US programmatic ad spending is expected to reach $271 billion in 2025. That’s an impressive increase of over $100 billion compared to 2021.
As more and more marketing dollars move towards this digital strategy, understanding programmatic advertising is crucial for any executive looking to stay competitive in today’s market.
After all, programmatic advertising is more than just a valuable tool for gathering consumer insights and data. It’s an effective means of reaching the right audience with personalized messaging, making it a vital component of any digital strategy if your goal is to attract and capture highly-qualified leads.
In this quick guide, we’ll walk you through the ins and outs of programmatic advertising, including the benefits, best practices, and different types of advertising.
What Is Programmatic Advertising?
Programmatic display advertising is a way for advertisers to automate the buying and selling of ad space online. Instead of manually negotiating with publishers, programmatic technology uses data and algorithms to decide where and when to place ads.
It’s important to note that the ad-buying process’s automation has made buying ads easier, but it still requires work, typically by a professional or team of professionals with experience and expertise in crafting these types of campaigns.
This includes tasks such as preparing insertion orders or ad tags, but it also involves a high level of experience and attention to detail in creating a precise, professional advertising strategy that generates high-quality leads.
Overall, when entrusted to a professional, programmatic advertising provides you with more opportunities for optimization and improvement.
How Does Programmatic Advertising Work?
When it comes to an understanding of how programmatic advertising works, it’s helpful to understand the main components and how they contribute to an effective strategy. This includes the following:
- Demand-Side Platform (DSP): Software used by advertisers and agencies to buy ad space through automated processes on various ad exchanges.
- Supply-Side Platform (SSP): Software used by publishers to manage their ad inventories and sell them through programmatic channels.
- Data Management Platforms (DMP): A platform that collects data from various sources and organizes it into one central location. This way, advertisers can easily access and analyze data from their campaigns to make more informed decisions.
- Ad Exchanges: A marketplace where advertisers can buy ad space from publishers via automated processes.
To summarize, with programmatic advertising, advertisers first identify their target audience and decide how much they’re willing to pay for a specific demographic. Ad space is algorithmically purchased from available publishers, matching the ads with the desired audience. Programmatic advertising is a powerful way to connect with lead-generating targets while using highly-advanced technology.
Benefits of Programmatic Advertising
Harnessing the power of programmatic advertising can lead to more efficient targeting, better ad placement, and ultimately higher returns for our clients. That’s not all, though. Here are five of the most significant benefits of using programmatic advertising.
Real-Time Data Insights
Through programmatic advertising platforms, you can track things like ad impressions and click-through rates in real-time, allowing you to rapidly adjust your strategy if something isn’t working.
Programmatic data and technology allow you to target specific demographics, behaviors, and interests to create highly personalized ad campaigns.
Programmatic advertising uses an algorithm to automatically place ads on websites your target audience is likely to visit. This means your ad has the potential to reach a larger and more diverse audience, increasing your overall reach.
Programmatic ad buying automates many of the tedious tasks involved in traditional ad buying/ This increases efficiency and frees you up to focus on strategy and creative development.
Flexible and Scalable
With this type of advertising, you have the flexibility to quickly adjust your campaigns in response to changes in consumer behavior or market trends. Moreover, you can quickly increase or decrease your ad spending as needed.
What Are Programmatic Advertising Platforms?
Programmatic advertising platforms use algorithms and real-time bidding to help marketers target the right audience and improve ad performance.
The Best Programmatic Advertising Platforms
- PubMatic is one of the most comprehensive programmatic ad platforms. Not only is the platform pretty user-friendly, but you’ll have access to a wide range of demand sources, increasing the opportunity for successful ad placements and higher revenue for publishers. PubMatic also offers a fraud-free guarantee.
- MediaMath is especially great for omnichannel ad campaigns. The platform’s precision targeting tools and in-depth performance analysis make it easy to quickly gain insights into what is working and where improvements can be made.
- Google Ads Manager is one of the most popular ad platforms worldwide, with 75% of ad impressions served through the network. What the platform lacks in its value offerings, it makes up for in high-quality data management and analytics tools.
- Adobe Advertising Cloud offers slightly more than Google Ads, with the ability to publish connected TV ads on top of the standard ad offerings. While the interface is somewhat difficult to learn, the platform does offer robust campaign targeting capabilities.
- AdRoll has been around for quite a while, meaning that the servers have a lot of data to pull from. This advertising platform is especially great for targeting, allowing you to create everything from lookalike and contextual audiences to interest-based campaigns.
5 Types of Programmatic Advertising
What are your options when creating a programmatic advertising campaign? You can choose from one of the following five types of programmatic display ads.
- Display ads are ads that you see on the header, footer, and sidebar of a website
- Video ads appear in a video. You’ll see them before, during, or at the end of the video.
- Social ads appear on social media platforms. They rely on the platform’s data.
- Audio ads are served in audio content such as podcasts.
- Native ads are integrated into their content platform, making them harder to distinguish from regular content.
How to Use Programmatic Advertising Successfully
When used correctly, programmatic advertising can streamline ad buying and allow for more targeted, efficient campaigns. So how do you use it successfully?
First, make sure you have clear goals and KPIs in mind. Do you want to drive website traffic or increase conversions? This will inform your ad placement and targeting choices.
If you’re unsure of what your KPIs are or how to identify them, it’s important to work with a team of experienced professionals who can help you identify the correct goals according to your business needs and market competition.
This is a critical step of the advertising process and can significantly affect how your programmatic advertising campaign evolves and performs.
If you’re working with a team of professionals (like ours), they’d then help you clearly understand your target audience and your campaign messaging. This will ensure that your ads are placed in front of the right people.
It’s also important to keep track of your ad performance and make adjustments. Monitor clicks, conversions, and other metrics relevant to your goals. Watch out for programmatic ad fraud as part of this monitoring process.
All in all, utilizing programmatic advertising isn’t a guarantee of success, but if done right, it can elevate your advertising strategy to the next level.
What Is an Example of Programmatic Advertising?
As you work your way through understanding programmatic advertising platforms and how to incorporate this type of advertising into your marketing strategy, you might wonder what a successful programmatic advertising campaign looks like.
One great example comes from “The Economist.” The publication analyzed the data of its subscribers to create audience segments based on interest categories such as politics, finance, and technology.
They then built lookalike audiences based on those categories. People with interests in each category received a targeted ad, which resulted in impressive metrics, including:
- 650,000 new prospects
- 65% increase in brand awareness
- 10:1 ROI
Is Programmatic Advertising Worth It?
Instead of targeting a specific audience based on demographics and interests, programmatic allows for an automated process where ads are targeted in real-time based on user behavior. The result? A much higher chance of ad engagement and conversions.
But is this type of advertising worth it? That ultimately depends on your budget and industry. We believe that any business in any industry can benefit from investing in programmatic advertising, but only if they do it right.
We can help you create high-converting programmatic advertising campaigns that allow you to target the right customers at the right time, generating high-quality leads at a lower cost. Ready to start? Contact us today to find out how we can help.