What Exactly Is Programmatic Marketing?

Learn how programmatic advertising differs from more traditional media buying methods so that you can tailor advertisements to your target audience.

For quite some time, programmatic advertising has been a buzzword in the marketing industry. But what exactly does programmatic do? What distinguishes it from traditional display marketing?

Continue reading to learn everything you need to know about programmatic advertising.

What Exactly Is Programmatic Marketing?

For media buying, programmatic advertising employs automated technology and algorithmic tools. The term programmatic refers to the process of buying and selling advertisements in the advertising space.

The use of automation distinguishes programmatic advertising from more traditional media buying methods. It analyses a wide range of user signals to ensure that ads are served to the right person, at the right place, and at the right time. Consider programmatic to be the umbrella category in this category, with various types of programmatic buying classified beneath it.

What Is the Difference Between Programmatic Advertising and Display Advertising?

It’s easy to mix up display and programmatic ads, especially with Google’s advancements in automated and real-time bidding.

The primary distinction between programmatic and display advertising is:

• The term “programmatic” refers to the method by which advertisements are purchased.
• The format in which advertisements appear is referred to as display.

The ability to buy ads across platforms is the second most significant difference between display and programmatic. When placing ads within a specific ad network, such as the Google Display Network, display ads are more commonly referred to. Programmatic advertising, on the other hand, elevates display media to new heights.

Programmatic platforms, such as sell-side platforms (SSPs) and demand-side platforms (DSPs), enable advertisers to buy ad inventory across an open network of platforms.

Advertisers typically have control over the following parameters when using programmatic or display:

• Audience.
• Strategy for bidding.
• Budget.
• Assets and creativity
• Placements.

Platforms for Programmatic Advertising

Throughout the years, automated technology has made significant advances. There are numerous kinds of programmatic platforms.

Platforms are classified into three types:

• Platform for the sell-side. This platform, also known as a “supply-side platform,” enables publishers to sell ad impressions to advertisers in real time. This platform includes DSPs as well as ad exchanges.
• Platform for demand. Advertisers can use this platform to buy ad inventory across multiple platforms at the same time.
• Advertisement exchangers This is how SSPs distribute ad inventory to DSPs. DSPs connect to an ad exchanger, where ad prices fluctuate based on the inventory’s competitiveness.

To become acquainted with the various platform types, let’s look at some of the major players in each category.

Platforms for Selling

A comprehensive list of SSPs for publishers includes the following:

• Ad Manager by Google
• Amazon Publishing Services
• OpenX.
• AdMob by Google
• Yahoo Advertising Technology
• TripleLift.
• PubMatic.
• Verizon Communications Inc.
• Xandr (Microsoft).
• Index Trading.
• Sovrn. sMagnite. sMedia.net.
• Criteo.

If you’re looking for a video SSP, some of the top companies to consider are:

• Teads
• SpotX
• AdColony (now DigitalTurbine)

While there are many more options for publishers, these are companies you may be familiar with but may not have associated with programmatic technology.

Platforms for Demand

These company names, like SSPs, may ring a bell and provide DSPs. Among the best DSPs are:

• 360° Video & Display (Google).
• Trade Desk.
• DSP from Amazon.
• LiveRamp.
• DSP for Adobe Advertising Cloud
• StackAdapt.
• Amobee.
• Yahoo Advertising Technology
• AdRoll.
• Basis (formerly Centro).
• RhythmOne.
• Choozle.
• BrightRoll.

Among the larger DSPs for Connected TV and video are:

• OneView
• TubeMogul (Roku)
• MediaMath

Again, advertisers have access to a plethora of DSPs. It is critical to select a DSP that has the features and inventory you require.

Some DSPs provide self-service advertising, while others provide both self-service and full-service advertising (likely to larger advertisers or agencies).

Advertisement Exchangers

Some of the more well-known ad exchangers for publishers are:

• Xandr (Microsoft)
• Verizon Communications Inc.
• OpenX
• PubMatic
• Ad Exchange by Google
• Index Trading
• Magnite
• Smaato

Not all ad exchanges are created equal. Publishers must conduct thorough research and select platforms that align with their objectives.

