Customers are fast a mobile and online-first culture. To remain relevant, you need the skills and tools to reach them at that level. Through programmatic advertising, you can now develop and serve precisely targeted ads.
Here is a comprehensive guide on this relatively new form of advertising. You will also learn how a programmatic agency can help you be productive in this new format.
Programmatic advertising is the purchasing of digital advertising space automatically. Using computers, you rely on data (that is often real-time) to determine what advertisements to buy and at what price.
With programmatic advertising, platform owners sell their space through publishing websites. On the advertising side of the equation, customers buy space and place ads through the same platforms.
So how did programmatic advertising arise? When digital advertising first rolled out, buying media used to be a manual process. Publishers would offer their inventory to advertising agencies. These agencies would then sell that inventory to advertisers.
Along the way, advertisers, and publishers realized they could collaborate directly to buy and sell media. On top of that, the demand for a platform that enabled more direct buying shot through the roof. While all this was unfolding, publishers kept increasing the number of pages on their websites.
These factors came together to create the perfect storm. There was now more digital ad inventory than advertisers, and agencies could keep pace with it. As a natural consequence, programmatic advertising arose to eliminate this lag.
If it could be possible to automate the buying and selling of media, everyone could earn more. Publishers could sell all their inventory. Advertisers, in turn, could receive more exposure.
Since advertisers and publishers interact more directly under this model, the fear is that agencies might become obsolete. That, however, is not the case.
For programmatic advertising to work, everyone must rely on expensive technology. Many advertisers can’t afford to access a programmatic network on their own, and agencies step in to fill that gap.
These agencies work with many advertisers who then make up the minimum threshold for network access. Consequently, brands learn effective advertising skills such as hybrid digital marketing while paying less for the service.
Programmatic advertising has several moving parts. Advertisers, publishers, and agencies are the parties that run this space.
An advertiser is the brand that desires to promote its idea, service, or product. A publisher is the website or application that owns the ad inventory, while agencies are the go-betweens of publishers and advertisers.
In some cases, digital networks can buy the inventory on the publisher apps or sites. That then gives them the first right of ownership over the catalog.
However, since there is a lot of content online, these networks can’t sell all their inventory. Due to this, the networks allow programmatic vendors to sell their extra stock.
Three more intermediaries exist to make programmatic advertising successful. These are demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges.
Demand-side platforms (DSPs) act on behalf of the advertiser. These platforms collaborate with Data Management Platforms (DMPs) to assess the audience for each placement. DSPs will also allocate a bid for the placement once they identify the best audience for it.
Supply-side platforms (SSPs), also known as sell-side platforms, act on behalf of the publisher. SSPs get to select the winning bid for placement and publish the advertisement to the app or site.
There are many factors an SSP considers when picking a winning bid than the highest bid. For example, an SSP will also assess the relevance of the ad to the audience when selecting a winning bid.
The ability of an SSP to evaluate several factors during bid selection is one aspect that makes programmatic advertising appealing.
Ad exchanges are where the bidding happens. You can compare an ad exchange to the stock market. Here, advertisers and ad networks (brokers) place competing bids in an open market using DSPs for inventory. SSPs then purchase these bids and publish the ads.
In some cases, programmatic sellers operate using private exchanges. The main difference private exchanges have is that they restrict advertisers according to budget and audience relevance guidelines.
Occasionally, publishers can sidestep the auction process (known as a programmatic direct). In such cases, a publisher will opt to sell their media inventory at a fixed cost.
There are some functions that programmatic advertising is uniquely placed to help you perform. Here’s a look at some of these essential roles:
Real-time bidding (RTB) is the buying and selling of online ad impressions through real-time auctions. Typically, SSPs or ad exchanges facilitate these auctions which happen in the time a website takes to load.
RTB is efficient, and as a result, advertisers don’t need to negotiate with publishers and or ad networks for ad prices or trafficking. They only pick the impressions they most value across a vast range of inventory, reducing the number of wasted impressions.
All digital advertising relies on targeting the audience according to pre-determined geographical criteria. However, choosing an audience solely based purely on their country or state is not always practical. Some situations might call for you to get more precise.
Hyperlocal, geo-targeted, or geofenced ads solve this issue by enabling you to target an audience in a smaller geographical area. That improves the precision of your ad regardless of the geographic size in question.
Out-of-home (OOH) advertising is also moving from traditional formats to digital. Programmatic advertising can help you effectively reach your audience when they are not on their phones or computers via OHH.
Whether it’s digital billboards, taxi-cab monitors or television (TV) screens in public transport vehicles, you need to speak to the relevant audience. Programmatic advertising empowers you to leverage insights from customer data for the right exposure.
