Programmatic advertising was created to make ad buying and selling easier. That’s because it gives brands the ability to buy inventory at scale, in real time, and across platforms.
Compared to traditional advertising — which is done through manual or one-to-one deals — programmatic helps advertisers save time and money while gaining reach and revenue. In fact, programmatic ad spend in the U.S. reached $79 billion in 2021, accounting for over half of all media budgets.
Still, there are certain programmatic advertising terms and practices that can be tough to wrap your head around. Like, what are the different types of programmatic advertising? What is RTB? And what is programmatic guaranteed vs. PMP?
Whether you’re just getting started with programmatic advertising or looking to revamp your strategies, it’s important to understand the ins and outs of programmatic so you can build the best deals for your advertising goals and campaigns.
That’s where this guide comes in.
We’ll help you make the most of your programmatic native operation by unpacking:
- Types of Programmatic Advertising
- What is Programmatic Direct?
- What is Programmatic Guaranteed?
- What is Programmatic PMP?
- How to Set up a PG Deal
Types of Programmatic Advertising
Programmatic advertising is the process of using technology platforms to automatically buy and sell digital ad inventory. At its most basic level, programmatic uses customer data and algorithms to match relevant ad content with available publisher inventory in real time.
Programmatic advertising can be accomplished in several ways. To start, it’s important to consider: What are the four types of programmatic inventory? They are:
- Real-time bidding (RTB) or open auction
- Programmatic direct
- Programmatic guaranteed
- Private marketplace (PMP)
With RTB, for example, advertisers upload their ad content to to a demand-side platform (DSP) and set their highest bids by cost-per-thousand-impressions (CPM). The DSP then communicates with the publisher’s supply-side platform (SSP) and ad exchange to find the right fit — based on data and bids — for each ad slot. RTB is a popular programmatic buying option because it’s cost-effective and easily scalable.
Now, let’s take a look at the more exclusive types of programmatic advertising deals and what they entail.
What is Programmatic Direct?
Programmatic direct advertising is the process of buying ads on a one-to-one basis — directly from publishers. This may sound just like traditional advertising, but it’s not. That’s because programmatic direct deals still happen through an advertising platform like a DSP, SSP, or ad exchange.
So, which is better: RTB programmatic vs. direct programmatic? That depends on your goals and budget. Programmatic direct can be pricier and less scalable than RTB because deals are made on a one-to-one basis. The upside is that programmatic direct comes with more transparency and brand safety, since advertisers can vet each publishing partner and ad deal individually.
What is Programmatic Guaranteed?
Programmatic guaranteed occurs when a publisher and advertiser agree on a fixed — or guaranteed — CPM for a deal. Alternatively, a programmatic preferred deal happens when the publisher sets aside inventory for a particular price, but the advertiser isn’t guaranteed to buy it through their programmatic DSP.
So, is programmatic direct the same as programmatic guaranteed? No, programmatic guaranteed is a form of programmatic direct, since it involves a one-on-one exchange.
Programmatic Guaranteed Pros and Cons
Programmatic guaranteed has its advantages and disadvantages for advertisers — depending on what they want to get out of their ad campaigns.
This biggest pros of programmatic guaranteed include:
- Access to premium inventory. Advertisers can enjoy high-quality, hand-picked ad units that are customized to their needs.
- Improved transparency. Compared to RTB, programmatic guaranteed deals can be less risky, weeding out fraudulent sellers and unsafe placements.
- Greater control over ad distribution. With programmatic guaranteed, advertisers can always know where their ads will run and at which price.
Meanwhile the downsides of programmatic guaranteed are:
- Decreased scale. Since guaranteed deals are made directly between parties, they can’t be completed en masse like automated RTB deals can.
- Less flexibility. Advertisers are locked into their guaranteed ad buys, so they may not have an opportunity to change their mind or reassess after they strike a deal.
What is Programmatic PMP?
A PMP is a private marketplace to which only certain advertisers are invited. It functions like an open RTB auction, but it’s exclusive to select ad buyers. With PMP programmatic deals, publishers can hand-pick trusted brands and advertisers gain premium access to high-quality inventory.
Programmatic PMP Pros and Cons
The most notable advantages of programmatic PMP deals are:
- Automation and access. PMPs offer the best of both worlds — the automation of RTB auctions with the exclusivity of direct deals.
- Enhanced customer targeting. Publishers may offer PMP buyers better access to their audience data, helping them deliver more relevant and engaging campaigns.
On the other hand, the possible risks of PMP deals include:
- Less scale. PMPs may offer less ad units than an open auction market does.
Programmatic Guaranteed vs. PMP
Programmatic guaranteed and PMP deals are each exclusive in their own way. While programmatic guaranteed deals are built directly between two parties, PMP deals are created within a marketplace of other advertisers. So PMP deals are more private than RTB auctions but not as private as one-on-one, guaranteed negotiations.
How to Set up a PG Deal
Advertisers can set up a PG deal or programmatic guaranteed deal in a few key steps. While the exact process will vary according to your programmatic advertising platform, setting up a PG deal usually involves:
- Uploading your campaign information and customer data to your DSP
- Sending a request for proposal (RFP) to a publisher
- Negotiating the terms of your proposal, including ad impressions, audience segments, and run time
- Choosing your campaign creatives and targeting options
When setting up a programmatic campaign through their DSP, advertisers can also find premium publishers through a third-party programmatic platform. Taboola, for example, has direct integrations with the world’s leading DSPs, helping advertisers reach over 500M daily active users across 9,000 publisher properties.
With Taboola’s exclusive inventory and readership data, advertisers can run programmatic video and image ads that expand their reach and generate results.
It’s important to understand the different types of programmatic advertising, so you can set up the right campaigns and publisher partnerships for your business.
As you go about building your programmatic campaigns, you can also use our programmatic creative best practices and case studies to guide you. Also, check out our step-by-step guides to creating a native display deal through Google’s DV360 and creating a programmatic deal through The Trade Desk.
Ready to drive more traffic and conversions through the power of programmatic advertising? Get started with Taboola.