What Is Programmatic Marketing? A User’s Guide
In the world of online advertising, there’s a relatively new phenomenon called programmatic marketing that’s changing the game on how businesses choose to buy ad space and target their audience. Keep reading to learn more about programmatic marketing!
But what is programmatic marketing and what makes it so successful in the world of online advertising and marketing?
The U.S. ranks as the highest in the programmatic ad market and accounts for 62% of the total global programmatic marketing spend. In 2019, digital marketers spent nearly 60 million U.S. dollars on programmatic marketing.
Digital marketers estimate that by 2022, the U.S. will spend $95 million on programmatic marketing ads.
In this article, we will break down exactly what programmatic marketing is and how to use it in your digital marketing strategy. Keep reading to learn more about what programmatic marketing can do for your business.
What Is Programmatic Marketing?
If you are unfamiliar with the term programmatic marketing and what it does, it may just sound like a bunch of technical jargon to you.
Programmatic marketing plays a critical role in digital marketing. Yet, it’s one of the least understood marketing concepts amongst digital marketing professionals.
As a digital marketer, it is important that you learn about programmatic marketing and the benefits it can offer you business. Now, digital marketers are realizing the importance of programmatic ads. But first, let’s start with a breakdown of what programmatic marketing is.
Programmatic marketing involves using software to purchase digital ad space instead of humans. This allows you to narrow your focus and advertise to specific users in specific contexts.
Understanding Programmatic Marketing
It’s important to understand how programmatic marketing works to be successful in your digital ad campaigns.
Traditionally, human ad space buyers are responsible for the bidding and purchasing of ad space. When humans negotiate buying ad space, the auction bidding process is much slower.
Now, human ad space buyers are being replaced by automatic bidding machines. Automatic bidding machines can calculate and buy ad space at a much faster rate. These machines can program your software to match your target audience.
Programmatic marketing involves the use of machines and algorithms to purchase any display ad space. With programmatic ads, you have more time to optimize and improve the quality of your ads overall.
What makes programmatic marketing effective is its automated bidding process. The way the bidding process works is it makes decisions based on the user’s data. This data shows the user’s interests, geographic location, and specific consumer profile.
This allows businesses to create hyper-targeted ad campaigns to ensure a return-on-investment (ROI). Hyper-targeted ads help you identify a target user. They then deliver relevant content and messages in the places where their users will see it.
For example, a user who loves fall fashion may come across an ad of a boutique that sells fall-themed and style clothing on their Facebook page while they are scrolling through their content feed.
The great part about programmatic marketing through hyper-targeted ads is that they are cost-effective. They can match your budget and the automated bidding machines will continue to self-adjust based on their inventory.
Thus, it is one of the most effective and efficient digital marketing strategies out there.
How Programmatic Marketing Works
In the marketplace for programmatic marketing, an auction takes place for interested companies and businesses to bid on putting an advertisement on a page where a visitor may enter.
The name of this process is an ad impression auction. A business enters an auction if a visitor who enters the page falls into their target market.
During this automated bidding process, which all happens in a matter of seconds, advertisers from these businesses will compete for this ad space. The business or person who bids the most money wins the ad space and their ad will appear on that specific page.
Keep in mind that this process is completely automated and takes place in milliseconds with the winner of the auction determined before the page loads for the user.
If the individual entering the page falls into a company’s target market, the company enters into the auction. Many advertisers will compete for this ad position, but only one company can win the spot. The company that bids the most money wins the position, and their ad will appear on the page.
The most important part of this process is its automation. It may seem like this takes place over a few minutes, but it happens in milliseconds.
They select the winner of the auction before the page loads.
In terms of budget, businesses choose the amount they are willing to pay for the ad space ahead of time which is also known as the maximum bid. They along with their competitors set their maximum bid and when the ad space is available, the bidding takes place to see which business best qualifies for the spot.
Once completed, the advertisement will then appear on the page and make an impression on the user. After viewing the impression, the user may find the content interesting and decide to click on the ad.
The Benefits of Programmatic Marketing
Now that you understand how programmatic marketing works, it’s important to know the many benefits that programmatic marketing can provide to your business.