What Is the Price of Programmatic Advertising?

Simply put, programmatic advertising can be as cheap or as expensive as your budget allows. It’s a common misconception that programmatic technologies can’t help small businesses, but we’re here to dispel that myth. Typically, programmatic ads are purchased on a cost-per-thousand-impressions (CPM) basis.

CPMs typically range from $0.50 to $2.00. CPMs, on the other hand, can be much higher due to factors such as:

• Whichever DSP you select.
• Your intended audience.
• The degree of competition.

The more niche your audience, the higher the CPM you will pay.

So, whether you’re a multi-million dollar advertiser or a small business just starting out, programmatic is likely to fit into your advertising budget.

What Are the Advantages of Programmatic Ads?

Incorporating programmatic advertising into your marketing strategy has numerous advantages.

Among the many advantages are:

• a large audience reach
• Awareness that is efficient and low-cost.
• Data and analysis in real time.
• Capability to use both first-party and third-party data.
• Cross-device campaign strategies are possible.

Reaching a Large Audience

The ability to grow and scale is arguably the most important benefit of programmatic advertising. Because of the abundance of cross-platform inventory, programmatic is the best way to buy ad inventory to reach the masses.

Awareness That Is Efficient And Low-Cost

In addition to the previously mentioned benefit of increasing reach, programmatic advertising is one of the most cost-effective forms of advertising available today. We previously discussed average CPMs for programmatic advertising that ranged between $0.50 and $2.00. Even on a shoestring budget, your marketing dollars can go a long way towards reaching your target audience and raising awareness of your product or service.

Data And Analysis In Real Time

Advertisers benefit from near real-time data because programmatic platforms rely on real-time bidding

What is the significance of this?

With real-time data, you can make quicker decisions and pivots. It also shifts you from a reactive to a proactive mode.

Using Both First- and Third-Party Data

Another advantage of programmatic advertising is the variety of data segments that are available to advertisers. Advertisers, for example, can securely upload their own first-party data and target those individuals directly using real-time bidding signals.

Taking it a step further, DSPs have a plethora of third-party segments that advertisers can target if they lack first-party data. Turning first-party data into third-party data by creating lookalike audiences of their own customers is another type of third-party data advertisers can use. This route allows you to find new customers who are similar to your current ones.

Campaign Strategy for Multiple Devices

It’s worth noting that programmatic advertising is typically regarded as an awareness strategy. As a result, companies that focus solely on last-click success frequently overlook programmatic advertising’s true potential.

So, what role does programmatic play in a cross-device campaign?

The key is to capture that initial user awareness via programmatic ads. A user is unlikely to purchase a product or service after their first interaction with a brand. Once a user’s interest has been piqued, you can remarket to them on other platforms based on their interaction or engagement with the original ad. Integrating that data from the first interaction to the final purchase is critical to determining the success of your programmatic strategy.

Programmatic Advertising Types

There are various kinds of programmatic advertising. These should not be confused with the actual programmatic platforms. Programmatic advertising types are simply how an advertiser purchases ad inventory.

The four most common types are as follows:

• Bidding in real time. This type of bidding is available to all advertisers, and ad auctions take place in real time. This is also referred to as the “open marketplace.”
• The private market. This bidding occurs when publishers have contracts with a small number of advertisers. Because of the high demand for ad space, these websites typically charge a premium.
• Deals that are prefered. A type of programmatic advertising that is less well-known. Advertisers select ad spots before placing them on the private or open market. This is also referred to as “spot buying.”
• Guaranteed programmatic. Similar to a prefered deal, but no auction bidding is involved. The publisher and advertiser reach an agreement on a set price for ad inventory.

Conclusion

The fundamentals and benefits of programmatic advertising can help guide your existing programmatic strategy, or if you’re just getting started, you can create a new programmatic strategy.

Understanding the functionality and features of each platform is essential for programmatic success.