Table Of Contents
- What is Programmatic Advertising?
- How Does Programmatic Advertising Work?
- Programmatic Advertising vs. Display Advertising
- Types of Programmatic Advertising Platforms
- What are the Major Benefits of Programmatic Advertising?
- Challenges Faced in Programmatic Advertising in Digital Marketing
- Programmatic Advertising: The Way Forward
What is Programmatic Advertising in Digital Marketing?
Last Updated on: November 14th, 2024
To make your advertising more effective, you must learn and understand what is programmatic advertising. It helps you to place your ads in the right place and target them at the right people. Hence, by using programmatic advertising, your campaign can reach its highest potential.
In this article, you will learn about programmatic advertising in general and how it works. Apart from that, this article will also show you the difference between programmatic advertising ads and display ads. Moreover, you will explore different types of programmatic advertising and their benefits. Hence, to learn more, read on to the end of the article.
What is Programmatic Advertising?
In programmatic advertising, you must use automation technology and algorithmic tools to buy media. Basically, it lets you combine advertising precision with automation. As a result, your ads reach exactly the audience you want to reach. Currently, this new advertising technique is taking the digital marketing world by storm.
Nowadays, with the rise of AI in digital marketing, many companies are adopting AI in all areas of their marketing processes. If you plan for the same, you must work with the right autonomous technology. This will help you improve your return on investment (ROI) for Targeted Marketing and ad campaigns.
With programmatic advertising, you use software to buy digital advertising. Generally, in the traditional method, you must deal with requests for proposals, quotes, tenders, negotiation, etc. However, programmatic advertising lets you use algorithmic software with the help of which you can buy/sell online space for your ads.
Additionally, programmatic advertising has a sophistication to it. Here, you are using traffic data and online display targeting if you want to drive impressions at scale. As a result, you will have better ROI in marketing.
Whether you are a small business or a big brand, programmatic advertising can help you either.
How Does Programmatic Advertising Work?
Generally, programmatic advertising automates how you buy ads or ad space. However, it does not completely automate the process. Here, as a marketer, you have more time to optimize and improve your ads. Thereby, you can drive your ad campaigns better.
In fact, programmatic ads analyze different types of user signals. This way, it ensures that those ads serve the right people at the right time and in the right place.
When you want to place your ad, you must check and decide which space is right for you. Hence, you must get an idea of different aspects of your ad. However, with the programmatic approach, you automate the decision-making process of ad placement.
Also, you don’t need to negotiate prices or placements like other platforms manually. Hence, you do not throw away your ads in the digital void, hoping your audience will notice. Rather, you are positioning your ads in such a way that they make a strong impact on your target audience.
Basically, programmatic is an umbrella term under which different programmatic buying categories are present.
Programmatic Advertising vs. Display Advertising
It is common among marketers to confuse programmatic ads with display ads. This is because of Google’s high-profile automation features and real-time bidding capabilities. The following are the two major differences between programmatic ads and display ads:
- Programmatic: It relates to how you buy ads for your marketing and promotions.
- Display: It shows the format in which advertisements appear on a platform.
Generally, display ads consist of colorful banners, videos, or interactive media. These are presented on websites and apps to catch the attention of consumers.
On the other hand, you use programmatic advertising from the back end. Apart from that, it works as per automation technology. This technology decides the ads that consumers see. In this case, it considers factors such as:
- Behaviors
- Interests
- Demographics
- Active presence,
- and more
Display ads and programmatic ads are also different when it comes to buying ads across platforms. In fact, you refer to display ads when you place ads within one specific ad network (for example, the Google Display Network). However, programmatic ads are an advanced form of display media.
Basically, programmatic ads work on various platforms (see the next section). These platforms allow advertisers to buy ad inventory across an open network of platforms. Moreover, both display and programmatic ads give you control over the following aspects:
- Audience
- Budget
- Bidding Strategy
- Ad placements
- Creative assets.
Types of Programmatic Advertising Platforms
In the last few years, automation technology has developed significantly. Earlier, you could get basic automation and targeting capabilities through programmatic platforms. In this case, all you need to do is use simple data points. However, this started developing more with major changes in the digital landscape.
