Insights

The Basics of Programmatic for Health

March 4, 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. For more information on programmatic for health marketing download the eBook “Programmatic Health Anthology” or listen to our Programmatic Podcast.

Programmatic 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.

The benefits of programmatic include:

  • Real-time optimization and data insights for enhanced targeting and decision making
  • Ability to reach and scale access to digital audiences
  • Cost-efficiencies and insights to invest in what’s working 

In health, programmatic 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.

For context around programmatic, it’s helpful to remember a few of the key terms that define its pieces.

  • Publisher: The site that the user visits, which holds the ad inventory. 
  • 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.
  • SSP: Supply Side Platform, which is the side helping publisher to monetize their ad inventory. 
  • RTB: Real-time Bidding, which is the live auctioning of ad inventory from publishers to the DSPs that utilizes user data to access the value of an impression. 
  • Ad Exchange: A dynamic technology platform that 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).

Now, let’s look at an example of a single ad impression relevant to Health to better understand the impact of programmatic:

Before programmatic, an endemic publisher—”Endemic.com” for this example—used to need a full sales team to sell their audience to a health brand. The health brand would buy that audience based on whatever amount of knowledge the publisher could have provided up front. With programmatic, the health brand can buy the audience they want to target (like those who visit Endemic.com) and reach them wherever that audience is online in the form of ad impressions. 

This is where auctions come in. 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. 

This post has provided you with a very basic overview of all the players involved in programmatic advertising, its application to health marketing, and an intro to auction mechanics. For more details on all of this, read our Programmatic Health 101 eBook or listen to our Programmatic Podcast. In future segments of this blog series, we will discuss more about programmatic, including retargeting, different buying options, algorithms and more.

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