertising game.

It is time for all actors of the advertising industry to initiate a “renouveau” while giving relevant importance to our local advertising quirks. After all, being Mauritian ourselves, we have been inexorably influenced by the golden-era of traditional advertising. Our outlook for what is coming next is as optimistic as Mauritian advertising has ever been.