Programmatic Media Buying vs. OEMs: How to Benefit

Programmatic media buying has become an everyday component of a marketer’s operations: Programmatic ad spending was worth 127 billion last year, with a forecast of 147 billion for 2021. Moreover, 75% of senior marketers allocate a portion of their video spend to programmatic buying. While there are clear advantages to this advertising method, it is equally important to assess where programmatic falls short – and identify whether there is a better option. This guide defines programmatic media buying and OEMs to outline what makes them unique and how you can benefit.

What is programmatic media buying?

Programmatic media buying is an automated process where advertising (ads) space is bought and sold based on bids and set parameters. The process uses data and algorithms to serve targeted adverts. Prior to this process, advertisement space was sold manually and consumed more of the marketer’s time and attention. This involved multiple requests for proposals, constant communication, and manual orders. Moreover, ads were purchased in bulk and the advertiser did not have much control over ad placement. In this way, programmatic media optimizes a marketer’s workflow and offers clear benefits to advertisers.

Programmatic media buying: How it works

There are three types of programmatic media buying. Real-Time Bidding (RTB) or ‘open auction’ is when inventory prices are defined via a real-time auction. This cost-effective type of bidding is open to any advertiser or publisher. It is used to buy media with large audiences. There are also Private Marketplaces (PMP), which are restricted auctions that are invite-only, meaning only invited advertisers have access. Lastly, publishers can bypass auctions altogether and sell inventory at a fixed cost per mille (CPM) to advertisers. This is called Programmatic Direct.

Programmatic media buying is seen as a smart way to bid on ad inventory because it cuts out the middleman – streamlining the ad buying process. It also serves ads that are more relevant (compared to traditional media buying) and advertisers gain access to more publishers.

Does programmatic media buying deliver on its reputation?

Despite the benefits, there are still significant problems with programmatic media buying when it comes to ad fraud and transparency. Ad fraud is a legitimate, widespread concern for advertisers and programmatic media buying does not present advertisers with the necessary transparency to know they are getting what they paid for. This is where working with OEMs presents a unique solution for advertisers: OEMs are the best and only way to enter a fraud-free environment where you work directly with the publisher at scale.

What is an OEM?

An OEM (original equipment manufacturer) refers to companies who make their own phones and have their own OEM apps. For example, Samsung, which sold 55.76 million smartphones in the Q2 of 2020, has its own OEM app store and the company’s native apps. This presents a smart way to advertise to untapped audiences at a great price. While there are 1,153 new apps released every day on the App Store and 3,119 new apps each day on the Google Play Store, OEM app stores present alternatives to those apps that marketers can use to achieve their targets and increase ROAS.

The likes of Xiaomi, Huawei, Vivo, and Oppo are distributing apps to customers directly through their own app stores and via their directly controlled ad spaces. With considerable benefits, OEMs offer a safe alternative to the Apple app store and Google Play Store and programmatic media buying.

What are the essential advantages OEMs offer?

There are four key advantages to advertising through OEMs. Firstly, these companies enable mobile marketers to scale their business by reaching untapped audiences and new marketers – making it easier and faster to achieve your growth goals. Secondly, OEMs offer high user-acquisition at a lower CPI. This helps you reach your acquisition targets and improve ROAS. Thirdly, advertisers can build trust with an audience by association with OEMs to which users are already brand-loyal. Finally – and most importantly when making the distinction between OEMs and programmatic media buying – OEMs offer a fraud-proof ecosystem. This is because there are no additional layers between the budget holder and the OEM which could manipulate the ad unit. Reach advertising is fully controlled by the OEM. OEMs understand that advertising spend is only maximized if also post impression, click and install metrics are taken into consideration when it comes to the design of the ad unit itself.

Programmatic media buying has helped advertisers leverage automation to their advantage, but there are still significant shortcomings to this process. Working with OEMs offers an alternative that is fraud-free and more transparent – while simultaneously providing access to large untapped audiences at a low CPI.

How to work with OEMs: a fraud-free environment

As experts in OEM mobile inventory, AVOW is partnered with OEMs around the world. It is our mission to help clients benefit from OEMs’ fraud-free environment and target untapped audiences with a consultative approach that helps you through the entire campaign cycle. This includes getting apps listed in OEM app stores, sorting out potential attribution issues, and tracking and optimizing performance. Our partnerships with OEMs – which covers 42% of the global Android market – enables mobile marketers to significantly expand their reach and benefit from new revenue streams. Moreover, these huge audiences are only available through OEMs because they are inaccessible via social, search or SDK networks.

We also offer an optimization tool, AVOW Performance Optimizer (APO), which optimizes OEM on-device inventory in real-time. This is an in-house solution that optimizes the best inventory towards KPI goals and engagement levels. This allows you to fully optimize your performance campaigns and increase ROAS. Avow all capital or like this? clients gain a fast, diligent and automated process with inventory that is verified by the leading mobile measurement companies in the industry (MMPs).

For more insights into how Avow can help you leverage untapped audiences, read our introduction to OEMs.