There are many benefits that your business can receive as a result of programmatic marketing. These benefits of programmatic marketing include:
- Setting your price
- Setting the frequency
- Setting your goals
- Only paying for relevant impressions
- Versatility among different mediums
Setting the Price
You can easily set the amount that you want to pay for your ad space when it comes to programmatic marketing.
Similar to pay-per-click (PPC) advertising, you can set your maximum bid that you are willing to pay for that specific ad space. This helps your business in terms of flexibility as you are not required to pay a certain amount, allowing you to stay within your budget.
It’s a great choice for many businesses because you have complete control over the amount of money that you spend.
Essentially, you are only spending money on the people you want to reach. In other words, you are only paying results meaning the users who click on your advertisement.
Also, keep in mind that when you set the price, you have more control over your advertising and marketing campaigns providing a better experience for you.
Setting the Frequency
Another great benefit of programmatic marketing is that you can set the frequency and time when you set up your bid.
This allows you to be more efficient when it comes to bidding. For example, if you know that users within your target market typically browse at a certain time of the day, you can tailor your ad and marketing campaign to meet your needs.
This means only bidding for ad spaces that meet your needs and fit your qualifications. This proves to be very effective for your business because it gives you the chance to narrow your focus on your target market and audiences.
As a business, you will receive a greater ROI if you can reach your target market at precise times of the day when you know that they will be browsing online. This proves to be cost-effective and saves you time and money.
Instead of wasting money by bidding on ad space for people in your target market where they won’t see it, you can bid on ad space at a specific time when you know people in your target market are online and more likely to see it.
Overall, you will use your money wisely and make sure you are reaching your target market.
Setting Your Goals
Every digital marketing professional knows that for any campaign to be successful, you have to set certain goals.
With programmatic marketing, you can not only set but meet your goals when it comes to advertising. You are not just placing ads out there blindly hoping that someone in your target market will click on it.
Instead, through programmatic advertising, you are being more efficient because your ads are set to make an impression on those within your target market through hyper-targeting and automatic bidding.
It’s very important that once you have your goal, you target those specific people who will you think will help you achieve that goal. Goals can range from more traffic, brand recognition, or even conversions.
No matter what the goal is, programmatic marketing can help you achieve it.
Only Paying for Relevant Impressions
Arguably, the best part about programmatic marketing is that you are only paying for relevant impressions.
In other words, you are only paying for results. This not only saves you time and money but guarantees that you can hit and reach all of your goals when it comes to your advertising campaigns.
With programmatic marketing, you can set up the minimum amount of impressions that you want to receive to help ensure that you achieve all of your advertising goals in your campaign. It’s a great investment because you are only investing money in reaching the people who are in your target market.
Therefore, by reaching the people who are only in your target market, you are more likely to get conversions. This in turn gives you a greater ROI which is better for your business.
Versatility Among Different Mediums
One of the best benefits of programmatic marketing is that it is versatile.
This means you can use programmatic marketing on different mediums including a desktop, on mobile, videos, or apps. This makes it a great option because you can tailor your ads to the mediums that best fit your needs.
For example, if you know that the people in your target market generally conduct searches on mobile devices, you can then tailor your ads to reach them on that specific medium.
Thus, this allows you to reach people through the medium that your audience uses the most.
Why You Should Use Programmatic Marketing
Programmatic marketing is a cost-effective advanced targeting marketing strategy. Its ability to target specific audiences within your target market is what makes it so efficient and effective.
Through programmatic marketing, you can learn more about your target market and exactly what kind of content resonates with them. This allows you to perform A/B testing to help you figure out what kind of content and ads generate clicks and conversions.
Ad impressions are a very powerful and critical part of your advertising campaign. Through programmatic marketing, your ad impressions can help you get more conversions. You can also improve your ad campaigns, and a greater ROI overall for your business.
How Go Florida SEO Can Help
Programmatic marketing can help anyone and any business meet their goals when it comes to advertising campaigns. What is programmatic marketing is a question that all digital marketers should be able to answer.
On average, businesses invest $60 million on programmatic marketing annually with the number continually rising each year. Programmatic marketing has proven to be a great investment for those businesses looking to increase their reach and gain conversions through digital ad impressions.
If you are looking to enhance your digital marketing plan and strategies, you should consider working with us.
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