Growth in over-the-top (OTT) content platforms, together with leaps in streaming technology, has led to new digital advertising opportunities for brands. While connected TV advertising opportunities are picking up, the cost is still prohibitive.
Programmatic advertising is making it easier for advertisers to tap this emerging opportunity within their budgets.
Surprisingly enough, advertisers are finding that programmatic advertising can help shore up traditional ad placements. By its nature, programmatic advertising is not limited to a particular network. Therefore, you can grow your audience over a vast market range.
However, this broad inventory may include websites or viewable locations that are not of the highest grade. The upside to this, though, is that this second-grade inventory is typically more cost-friendly.
In light of this, you can use programmatic advertising to supplement your traditional placement options. That ends up lifting your overall exposure and can be a winning strategy.
If you are looking to get into or strengthen your programmatic advertising, then working with an agency is a no brainer. Here are some benefits you stand to gain:
In digital advertising, there is always the question of whether the quality and viewability of all impressions are trustworthy. If you are working blind, you may end up not having an idea of how many impressions your campaign should generate.
An agency can help you determine exactly how many impressions a campaign should deliver before it starts running. The result is that you can reliably forecast your programmatic ad budget.
When an agency handles your programmatic advertising, you can expect better transparency and control. Traditional advertising struggles in delivering a full view of the impact of your campaign.
With programmatic advertising, you can tell the type of customer that’s looking at your ad. Besides this, you can also pinpoint all the sites that host your ad. When you need to make changes to your campaign to better optimize it, you can do so efficiently and cost-effectively.
It also does not hurt that programmatic advertising helps you keep an eye on real-time costs for your ads.
Can you imagine the possibilities for your campaign if you could receive its performance feedback seconds after you post a campaign? Well, that is the kind of data turnaround you’ll get when an agency runs your programmatic ads.
You can review the results of several aspects of your campaign seconds after it goes live. Is the creative working or not? Was your targeting criteria spot on? These are questions you get answers to immediately you run the campaign and, thus, can alter effectively.
When you combine immediate feedback with other advertising data gathered over a period, you can make effective strategic decisions. Such a level of insight improves your odds of delivering consistent success with each campaign.
No digital advertising initiative can survive when the targeting is inaccurate. Working with an agency ensures that the level of targeting for your digital ad is precise through using several tools.
Do you need to serve an ad to an audience at a specific local event? No problem. By zoning in on a particular internet protocol address (known as IP zoning in industry parlance), you can deliver your message. Geolocation targeting can help you present your ad to an audience of your choice in a particular geographical area.
Aside from fine-tuning your digital ad targeting, programmatic advertising also helps you retarget. Retargeting is when you reach out to the audience that did not convert from your initial ad. Precise retargeting can help you consistently grow your return on investment (ROI) per digital campaign.
At any given time online, there are 3.2 billion users. Those are 3.2 billion potential customers from which you can grow your audience, depending on your targeting parameters.
While not everyone can be your ideal buyer, the fact that you can draw potential leads from such a vast number is impressive.
Furthermore, after you narrow down your target audience, you can immediately track them for further insight. Once a target customer sees your ad, you can get their location and a host of other essential data.
A reputable agency handling your programmatic ad campaign will have the capacity to deliver customer insights that can further help optimize your ad.
Few things can water down your advertising efforts than an inefficient campaign. An agency can help you squeeze out every inch of efficiency from your programmatic campaign by several fine-tuning skills.
Due to the ability to monitor a programmatic ad’s feedback in real-time, you can keep an eye on what’s happening. The moment you spot a weakness that needs rectification, you can make the necessary tweaks immediately. That means that there is a tiny window for your ad to continue running suboptimally.
Ultimately, this ensures that your digital advertising ROI can come as close as possible to perfection.
The granular level of tracking and control that programmatic advertising enables you to ensure that your campaign will be cost-effective. Traditional advertising campaigns tend to have a spray-and-pray element. Once you put your creative together, you serve it to a broad audience.
The problem with this approach is that a portion of the eventual viewers do not from the target audience you want. You, therefore, end up paying for wasted views.
When working with an agency to serve your programmatic ads, you are sure of getting a deeper level of customer data. That data delivers meaningful insights you can use only to display your ad to the audience you desire. As a result, your ad campaign can remain on budget and achieve cost-effectiveness in its reach.
Programmatic advertising is a critical tool digital advertisers must master to remain relevant. At first glance programmatic advertising might seem complicated. However, it is a simple tool you can use to optimize your digital ad ROI.
When you collaborate with a programmatic agency, you can create effective campaigns. Combining their deep expertise with your vision ensures your business can keep growing.
Media Shark is your partner when you need tangible results from digital marketing. Get in touch with us today to increase your digital advertising ROI.
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