Programmatic advertising has long been a buzzword in the digital marketing arena. However, many business owners don’t have a firm understanding of what programmatic advertising is, let alone the ideal ways to utilize it. This guide will address the definition of programmatic advertising as well as its common methodologies, strategies, and utilization.
What Is Programmatic Advertising?
In general, programmatic advertising refers to the practice of using software to purchase and set up digital advertising campaigns. Multiple, well-known platforms such as Google and LinkedIn offer programs to analyze users and target and build ads in this way. However, the scope of programmatic advertising is not limited to the internet. Companies also choose to build and purchase television and audio ads in this way.
Whereas businesses approached traditional ad-buying in person or over the phone, the process is now streamlined using software. Instead of calling or emailing an ad agency, discussing the aim of your ad campaign at-length, and negotiating price, programmatic advertising offers you the option to use software to accomplish the same much more quickly. Algorithms within the software combine with your own preferences to guide the setup of each ad.
Is Programmatic Advertising Considered Automated Advertising?
While programmatic advertising promises a number of time-saving measures and offers automation of some of the more tedious aspects of advertising, one thing it does not guarantee is full automation. Instead, the software purchases display space in which to put the ad you’ve set up – users must still plan ads and purchase them manually. In addition, ad optimization is included in many platforms, allowing users to choose a target audience, customize the ad to pinpoint a specific call to action or desired outcome, and more. In short, programmatic advertising is not fully automated.
What Are Some Advantages of Programmatic Advertising?
The advantages of programmatic advertising are numerous:
- It’s efficient. A 2018 study by the Boston Consulting Group noted that programmatic ads took 57% less time to set up that traditional ads. Why? Traditional ads rely on a largely manual process to insert the correct information into the order, as well as the need to perform the process all over again when a change is made. Programmatic allows for the software to change the algorithm instantly, as well as keep the base information on-hand even in the event of future changes.
- It allows buyer control. This notion may seem contrary to the automated nature of programmatic advertising. However, the buyer still retains a great deal of control over the targets of the ad, as well as in making changes to the campaign once the results begin to roll in.
- It returns feedback Programmatic algorithms have the potential to offer a diverse set of feedback on the reach, performance, and efficacy of your ads. In turn, you can use this information to make adjustments to your current campaign or alter your next campaign to achieve the results you want.
- It’s financially efficient. Depending on the model, users can pay on a few different billing schedules, but a shorter, 30-day cycle allows you to alter your scheme instead of committing to a 90-day program. In addition, users are able to pay one invoice, instead of several from a traditional advertiser.
How to Get Started
If you believe programmatic advertising could benefit your business, follow these steps in order to get started:
- Determine your budget. Budgeting for programmatic advertising can be simpler than with traditional advertising but will likely be an added cost until you determine whether or not you want to decrease your traditional advertising budget. Once you arrive at a number, research your options and consider the fact that vendors can differ in the way in which they bill. You may be subject to spending minimums or contract lengths of 30 days or more.
- Know your audience. Gather any data you have regarding your target audience, This can include analytics of past campaigns, survey data, third-party data, and even CRM data. These insights will help you or a system algorithm determine which type of campaign will reach your audience and which ideal platforms to begin.
- Decide on a vendor. The level of control you wish to retain throughout the process is crucial in deciding which vendor will work for your business. If you want to release your ads to a vendor that will help design and insert them for you, similar to a traditional agency with less fuss, consider programmatic guaranteed. If you’d rather contribute most information yourself, consider a lower barrier platform.
- Plan your ad. If you have a creative team in-house, or if you’re working with a programmatic guaranteed vendor, you can develop at this point. If you’re structuring your ads on an online builder, you can input your audience data and determine an avenue of delivery. Prepare ads across multiple formats for insertion into many areas.
- Execute and analyze. Once your ad is released, full-service vendors should provide you with data and analysis regarding impressions from that ad. Lower-barrier vendors often release the data directly to you for your own analyses. Use the data to determine how to move forward.
- Take your next steps. Is your money best spent maintaining your current trajectory? Or, could you benefit from purchasing a second ad or campaign in order to perform A/B testing of the efficacy of both? The benefit of automating portions of your planning and insertion is that you have more time to analyze and determine the next steps to take. With some vendors, you have an added bonus in having a partner to help you do so.
Is Programmatic Advertising for You?
Many businesses stand to benefit from programmatic advertising. The time-saving benefits allow you to use your time determining the most effective avenues and how to move forward with your advertising dollars, instead of haggling with agencies. As more and more businesses discover the benefits of programmatic advertising, industry experts predict as much as 86% of all ad spending will be programmatic advertising by 2020. Will your business be among them?
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