Programmatic advertising is the talk of the town at the moment. Personnel utilizing online advertising cannot stop raving about it and rightly so as this advancement has completely changed the landscape. In case you or your business are involved in the online ads scenario but are not completely up to date about the ongoing events in the world of programmatic advertising you’ve landed at the right place. We are here to discuss the what, where, why, how and who of programmatic advertising. So hop on and enjoy the ride.
What is programmatic advertising after all?
Irrespective of the creativity or the brilliancy element in the ad, the appropriate placement of the said advertisement is the only way it is going to be seen by the intended audience. Hence purchasing the best ad space at the perfect price and targeting the right audience is the crux of the matter really. This is where the new media buying tool jumps to fruition: programmatic advertising.
In layman terms, programmatic advertising is defined as the automated selling and buying of online advertising but if we dig deeper it’s much more than that. The arena or market for digital ad spaces is run by ad exchanges that operate customized auctions which bring together the two parties involved in the transaction. First, the advertisers who wish to purchase the ad space on the internet and second, the publishers who own the website that possess the digital space to sell.
The adoption of programmatic processes acts as a game-changer and takes the experiences up a notch. The utilization of algorithmic software which handles the sale and placement of digital ad impressions through ad exchange platforms faster than you can blink i.e. in a fraction of a second. It also integrates all the traffic data and online targeting practices to bring back impressions with accuracy, efficiency and scale. The outcome of the implementation translates to a better return on investment for both advertisers and publishers alike.
Why should you heed attention to this process?
To be extremely blunt and straightforward, programmatic ads are simply more efficient. It provides a faster as well as smarter alternative to manual digital advertising. Prior to the utilization of this technique ordering, setting up and reporting on ads had to be carried out manually. The negotiations, when done manually, put both advertisers and publishers in a serious struggle for the appropriate management of the ad space and the negotiations often become extensively time-consuming.
Approximately 62% of marketers were using the programmatic ads to adhere to core brand objectives to boost the budget by an average of 37% within a two year period. We can see the growth of the practice through the following image. A solid testament to this medium’s exponential growth can be gauged by the fact that a substantial 85% of the digital display advertising was negotiated through programmatic technology in 2020. As per eMarketer, the expenditure is expected to grow to 86.5% of all digital display ads spend in 2021 notwithstanding a downtime due to the pandemic.
The future holds high hopes for programmatic advertising as John Lincoln, CEO and founder of SEO company Ignite Visibility explained on Inc:
“Programmatic advertising is designed to do away with old-fashioned, hit-or-miss campaign design. That system was notorious for costing marketers way too much money. The system will not only launch your campaign, but it will also monitor your ad spend to look for areas of improvement.”
Due to this element, you can depend upon an algorithm that will decide where your ad money is best spent. All you’ve got to do is feed your programmatic solution the details about your campaign as well as KPIs and you’re good to go.
Regarding ad spends optimization, return on investment, and the potential to connect with your target audience, it’s crystal clear that programmatic advertising possesses the humongous potential for modern brands striving to thrive in the digital age.
How then does this whole programmatic ads scene work?
Now that you are learning about the in and outs of programmatic advertising let us dive deeper into the mechanism and principle behind this process.
An individual clicks on a website, then the website owner presents the ad impression up for an auction through a supply-side platform. Various advertisers put forward their bids for the impression through the demand-side platform and the highest bidder wins the impression. The ad is displayed on the website to the user to potentially work its magic and lead the user to click and convert.
You may think with so many steps going on behind the scenes it may be time taking, to the contrary the entire operation takes place within a second. Another cherry on top is that the competing bids are scrutinized by algorithms and a wide array of analytics to instinctively decide the most cost-effective bid.
What are programmatic platforms you ask?
You are now aware of the gist of the mechanism that encompasses programmatic advertising so we should get into the technical nitty-gritty. When learning about programmatic advertising it is essential for you to understand the platforms that enable the advertisers and publishers to implement the advanced techniques.
The entire ecosystem consists of different platforms for the advertising process. Every part works coherently to serve both advertisers and publishers. We have mentioned terms like demand-side platform, supply-side platforms, ad networks and ad exchanges and here we bring more clarity to the terminology for your expertise.
#1 Supply-side platform
It signifies the publisher’s inventory wherein they submit a webpage as a source for an ad. A supply-side platform or SSP enables publishers to filter ads by the advertiser and a number of other criteria along with setting different rates for ad spaces to establish the cost.
#2 Demand-side platform
The DSP is a kind of programmatic platform meant for the advertisers wherein they can make their bids and let the platform. It maintains user-profiles and third party data and amalgamates data with bids from the advertisers. The demand-side platform comes to the conclusion about the ad to serve where and when the visitors and on webpages. Google ads can be considered as a type of DSP.
#3 Data management platform
It stands for an independent platform that gathers, organises, analyses, and activates data. Possessing the appropriate data is extremely crucial in programmatic marketing. A DMP offers a pretty comprehensive user profile to advertisers to empower impressionable matches through the programmatic algorithm.
Is it really advantageous?
Programmatic advertising offers a plethora of benefits that were utterly unimaginable just a few years ago. The advancement is swift and the road just gets smoother and easier with newer ad tech coming into the picture. Here are the advantages you will experience for sure.
You can gain the benefit of greater reach as programmatic ads enrich the arena with multiple ad exchanges and networks. To maximize the reach to your heart’s content with more ad space on thousands of websites at a cost-effective rate.
Along with added reach, you can observe enhanced relevancy while buying or selling ads through programmatic advertising. You will surely observe an improved return on ad spend (ROAS).
Choosing the algorithmic option provides real-time access to data about the ad placements and activities to both advertisers and publishers. Once the industry figures out a way to make programmatic costs transparent there is a clear transaction that can be observed by all parties.
- Data insights & reporting in real-time
Gain access to real-time data and reporting regarding ad placement and performance through programmatic advertising to perfectly optimize your campaigns without time-consuming hassle.
- Targeting beyond CTR
If there are clicks but no conversions the CTR doesn’t really matter, does it? Acquire advanced targeting through programmatic advertising like interest targeting and lookalike to aid advertisers to procure a high-quality audience at scale.
We see a future filled with sunshine and rainbows for programmatic advertising and the current scene provides the perfect gateway to hop on the rising trend. Accessibility is at its peak, especially for smaller brands, and hopefully, this article has given you a better view of what it’s all about.