Programmatic advertising made simple
You’ve heard about programmatic advertising — also called programmatic marketing — but it seems complicated and maybe you’re not sure where to start.
Programmatic marketing is a modern approach to advertising, and it’s not too complicated once you understand the details. It has a whole lot to offer small business owners and enterprise organizations alike that want to make the most of their advertising resources.
If you’re looking to learn the basics of programmatic advertising so you’re ready to start right away, this post will help by covering:
- What programmatic advertising is
- How programmatic advertising works
- Benefits of programmatic advertising
- What programmatic platforms are
- Best practices for programmatic marketing success
What is programmatic advertising?
Programmatic marketing, or programmatic advertising, is the software automation of buying and selling digital ad space. Artificial intelligence (AI) programs connect marketers and publishers, collect relevant data, and facilitate bidding to relieve marketing teams of the repetitive, mundane work of manually bidding on ad spots.
This AI approach to ads is so popular, Statista reports 54% of media budgets go toward programmatically purchased media. And according to Insider Intelligence, 90% of all digital display ad dollars get spent on programmatic advertising platforms.
How programmatic advertising works
First, marketers use programmatic advertising software to set up campaign parameters like target audience, budget, and geographical reach. The platform then connects with online publishers who want to sell ad space and traffic. Data software quickly sorts through the clicks, cookies, and caches of internet users to inform an automated auction with real-time bidding over the best available ad space.
Imagine a giant forum where digital publishers display the ad space they have available to sell and companies that want to purchase ad spots can bid for the best opportunities. This is effectively what’s going on, but it’s a digital forum — called an ad exchange — where negotiations are automated in a digital auction with real-time bidding (RTB).
Like any business, buying and selling online ads is based on supply and demand. Publishers have the supply of ad space and traffic while the needs of advertisers determine the demand. AI software simplifies the supply and demand balance with three kinds of platforms.
- Demand-side platforms (DSPs) are the software advertisers use to buy traffic in various ad formats — desktop, mobile, TV, and more — from a large pool of digital publishers.
- Supply-side platforms (SSPs) are the software digital publishers use to sell their available space and traffic online.
- Data management platforms (DMPs) are data warehouses that connect to a DSP or an SSP to store the data they need to enable strategic decisions on the virtual bidding floor.
These platforms have simplified what was once a painstakingly manual process of buying and selling ads for thousands of advertisers and publishers and their ad networks.
Benefits of programmatic advertising
Programmatic advertising streamlines and simplifies paid ads in many ways, giving you and your marketing team more time for creative projects and strategic decisions that build the brand and drive revenue.
Setting up separate campaigns on multiple platforms — Google, Bing, Facebook, TikTok, Spotify, and more — is tedious and time-consuming. And monitoring each campaign across different devices adds even more complexity. Programmatic marketing streamlines and automates your ad buying across multiple channels.
While the software’s doing all the hard work, marketers can focus on more important matters, like understanding their audience, creating effective ad copy, and figuring out their next campaign strategy.
Programmatic marketing improves the ROI of your marketing efforts in several ways.
- Eliminate guesswork. Real-time data, sophisticated algorithms, and a single view of every channel increase your odds of success.
- Diversify programs. A programmatic ad campaign can diversify your risks in different markets, audiences, and devices.
- Stay agile. Since the bidding threshold is often low, you can start slow. Additionally, real-time data lets you react to a poor campaign or channel quickly and redirect your funds.
Indirectly, the consistency with which you can connect with your target audience as a result of a programmed, unified campaign leads to more happy, loyal customers.
Programmatic advertising gives you access to dozens of publishing networks. A programmatic campaign lets you quickly pick, choose, and pivot where you put your money.
Running an omnichannel marketing campaign all from one place lets you see all your ads and make better decisions about placement. You can personalize ads for different scenarios and have them ready to deploy automatically whenever a new opportunity arises.
Spending is flexible too. You can sign up for a minimum number of impressions to test the waters. And there are no pre-negotiated contracts that forbid you from changing midstream.
