Programmatic advertising accounted for 70% of all digital display ad spend in 2018, and is predicted to rise to 90% by 2020. It’s ‘the new normal’ – but what is it and why use it?
What is programmatic advertising?
Programmatic advertising is the way businesses use automated real-time bidding to buy ad space online. It uses AI and machine learning to buy, sell, and optimise digital ads on your behalf.
The advertiser inputs targeting factors such as location, timing, device, demographics, and interest categories, then select the exact bid for each individual user depending on their search intent. It also allows you to select the most relevant ad copy, which will best resonate with each type of user behaviour. Basically, it combines media and audience solutions to maximise ROI.
What did we have before programmatic?
Traditional ad buying methods involved greater human investment in the ‘legwork’ of bidding on and placing ads, including negotiations and eventual manual insertion of the ad into specific media; programmatic technology seeks to automate all possible areas of the ad buying process for display ads. Technology is expanding the arena of programmatic advertising and offering plenty of new options for targeting in an increasingly affordable and accessible sphere.
Before programmatic advertising, marketers turned to a handful of publishers with whom they would contract to run campaigns. Publishers had to individually traffic each ad and advertisers had little control over how often the same user would see the same ads.
Programmatic advertising has revolutionised this process by using automated software to handle previously manual transactions to deliver these meaningful engagements on any device, through any channel – from your social media feeds to your favourite website. This offers buyers and sellers the flexibility to adjust campaigns in real time, for optimal performance, making it much easier to dial up the things that are working and dial down the things that aren’t
- Access to a greater variety of as options in terms of supply side platforms (SSPs, such as Google Display Network) and publishers, for the best price.
- Improves efficiency and performance of campaigns, by accurately targeting potential customers with the right message, at the right moment and in the right place.
- Makes the most of your budget by optimising the to the best performing platforms and pacing spend.
- Although programmatic requires a front-loaded strategy and setup in terms of the keyword research and the bidding levels, automated buying saves time that can be used to develop and improve campaigns, refine targeting and increase ad (and landing page) quality.
- Marketers can also mine huge data volumes and use machine learning to unlock insights and find predictive signals, taking the guesswork out of keyword bidding, ad testing and optimisation.
- It allows you to maximise the reach of your audience at scale.
- Allows data to be reinvested back into your campaigns.
- Greater transparency of data.
The importance of data
Programmatic software needs data to begin the process of learning and refining ad space. Using existing data to determine short and long term goals and form an appropriate strategy. This data should then be organised and analysed, with first and third party data and cross platform data aggregated to achieve the best insights.
In particular, defining your initial audience is a vital part of the process you need a clear idea as to who you want to target. This will be based on the products or services which you sell and the audience research that you have conducted.
Remember, as ever, that data and analysis are a recurring task and schedule time to perform data gathering and analysis are conducted regularly.
With a trend toward in-housing for paid media, the demand for programmatic ad techniques is only set to grow.
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