Programmatic Advertising Guide: Everything You Need To Know
Programmatic advertising is one of the fastest-growing marketing disciplines worldwide, and it’s showing no signs of slowing down. Reports from Statistica estimate that programmatic advertising accounted for nearly 90% of digital display ad spending last year. From social media to YouTube, connected television (CTV), and more, this approach to ad buying is dominating the internet. But, many marketers are still confused about how programmatic advertising works.
In this guide, we’ll explore what programmatic advertising is, its key benefits and how you can use it to level up your marketing efforts.
What is programmatic advertising?
Programmatic advertising uses algorithmic technology to automate the process of buying and selling online ads in real-time bidding auctions.
What’s the difference between programmatic advertising and traditional advertising?
In traditional advertising, marketers will vet multiple media outlets, publishers, and distribution channels before deciding which media buys make sense for their goals and fit their budget. These ads then run for a set amount of time and ad placement is bought by the thousands.
This differs from programmatic advertising. Instead of managing relationships with multiple media sources like traditional advertising, you bid on audiences in real-time auctions. A programmatic ad platform will then target this ad to one person in one place for a single price.
Benefits of Programmatic Advertising
If you want to stand out from your competitors, you can’t have a “one size fits all” advertising approach. You must personalize content to each consumer’s needs and interests.
In research conducted by Adlucent, 71% of respondents said they prefer ads tailored to their interests and shopping habits. Programmatic advertising allows you to set extremely granular parameters when targeting viewers which help ensure that your message is relevant to consumers.
Going with your gut instincts might work for deciding what you want to eat for dinner, but it’s not a great approach when making marketing decisions. That’s why it’s important to collect data from your advertising campaigns, so you know what’s working and what’s not.
Nearly two-thirds of marketers say data-based decisions lead to better results than gut instincts. Programmatic advertising provides an abundance of performance data. Marketers can then use this information to better understand what’s resonating with viewers and make changes to improve results.
While traditional media outlets have a fixed price, programmatic ad prices are dynamic. The less valuable the impression, the less money you spend and vice versa. As you collect more data about your campaign performance, you can optimize ads towards targeting parameters that work towards campaign goals and waste fewer impressions on audiences that aren’t interested in your product or service.
Types of Programmatic Advertising
Just like all things in marketing, there’s no one size fits all approach to programmatic ads. Taking the time to understand the different types of ads will make it easier to decide which format will work best for your brand.
Video advertising is a powerful marketing tool that has a lasting impact on your target audience. According to Forbes, consumers who watch a video remember 95% of a brand’s message compared to only 10% when reading text. This high-impact format is a great way to encourage consumers who are familiar with your brand to move farther down the sales and marketing funnels. Common goals include brand awareness, driving website traffic, and driving specific conversion actions.
Display ads are one of the most common types of ads you’ll see online. They come in a variety of sizes and formats that service audiences across most devices. While display ads can be used throughout the sales funnel, they’re most helpful in generating brand awareness and driving website traffic.
Just about everybody uses music streaming services or listens to podcasts. The ads featured in this medium are called audio ads, and they’re a great way to generate brand awareness. As the number of podcast listeners continues to grow, so will the number of brands that pursue audio advertising. In fact, marketers predict that total podcast ad spend will surpass $2 billion by 2023.
Native advertising content matches the look and feel of an online publication. Marketers typically use native ads to educate prospects by driving traffic to informative videos or articles. This style of advertising also lends itself to a better viewer experience since consumers consider it the least intrusive type of advertisement.
Programmatic Connected TV
CTV is an exciting and burgeoning space that has a lot of strong use cases. It’s unique because it serves video advertising in TV environments, but marketing teams can now utilize the data and targeting of a programmatic campaign to serve ads in a terrestrial TV environment.
CTV helps brands reach users on smart TVs and “over-the-top” boxes like Roku and PlayStation. However, some companies may be hesitant about putting money towards CTV because traditional TV dollars can be stubborn. With that said, today’s viewers are watching less traditional TV than they used to. Over 80% of U.S households with a television have one or more internet-connected TV devices.
As more consumers view entertainment on non-traditional platforms, CTV will become more and more popular because it provides brands the opportunity to generate brand awareness using inventive, interactive, and localized tactics.
Digital out of home
Out-of-Home advertising (OOH) has been around for over a hundred years. This form of marketing includes any visual media consumers view outside of their homes. Some of the most common forms include billboards, park bench signs, and public transit signs. Digital Out of Home (DOOH) placements function similarly but with a modern twist. Instead of relying on static images to catch consumer attention, DOOH placements use digital screens on outdoor televisions and digital billboards. Similar to CTV, this is a medium where we can leverage data to more intelligently target consumers.
Getting Started with Programmatic Advertising
Programmatic advertising can help your brand market online more effectively. However, sometimes it’s hard to know where to start and what strategies to use. Understanding what you want to achieve will help you develop an effective programmatic strategy. If you want to discuss programmatic advertising with our teams, connect with us today.