• The Bid

What is Programmatic Advertising



Imagine this is 1990. You want to run an advertisement and you need space to show it. You are an advertiser and the medium that shows your ad is a publisher. You have to reach out to all those publishers, probably via emails to negotiate terms for showing your ads. As the internet users increased and so the publishers, it became increasingly difficult to reach out to all the publishers individually.


Then came the ad servers and ad networks which brought both the publishers and advertisers at one place which made these negotiations fairly easy. Then came programmatic advertising that change the way online advertising is done. So much so that, according to emarketer, close to 60% of all digital ads in US is now programmatic and it will account for 86% of all digital ad spend by 2021.



What is Programmatic Advertising?

Programmatic advertising is automation of buying and selling digital ad spaces or ad inventory. It connects buyers and sellers to complete the purchase of ad placements on trading platforms through a process called Real Time Bidding (RTB).


Why is it Programmatic advertising is so efficient?

Programmatic buying makes this complex ecosystem a successful one with powerful algorithms that lets you decide where to run your ads, when to show them and also decide on how much to pay. So as a company using programmatic advertising, you have literally millions of ad slots (websites, apps and even OTTs) to show your ads instantaneously.


Power of data

Data is one of the most powerful entities in today’s digital world and programmatic uses this to ensure efficient results of ad campaigns. If I am selling running shoes, of the billions of internet users, I can show my ads only to those who are actively looking for running shoes. So the next time you are wondering why those shoes are following you on every site you visit, the answer is more than “re-targeting”. The evolving ad technologies powered by tools like programmatic make this possible. With programmatic advertising, companies can show ads to only those who matter. This makes it cost effective as you spend on advertising to only people who might actually be interested.


Is Programmatic and Display advertising same?

While display advertising has been there for a while, programmatic is a relatively new method of paid media. All those banner ads you see online are display ads which are served through ad networks. Google Display Network (GDN) is one such example. On the other hand, programmatic as mentioned earlier, is the automated way of buying ad placements through ad exchanges. Advertisers buy the ad spaces from publishers through Real Time Bidding. Programmatic advertising hence is a more complex ecosystem compared to Display. Since Programmatic buying is not limited to a specific network like Google’s, the inventory is huge and the reach is very high. The automated ad buying process also makes it super-efficient and cost effective.


Programmatic Advertising Best Practices:


Figure out your audiences

One of the great benefits of programmatic advertising is paying to show ads only to a set of target audience or people who have shown interest. Programmatic adverting allows you to make your ads more relevant to the people you are hoping to reach.


Set a goal

Set a marketing goal for yourself. Figure out if you want sales, leads, or website visits. Setting a goal is important as it lets you channel your expenses properly and also gives you a clear picture of the outcome. Remember, the results are only as good as your strategy. If getting more visitors is your goal, then sales and leads might have to take a backseat.


Mobile First Approach

It is likely that you are reading this article on your mobile unless you are working and browsing websites. We do not need a market research report to say that majority of the data is consumed on mobiles today. Keep this in mind while designing your creatives so as they fit mobile devices.


Video is king...but don't ignore others

According to a report, video outnumbers all the other channels of ads in terms of engagement rates. Video ads are known to have 20 - 30% more conversion rates. Video ads are definitely clear winners but dynamic and rich media ads are also great alternatives for relatively costlier video ads.


Leverage data to create lookalike audience

As mentioned earlier, another big advantage of programmatic advertising is how it leverages data to find the right audiences for you. Pixels on your websites and cookies will let DSPs find the most apt audiences for your ads. They look at the behaviors of your current customers and map lookalike audiences who could be your future customers.


Conclusion

Programmatic advertising is the most effective, sophisticated and efficient form of digital advertising. It is not an overstatement to say that it is the future of advertisement. If you haven't implemented it in your advertising strategy yet, it's time you consider it.


While this is a lot of information to process, we will discuss more about programmatic advertising in our future articles.


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