What is Programmatic Advertising
Aug 22 2022
Programmatic ad buying is the use of software to buy digital advertising. It takes advantage of massive amounts of data about user behavior to enable advertisers to use the most likely method to result in purchase intent. Besides cost-efficiency, programmatic ad buying enables media agencies to target specific groups of people based on user behavior and preferences. Below we look at programmatic advertising and everything about it.
Programmatic advertising, also known as digital & automated buying, is a method of ad buying that uses software to purchase and plan an ad campaign for brands. Programmatic ads allow you to buy online display ads such as banners and video ads using real-time bidding (RTB).
The process is automated, so the advertiser sets up targeting parameters such as age, gender, and location to influence which ads are displayed to which users. Data is used to make real-time decisions about ad creative, placement, targeting, etc. Buyers and sellers of media inventory use DSPs (Demand Side Platforms): They allow advertisers and publishers to buy and sell digital ad space in real-time.
How Does Programmatic Ad Buying Work?
Programmatic ad buying takes advantage of data to determine the optimal advertising campaign and the most effective way to purchase, target, and deliver media. It also allows marketers to take advantage of real-time bidding (RTB) exchanges which aggregate publishers’ inventory in one place.
This helps advertisers access a much more comprehensive range of ad inventory than they would be able to buy directly from publishers. They can also dynamically alter their campaigns based on performance and ROI.
Why Does Programmatic Ad Buying Matter?
It is very efficient. This method of buying digital ads can be the most efficient way to reach a specific target audience. For example, advertisers frequently use programmatic ad buying to deliver digital ads that are likely to connect with people who have recently searched for and viewed products on their website.
Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople who can be expensive and unreliable. This method of buying digital ads enables advertisers to target potential clients based on their previous website visits and search behavior.
Uses of Programmatic Ad Buying
Programmatic ad buying can be used in many different ways. Below we look at how it can be used differently by different people.
Dynamic Retargeting of Visitors
Advertisers can use programmatic ad buying to display ads to visitors on their website. For example, if someone visits a retail site and then leaves without buying anything, the retailer could potentially display an ad with an offer for their abandoned basket. Advertisers also use this to re-engage users who have previously expressed interest in their brand.
E-commerce companies commonly use this method of buying digital ads to show ads for products that visitors viewed or put in their carts but did not buy.
Programmatic ad buying usually takes place over real-time bid (RTB) exchanges which enable buyers to connect with sellers without the need for human intermediaries. RTB exchanges include several publishers’ inventory in one place and allow advertisers to bid on ad space in real-time.
Publishers also use this form of advertising by publishers who use programmatic ad buying to sell their online inventory, thus avoiding the need for human intermediaries.
Programmatic ad buying can place ads on video content across different websites, apps, and platforms. Video ads are usually placed around the pre-roll, mid-roll, or post-roll on the video content on websites, apps, and platforms. Video ads are more expensive than static display ads on publisher sites but reach a wider audience.
Programmatic ad buying makes it possible to target specific audiences for brand videos produced by advertisers or publishers. For example, an auto manufacturer may want to promote their luxury cars through programmatic ad buying to reach users who have visited websites related to luxury cars.
Creating Brand Awareness
Programmatic ad buying can be used to engage users with an ad that is related to the content they are viewing. For example, if someone searches for shoes online while using Facebook, an ad displaying the latest collection of a certain shoe brand could automatically pop up. This method of buying digital ads can help create awareness for new brands and push them to the top of users’ search results.
It can also encourage current customers to make another purchase or share a brand with their friends and family. For example, an ad could offer a discount code for 15% off on products purchased through your site, thus encouraging existing customers to reengage with the brand.
Promoting A Product Launch
Programmatic ad buying can be used to promote a product launch. A new product may be advertised widely before the official launch, with ads informing people of the upcoming release, encouraging them to visit your site for more information, or watching an exclusive video. This way, you can collect data on who wants to know more about your new product and use this data for future marketing.
Programmatic ad buying can also encourage pre-registration of users who are interested in the product before it is officially released. This method of buying digital ads enables you to gather email addresses and contact details from people on your customer list, which can then advertise future products or share special offers with them.
Programmatic ad buying can be used to target ads at users who have visited your website or taken specific actions on it in the past, for example, made a purchase but did not finish their transaction. This is called retargeting and is commonly used to re-engage visitors who may want to complete the process of purchasing a product or service.
This kind of marketing can be used during the holidays when customers are likely to spend more time online. For example, you could target holiday shoppers with ads offering discounts on products they may want to buy for their loved ones to encourage them to complete the purchase.
It is possible to customize ads to suit different target audiences with programmatic ad buying. For example, on a news website, people reading an article about the latest Apple product may be more likely to want to know more about it than those reading an article on gardening.