Better ad targeting
A survey by ParcelLab shows that 49% of users are targeted incorrectly by online ads, and 42% of those immediately unsubscribe from that brand’s marketing content. That leaves a big opportunity for marketers who are targeting right.
Programmatic advertising helps marketers send accurate personalized ads based on their audience’s demographics and behavior across devices and media. You can target, test, and measure throughout the entire customer journey by creating customer profiles that target people with the latest insights.
What are programmatic ad platforms?
Programmatic ad platforms are the software that makes it possible for digital publishers and marketers to sell and buy ad space. There are four different types of software.
- Demand-side platforms (DSPs) for marketers
- Supply-side platforms (SSPs) for publishers
- Data management platforms (DMPs) for both
- Ad exchanges
If you’re a marketer, all you need to worry about right now is finding a good DSP. Once you do that, connecting to SSPs on the ad exchange is relatively simple.
When evaluating a demand-side platform, consider these three key capabilities.
- Campaign management efficiency. Some DSPs are limited to certain media types or don’t allow you to see a complete picture of your customer. Choose a DSP that gives you the most control possible when you set up your campaign. Look for time-saving editing features like bulk editing tools and flexible scheduling.
- Data processing power. Technically, a DSP doesn’t even have to use a DPM to have some ability with data. That said, data is at the core of a good DSP, so you want one that has a workhorse DMP with access to all the relevant data.
- Monitoring and reporting capability. Your DSP should have a single dashboard where you can analyze performance metrics across all your advertising channels. The best DSPs offer real-time reporting.
Best practices for programmatic marketing success
Once you’ve chosen a DSP and are ready to embark on your marketing campaign, there are a few best practices to keep in mind.
Establish goals and KPIs first
An automated system to buy your ad space and traffic doesn’t free you from the responsibility of understanding your financial goals and priorities for the campaign. Defining your KPIs will help you set up your ad buying correctly and read your reports right, relating each metric — including visitors, page views, logins, CTA clicks, and more — with the goal you’re trying to achieve.
If this is your first attempt at programmatic advertising, start small. Make sure you understand the process and can determine if your goals are being met each step of the way. Set milestones for your campaign based on your KPIs and monitor the metrics accordingly.
Manage the automation
The biggest benefit of programmatic advertising is automation, but you can’t put your campaign on autopilot without checking on its progress. Pay attention to the tools your DSP gives you to watch attribution and other key measurements.
Remember, you’re still the brains behind the operation. Develop a healthy relationship between your marketing acumen and the AI tools at your disposal.
Beware of fraud
According to Juniper Research, ad spend expected to be lost from fraud this year is $23 billion in the US alone. Most of that fraud is from traffic bots. This should not keep you from programmatic ads, but it should motivate you to ensure your DSP has safety features to protect your brand. You want your traffic to be real and your ad placements to be meaningful.
Another issue is your customers’ privacy. A Chapman University study showed that while 26% of consumers preferred relevant ads, many are still concerned about how their personal information is being used. Make sure your ads are all compliant with privacy regulations.
Create great (targeted) ads
Take advantage of all that data processing power and improved targeting capabilities to create great, specific ads for niche audiences. A good DSP will let you see all sorts of demographic and behavioral parameters and allow you to tailor your ads to follow them along the customer journey — even across devices and platforms.
Getting started with programmatic advertising
Programmatic marketing gives you a much broader scope of customers to reach with your ads because it connects you with the greatest possible number of digital publishers. It also equips you with greater control and supervision over your campaigns and allows you to target your buyers with extreme precision. And since you can gauge your bidding to meet your budget, it requires relatively little investment to start.
If you’re ready to dip your toes into programmatic advertising, the first step is to choose a good demand-side platform.
Adobe Advertising Cloud DSP is the only independent ad platform that unifies and automates all media, screens, data, and creativity at scale, bringing the days of siloed media to an end. Learn more by taking a free product tour or check out the overview video.