Nowadays, advanced algorithms, artificial intelligence, and machine learning power major programmatic platforms. The following are the three major programmatic platforms that you will find today:
1. Sell-Side Platform
These are also called supply-side platforms. These platforms allow ad publishers to sell their impressions to advertisers in real-time. Basically, this platform consists of both DSPs and ad exchanges.
Apart from that, these platforms have technology that allows publishers to set minimum inventory prices. Also, customers can choose which ads appear on your side. Moreover, customers also can block advertisements from certain advertisers.
The following are some examples of supply-side platforms: Google Ad Manager, Amazon Publisher Services, SpotX, Xandr (Microsoft), etc.
2. Demand-Side Platform
With this platform, advertisers can purchase ad inventory across multiple platforms simultaneously. No matter what type of advertisements you work with, you can find the platform easy to navigate.
Apart from that, demand-side platforms also allow you to manage your ad inventory bidding. Moreover, you can target specific audiences with the help of sophisticated data sources.
The following are some examples of demand-side platforms: Display & Video 360 (Google), Amazon Advertising, Xandr, The Trade Desk, Adobe Advertising Cloud, etc.
3. Ad Exchanges
With the help of this platform, you can flow ad inventory from sell-side platforms to demand-side platforms. Here, the demand-side platform connects to an ad exchanger. In this case, you will notice a fluctuation in ad prices. However, it depends on the inventory’s competitiveness.
You can consider the advertisement exchange as a neutral ground between the sell-side and demand-side platforms. Hence, this makes it a good platform for transactions.
The following are some examples of ad exchanges: Xandr (Microsoft), OpenX, Yahoo, Google Ad Exchange, Amazon, InMobi, etc.
What are the Major Benefits of Programmatic Advertising?
To understand what programmatic advertising is, you must learn its benefits. The following are the major advantages that you will benefit from if you incorporate programmatic advertising in your ad processes:
1. Better Audience Reach
With programmatic advertising, you will be better able to grow and scale your advertisements. Hence, if you want to reach masses, programmatic advertising offers you an abundance of cross-platform inventory.
Moreover, it is also simpler for advertisers to adjust their audience strategies. This way, you can capitalize on what is working for you and what is not working. This will ensure that you always optimize your ads.
2. Cost-Effective Advertising
You already know that programmatic advertising can allow you to scale your reach. However, it is also one of the most cost-effective methods of advertising. In fact, even with a small budget, you can reach your target audience better. Also, you can increase awareness of your products and services.
Apart from that, you can also set up retargeting campaigns. This will allow you to guide your users through their purchase journey. Thereby, you can increase incremental purchases and leads.
3. Real-Time Data and Analysis
Real-time Bidding is one of the major aspects of programmatic platforms. Hence, you can reap its benefits with the help of real-time data. Hence, you can have a better idea of data as an advertiser.
As a result, you can make faster decisions and pivots. Moreover, you become more proactive with your approach rather than being reactive. Furthermore, you can adjust your bids and strategies based on immediate performance.
4. Utilizing First-Party Data
The data segments that you receive on programmatic advertising are first-party data. This way, you can target people using real-time bidding signals. As a result, it helps you to open new avenues for finding customers. Moreover, you can also ensure that these customers are attracted to your products and services.
Challenges Faced in Programmatic Advertising in Digital Marketing
The following are the challenges faced in programmatic advertising:
- With development in AI, ads will get smarter. Hence, it would lead to more ad frauds. For instance, people will use automation to simulate ad clicks and register fake impressions.
- Programmatic advertising uses large amounts of data from various sources. Hence, it leads to many data privacy concerns.
- Your ads might appear alongside inappropriate content. This can get controversial for your business, and you might end up in trouble.
- The options available in programmatic advertising is overwhelming. Hence, it can create a headache for advertisers.
Programmatic Advertising: The Way Forward
Hence, you now know what is programmatic advertising. With the help of this technique, you will have a better idea of your marketplace. Apart from that, you will also have access to new ideas for engaging your target market. Moreover, you can deliver effective ads to your target customers with this automation process.
Do you think programmatic advertising will help your organization in the current market? Please share your ideas and opinions in the comments section below.
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