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PHARMA

The Basics of Programmatic for Health

March 3, 2020
Jason Scheller

This blog post is the first of a four-part series which will help you better understand the world of programmatic, how it works, and how it applies to the Health.

Programmatic advertising technology has revolutionized digital media buying through the benefits of automation. Unlike the traditional media buying process, which included RFPs, negotiations and manual insertion orders, programmatic ad buying automates all of this using software to facilitate the buying and selling of ads. But for those not familiar with programmatic, it can seem daunting at first. Being able to make the transition from a traditional process to an automated one requires some basic understanding of the terminology, what it looks like in practice, and a clear knowledge of the benefits to be able to sell the transition internally.

Understanding programmatic advertising

The first step in getting a grasp on programmatic healthcare advertising, is to establish a baseline of knowledge. That means understanding the key terms, technologies, and components involved in a programmatic workflow:

  • Publisher: The site that the user visits, which holds the ad inventory. This is where your ads will be placed.
  • Advertiser: Companies or agencies which represent different brands who want to place ads on the publisher’s site.
  • DSP: Demand Side Platform, which is the one bidding on ad space, representing the advertiser who pays for the inventory. This is the platform that a healthcare marketer will use.
  • SSP: Supply Side Platform, which is the side helping the publisher to monetize their ad inventory. DSPs communicate with SSPs as part of the automated workflow.
  • RTB: Real-time Bidding, which is the live auctioning of ad inventory from publishers to the DSPs which utilizes user data to access the value of an impression. 
  • Ad Exchange: A dynamic technology platform which facilitates the digital media buying between advertisers and publishers.
  • Endemic: For Health, an endemic publisher is one whose business is focused in the Health sector (e.g. Drugs.com)
  • Non-endemic: For Health, a non-endemic publisher would be one whose business is not focused on Health, but may have content adjacent to it (e.g. CNN.com/health).

‍Programmatic healthcare in action

‍Now that you have a basic understanding of the concepts in programmatic advertising, let’s look at an example of a single ad impression relevant to Health to better understand how the process works and the underlying benefits.

As you are probably aware, a publisher has a certain number of ad impressions to sell. This is calculated by the amount of visitors they have multiplied by the number of ad spots across all of their web pages and adjusted based on an analysis of growing or shrinking traffic. 

Before programmatic, an endemic publisher—”Endemic.com” for this example—used to need a full sales team to sell those ad impressions to a health brand. The health brand would buy some of those impressions based on whatever amount of knowledge the publisher could provide them about the audience gathered from website analytics.

With programmatic, though, the health brand can buy the audience they want to target (like those who visit Endemic.com) through their DSP and reach them wherever that audience is online in the form of ad impressions. But there is more than one health brand who would like to reach the audience visiting endemic.com and there are only so many impressions to purchase. That’s where auctions come into the programmatic process. The RTB process begins when an internet user accesses a website or application, and the publisher’s site signals to the SSP that there is an impression available. The SSP analyzes the user data, sends it to the ad exchange, and the data is relayed to the DSPs. The DSPs then bid on the ad impression based on their value parameters set by advertisers during programmatic campaigns. The highest bidder wins, and their ad is displayed to the user. All of this takes place in an average timeframe of about 20-50 milliseconds. 

The benefits of programmatic healthcare advertising

Programmatic healthcare advertising allows brands to hypertarget their messaging and reach the consumer (DTC) and healthcare professionals (HCPs) who will identify with it. This gives advertisers the ability to reach niche audiences, which is vital in today’s world when there are more drug approvals for rare and specialized diseases. HCPs are also increasingly difficult to reach, with over 50% of HCPs being no-see. With the opportunity to make cross-channel programmatic buys and create custom creatives for specific patient segments, programmatic enables the more effective targeting of patients and providers across the digital landscape through powerful DSPs.

And the benefits of programmatic advertising have been proven time and again. Not only does it allow marketers to leverage real-time optimization and data insights for enhanced targeting or decision making, but it provides those same marketers the ability to reach and scale access to digital audiences with cost-efficiencies and insights to invest in what’s working.

Once you’ve realized that programmatic advertising is better than a manual process, you’ll need to pick a DSP who can provide you the functionality to manage campaigns and measure effectiveness. Check out our blog post, 7 Questions to Ask Your Potential Programmatic Partner to learn about selecting your DSP.


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