By 2021, experts estimate that the U.S. total spends on programmatic advertising will reach 88% of all digital display ad spend. That amounts to around $81 billion. Keep reading to learn more about what are programmatic ads and how Go Florida SEO can help you take your business to the next level!
What are programmatic ads, and why is it the prime choice of advertisers? If you’re not yet familiar with this type of advertising option, you’re in the right place.
Keep on reading to learn more about programmatic advertising, how to run them, and why you need to get into the bandwagon.
What are Programmatic Ads?
Programmatic advertising is the use of software to buy and sell online ads. It’s an automated process that places bids on your behalf through a sophisticated system.
Also called programmatic marketing, programmatic advertising uses different platforms. It relies less on humans and more on machines. This eliminates much of the time-consuming processes of the traditional advertising model.
An offline advertising model won’t work. It often involves extensive paperwork, negotiations, request for proposals, and many more. These can get expensive, too. It also changes the way you buy digital ads by removing humans wherever possible.
Note that we said wherever possible because you can’ remove humans from the equation in full. They’re still the ones to create strategies and optimize the advertising campaigns. Their workload will lessen, though, as they can have the robots do some more menial tasks.
Examples of automated processes are optimizing the ad tags and sending insertion orders. This allows businesses to spend more of their time on more critical tasks.
Because of automation, the whole process takes less than a second to complete.
Types of Programmatic Advertising
Now that you know what programmatic ads are, let’s learn more about it.
Programmatic advertising has different rules depending on the type. The deals determine ad delivery. Check out below the different types of programmatic media buying.
1. Real-Time Bidding
Real-time bidding is the most common type of programmatic advertising. People tend to confuse them with each other for this reason.
In reality, RTB is only one form of programmatic advertising. Although, it accounts for 90% of all programmatic buying.
The way it works is that it starts the bidding the moment a visitor lands on a site. The publisher then puts up the ad space for sale on its supply-side platform (SSP).
The SSP then collects information about the user. This includes their geography, interests, behavior, and so on. It then supplies this information to advertisers.
Advertisers use a demand-side platform (DSP) to act for them. It reviews the information and bids on ad space that aligns with the advertiser’s targeting parameters and budget.
The SSP picks the winner of the bidding and then displays the ad of the winner. This seems like a long process, but as we’ve said above, this all happens in less than a full second. While the page is loading for the user, the platform is buying and selling ads.
The winner doesn’t always have to pay for their bid amount for the slot, though. It uses a type of auction called second-price auctions. That means that it only charges the advertiser $0.01 more than the second-highest bidder.
If the second-highest bidder bid $1 and you bid $2, you’ll only have to pay $1.01.
2. Private Marketplace
A private marketplace works almost the same way as RTB. However, only select advertisers only get to bid.
It’s a closed auction. Meaning, the publishers reserve a premium ad inventory for invited advertisers. It does away with ad-exchanges as the DSP plugs into the SSP directly.
Bidding still occurs, but the terms are already pre-negotiated. This gives both buyer and seller more control over their automated ad bidding.
It also benefits both sides. The publisher will know exactly what group of advertisers will appear on their site. If you’re a website that’s particular about the ads that appear on your site, this would be important to you.
If you’re an advertiser, however, the benefit is in knowing what types of websites your ad will appear in. Remember that you’ll get associated with the site for the sole reason of appearing on it. It will be helpful for you to know the publishers.
3. Preferred Deals
In this type of programmatic media buying, advertisers get to choose the ad inventory. The publisher reserves the slot to a single advertiser, who has to pay a fixed price.
This is even more beneficial than an invitation-only auction in that you get to choose whom to deal with. You can choose the one you trust, removing some of the risks in advertising, in general.
Most web publishers prefer an unreserved fixed rate. That’s because they get a more favorable price to their ad space. If they can’t get a preferred deal, then they’ll send the ad space to auctions, where they’re likely to get a lower price.
Although the option to sell to a single advertiser is there, the spot still isn’t reserved. It only gives the advertiser the first look of the ad space. It also gives the chance for the advertiser to first decide whether they want it or not.
As always, the entire process is automatic. Still, the advertiser and publisher have to decide on a fixed price beforehand.
4. Automated Guaranteed
The automated guaranteed or programmatic guaranteed type of advertising gives the chance for a buyer to get ahold of a publisher’s ad inventory for a fixed price.
It doesn’t go through a bidding process; both sides negotiate the price and terms beforehand. This allows advertisers to choose ad inventories, audience targeting, and frequency capping.
It sounds like Preferred Deals, but the difference is that it’s reserved. The buyer and seller have to agree to a set amount of impressions for a fixed price, first. Then, the ad spot becomes reserved for the advertiser for a specified duration.
Does it still sound familiar? That’s because this is also how the traditional method of trading inventory works. It involves a direct sales team for negotiations.