Benefits of Programmatic Ad Buying
Programmatic ad buying has several benefits. Below are some of the main benefits.
Ads are delivered to the right people at the right time. Over 90% of marketers believe that real people saw their ads. This helps ensure ROI because ads are only served to people interested in them.
Programmatic ad buying helps improve the relevancy of digital ads. Advertisers often use it to serve ads to people who have recently expressed interest in their brand or products, making the ads more relevant and less annoying.
Programmatic ad buying is usually automated using software like RTB (Real-time bidding). This enables advertisers to respond instantly and intelligently to changing market trends and understanding marketing conditions.
It also enables advertisers to use the method that is most likely to be successful. The software uses data about user behavior to predict which ads will be most effective for each person who visits a website.
This type of ad buying also enables advertisers to quickly find new customers with little effort by using algorithms to make highly accurate predictions about the best way to market products. Programmatic ad buying is a powerful tool, global spending in 2020 topped $129 billion and around $155 billion in 2021.
Its speed enables advertisers to find new customers with little effort quickly. The software uses data about user behavior to predict which ads will be most effective for each person who visits a website. This makes it possible for brands to tailor their message based on their interests, location, age group, etc.
Programmatic ad buying is highly flexible because it enables advertisers to change their message at any time and target the right people. This makes it possible for brands to tailor their message based on their interests, location, age group, etc. This means that advertisers can test multiple ads and messages before choosing the one that works best.
Flexibility for programmatic ad buying enables advertisers to change their message at any time and target the right people. This makes it possible for brands to tailor their message based on their interests, location, age group, etc. This means that advertisers can test multiple ads and messages before choosing the one that works best.
Instead of targeting broad demographics like country and age group, programmatic ad buying enables advertisers to target small groups of clients based on precise criteria that are likely to be appealing. This ensures that ads are only displayed to people interested in them.
Using programmatic ad buying enables advertisers to target small groups of clients based on precise criteria that are likely to be appealing. This ensures that ads are only displayed to people interested in them.
They are Data-Driven
Programmatic ads are data-driven which means advertisers receive the most relevant ad for their audience. Machine learning helps optimize the process and ensures that brands only pay for high-quality impressions while getting complete transparency about where their ads appear on websites.
This method of advertising helps to eliminate waste, fraud, and abuse in digital media buying by serving ads to real people. Their data-driven nature makes them the most efficient way to advertise on digital media channels. Brands only pay for high-quality impressions while getting complete transparency about where their ads appear on websites.
How to Succeed When Using Programmatic Ad Buying
Programmatic ad buying enables advertisers to find new customers quickly, but companies need to ensure that their programmatic campaigns are set up correctly. Successful campaigns involve a combination of several different components:
Picking an Effective Budget
Since programmatic ads are automated, they can be delivered at a much lower cost than traditional ad formats. However, this lower cost comes at the expense of ads not being seen by as many people. This makes it crucial for brands to make sure they are picking an adequate budget.
Programmatic ad buying delivers ads at a much lower cost than traditional ad formats, but this low cost comes at the expense of ads not being seen by as many people. This makes it crucial for brands to make sure they are picking an adequate budget.
The simplest way for advertisers to solve this problem is by choosing a cost per mille (CPM) model. This allows them to pick their ideal CPM limit while ensuring that as many people see their ads as possible.
Picking Effective Ad Formats
Several different formats can be used for programmatic ad buying. The most common format is the banner ad, but advertisers also can use video ads and product ads that allow them to showcase specific products on e-commerce websites.
Picking an effective ad format requires considering what type of message will work best for a given brand. This can be accomplished by conducting comprehensive market research and analyzing past performance data.
Pairing Ads with the Correct Bidders
To maximize success, advertisers should consider pairing ads with suitable bidders. This involves looking at a bidder’s performance history and finding the one that will deliver ads that match a brand’s unique requirements. Pairing ads with suitable bidders requires looking at a bidder’s performance history to find the one that will deliver ads that match a brand’s unique requirements.
Choosing the suitable bidders for a programmatic campaign can help advertisers solve problems like ad blocking, viewability, and making sure their ads reach the correct users.
Ensure Transparency in the Process
Advertisers have complete control over programmatic ads, but it’s crucial to understand how this process works. Transparency is vital when it comes to trusting that an ad delivery platform is delivering quality ads at a cost-effective price point.
Failure to stay informed about the process will likely lead brands to implement their ad verification systems—which presents several challenges. Having transparency in the process helps advertisers to trust that an ad delivery platform is delivering quality ads at a cost-effective price point.
In short, programmatic ad buying is designed to do away with old-fashioned, hit-or-miss campaign design. The programmatic model gives marketers the power to choose what they want their ads to look like and put them in front of a relevant audience while still controlling their budget so that their ads reach the right audience.
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