Programmatic ad buying refers to the use of software to purchase digital advertising as opposed to the traditional process that involves Request for Proposals (RFPs), human negotiations, and manual insertion orders. Programmatic software also allows advertisers to buy guaranteed ad impressions in advance from specific sites.
As more and more companies move towards automation, understanding the many different layers of programmatic advertising is important. Because of the amount of accessible data available through cookies, web-browsing habits, impressions, and clicks, automation allows marketers the freedom to focus more on strategizing and building their brand as opposed to worrying about advertising negotiations. Also, this data allows companies to easily restructure their strategies based on real-time performance. No longer do they have to wait months, or even years, to see if a certain strategy is meeting expectations.
According to eMarketer, 2016 will see programmatic ad spending reach $22.10 billion. That is 67% of total digital ad spending in the U.S. This rapid acceptance by companies and marketers means they are maximizing their advertising dollars by leveraging this efficient targeting. More companies are also turning their attention to mobile, as more than half of web traffic happens on mobile devices. “This year, mobile programmatic spending will reach $15.45 billion in the U.S. And next year, mobile video programmatic spending will exceed its desktop counterpart for the first time,” says eMarketer senior analyst Lauren Fisher.
Programmatic Advertising Terms:
1. Real-Time Bidding (RTB):
Ads are displayed on a per-impression basis, which allows different bids to be set for different types of sites, audiences, and themes.
2. Digital Management Platform (DMP):
Data warehouse that stores and sorts information and processes information for marketers.
3. Supply Side Platform (SSP):
Works with publisher to sell impressions for as much as possible and maximize ad revenue.
4. Demand Side Platform (DSP):
Activates insights and streamlines ad buying process by using impression-level decisions to have most efficient impressions.
5. Above-the-Fold (ATF):
Ads bought that show on screen when page is first loaded or, above the fold.
6. Below-the-Fold (BTF):
Ads bought on page that are below the portion of the page revealed when first loaded.
Types of Programmatic Advertising:
1. Programmatic Direct:
Buying ad space on a specific website to guarantee your ad will appear in a specific space.
2. Real-Time Bidding (RTB):
Real-time auction based on bid amount and quality score, such as Google AdWords only for display ads.
Benefits of Programmatic Advertising:
Artificial intelligence and their algorithms analyze visitors’ behavior to optimize real-time campaign towards audience more likely to convert.
Analyzing data means strategies can be restructured as needed and ads can target specific audiences and demographics based on cookies and web-browsing history.
3. Real-Time Ads:
Changes can be made in real-time, making it more cost-effective.
Concerns with Programmatic Advertising:
According to Media Buyers, as mobile use and mobile advertising both increase rapidly, there is still almost half of ads going unseen. As companies pay for unseen ad impressions, costs can skyrocket.
More than 1/3 of online traffic is fraudulent. While artificial intelligence and algorithms are getting better to distinguish real traffic from fake, it is still one of the major drawbacks if companies are paying for fraudulent impressions.
3. Brand Safety (Seedy Sites):
A common black hat tactic for unsavory publishers is to list more reputable websites on an auction site and then, after bids have been collected, change where the ads are displayed to seedier sites. This practice is known as URL masking and has resulted in the rise of security firms making sure your ads don’t end up on seedy sites ruining your brand’s reputation.
How to Use Programmatic Advertising for Your Business:
By targeting specific audiences and demographics, your marketing department can now rest assured knowing your targeted audience sees your ads. No longer will you have to wait and see results through purchases. As the amount of data continues to grow, and the capabilities of artificial intelligence and algorithms learns how to apply that data, marketers will be able to dedicate more time to structuring and developing branding strategies. As programmatic advertising continues to improve its efficiency at pairing audience data with ad inventory, your company needs to reevaluate your advertising strategy.
When you’re company uses automation to advertise across all platforms (it’s even available in some television markets), programmatic advertising can be an integral part of your inbound marketing strategy. As marketers dedicate more energy to developing brand strategies, they can also spend more time developing content that will drive traffic to your site.
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