This is different, though, because some of the tasks are now automated. The requests for proposals and campaign trafficking processes are a couple of examples.
How to Run Programmatic Ads
Programmatic advertising sounds promising, but how do you get into it in the first place? Follow our tips below to set up your programmatic ads.
1. Set Your Goals
As with any type of marketing, setting your goals is the first thing you should always do. This will dictate almost all the decisions you’ll make further on.
Is it to increase brand awareness and to reach a new audience? Do you want to run a retargeting campaign? Are you looking to boost your sales or web traffic?
Whatever it is, you have to get it straight from the start. Don’t get into programmatic advertising if you don’t know why you’re doing it.
2. Choose an Advertising Channel
Programmatic advertising exists in a variety of digital channels. This includes display, video, voice, social, and even television.
You have to decide which of these or a combination of these you can push your ads on. For instance, we have display ads.
What are programmatic display ads?
Display ads refer to visual ads, whether it’s static or animated. They’re placed at the header, footer, and sidebars. These are the ads you typically see when you visit a website.
Video ads are becoming popular, as well, as video continues to be the preferred media. In 2018, programmatic video ad spend accounts for 76.5% of all digital video spend.
Another example is social ads, which appear in social media platforms. This also benefits advertisers in a way that they get access to the data gathered by the platforms.
There are other channels you should know so you can optimize your strategy. The types of channels for your campaign will dictate which DSP to choose.
3. Sign Up with a DSP
Like we’ve said above, a DSP is the advertiser’s tool for bidding and searching for ad inventories. It’s connected to an ad exchange and it organizes your ad for you.
Google AdWords is an example of a DSP, although it’s limited to Google’s inventory. When you run ads through this platform, you only get access to the websites included in the Google Ad Network. For example, you won’t be able to access Facebook Ads with AdWords.
That’s why it’s better to sign up with third-party programmatic DSP in most cases. You can get access to ad inventories not included in Google’s network. This increases your chances of running campaigns in profitable placements.
DSPs offer different levels of reach, segmentation, and channels. These are important factors when considering the DSP. It must align with your campaign and market.
4. Launch an Ad
Some platforms, like Facebook, have a predetermined CPM. With DSPs, however, you get to set your own. You can enter the CPM, limits for impressions, and the start and end dates of your campaign.
After adjusting these and more, you should then set your targeting parameters. Think about your buyer persona and define your target audience using them. Choose their demographics, language, interests, devices, and such.
You can then upload your ad, launch it, and wait for the results.
Benefits of Programmatic Advertising
Aside from shaving off precious time from menial processes that can take ages to complete, programmatic advertising offers plenty of other benefits, such as below.
1. Better Targeting
Gone are the days of the “spray and pray” method of advertising, wherein you cast a wide net hoping to catch a lot of fish. This seems like a good method, but the truth is that you’re paying even for the fish you didn’t catch.
With programmatic advertising, advertisers can use targeting tactics like segmented audiences. Using the gathered data, your ads will only appear to the right people at the right time. This is what 76% of programmatic advertisers like about the platform.
The programmatic advertising platform uses real-time data to identify online consumers that fit your audience. It takes into account the demographics, geography, behavior, interests, and so on.
You don’t have to show your ad to websites or users that don’t fit your criteria, hence better targeting. You only pay for the valuable impressions and not those that aren’t likely to click on your ad.
2. Access to Wide Ad Inventories
The digital touchpoints of an average user are increasing. Is your business keeping up?
Don’t worry, you can keep up using programmatic advertising.
It allows you to reach your audience where they are. The data you get from running ad campaigns through this platform will also allow you to optimize your future campaigns better.
3. Transparency
In traditional advertising, you don’t get the results of your campaigns right away. It can take weeks after the ads go live, which means you won’t get to optimize it in real-time.
This isn’t an issue with programmatic advertising. You have real-time access to data about the performance of your ad, such as your current budget spend.
You can even adjust your live campaigns if you’re not seeing good results. This gives you the chance to improve your results in real-time.
4. Protection Against Ad Frauds
The digital marketing industry isn’t immune to fraud. It’s quite common for publishers to employ shady tactics to dupe advertisers.
However, the instances of ad fraud in programmatic advertising are much lower than other types of digital ads. This is because it produces real-time data that’s always available to advertisers. They can, in turn, monitor the publisher’s performance.
Most platforms also fight against ad frauds by preventing or blocking bot traffic. Should a fraudulent activity slip into its system, major platforms will offer ad credits.
Find the Best Programmatic Advertising Company for You
What are programmatic ads? We hope we provided the answers you need but keep in mind that understanding their purpose is different from knowing how to use them for your goals. Although it seems like a good way to leave the processes to the robots, you still need the help of human experts to use it to your advantage.
Find the right people to handle your programmatic ads. Contact us for more details.
