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Programmatic Buying Channels Demystified

Niveditha Viswanathan
Product Marketing Manager, InMobi Exchange
5 min read
Posted on February 26, 2015

Programmatic buying is now on every brand marketer’s agenda. However, the world of programmatic buying is ever evolving, dynamic, and complex. Brand marketers seek to clearly understand the nuances inherent in different types of programmatic channels. Buying could occur through auctions in a closed chamber, in an open field, or among various kinds of participants.

Among various programmatic channels, the Open Exchange is perhaps the most straightforward. As the name suggests, it is an auction where ‘all advertisers are welcome’. In an open exchange, the advertiser with the highest bid wins the auction and thereby the ad placement.

Then there are two other key programmatic channels - Private Marketplaces (PMP) and Programmatic Direct.PMP and Programmatic Direct are two very distinct channels though they are easily confused. In a nutshell, a PMP is like a walled garden that limits participation of demand and supply, whereas Programmatic Direct is an automation tool for direct sales.

In a Private Marketplace, a publisher invites a shortlist of advertisers that are relevant for their app/ website. An auction is conducted between the select advertisers, for that publisher, and the advertiser with the highest bid wins the auction. In effect, a PMP is similar to Ferrari’s invite-only models; that are opened up to only a few (lucky) buyers.

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Programmatic Direct, on the other hand, automates the standard IO process thereby letting advertisers buy targeted supply through an exchange. The automation is done at two levels - 1) Identification of relevant supply and audiences for the brand and 2) The IO process of campaign delivery. Programmatic Direct is similar to having a customized Harley Davidson delivered to a customer, suiting all her specific needs.

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Programmatic buying creates an efficient delivery channel and offers a tailored solution to advertiser needs, while helping publishers retain control. For marketers, this is the next wave that can redefine their mobile advertising trajectory.

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