Programmatic Advertising Introduction For Traditional Marketers

Are you a traditional marketer who doesn’t really understand programmatic advertising?

Embrace Programmatic Advertising: A Guide for Marketers

Are you tired of endless acronyms like SSP, DSP and DMPs? Unfortunately, the programmatic advertising ecosystem is full of three-letter acronyms. Perhaps they are designed to scare away old school media folk.

Fear not; this guide will bring you up to speed on what programmatic ad buying is.

This article covers programmatic advertising strategies, how media buying works, and how to step-by-step apply the knowledge into your advertising strategy.

Programmatic display native ads b2b isn’t all that new anymore, but it is becoming one of the most valuable strategies for brands and advertisers.

It’s no secret that the digital advertising sector is expanding and developing rapidly. By 2021 programmatic advertising spend will reach 88% of all US digital display ad spend, which accounts for $81 billion according to Emarketer.
While this sector continues to grow, many people might feel behind how this type of advertising works. It pays to be educated on the basics of programmatic ads to avoid falling behind in your marketing.

To get on board with programmatic media buying, you must understand how it differs from traditional digital marketing methods and why it’s so effective.

Here are some insights that may help:

• Programmatic ad campaigns use data to target customers.
• Automating buying across hundreds of sites saves brands time and money by eliminating tedious tasks like manually buying on placements or submitting ads to multiple sites at once. In other words, automation helps brands get their ads in front of the right people at the right time.
• Programmatic ad campaigns also use automation to serve dynamic/personalized content, track engagement rates and capture valuable audience insights.
• Programmatic ad campaigns are conducted with preset rules to engage viewers, measure campaign performance and optimize budgets in an automated way. This strategy uses historical data to predict how users will engage with ads so marketers can set bidding strategies for desired outcomes.
• This process also helps brands better reach their target audiences at the beginning of the path to purchase funnel. With programmatic ads, marketers can make changes to their campaigns in real-time. For example, if a brand wants to change an ad’s creative, they can do it instantaneously instead of manually submitting it for approval by humans on multiple sites. They can also automate bidding strategies based on machine learning, track engagement rates and optimize spending accordingly.
• Bringing all of this to one platform can save marketers a lot of time and resources, which they can then use to focus on areas that will drive innovation for their business.
• Programmatic advertising is unique because it lets brands advertise across sites without having to do any manual legwork directly with each website; that’s the traditional way, that’s the old way.
• Advertising technology helps automate processes like targeting audiences, connecting with them, and measuring engagement rates so you can avoid wasting time and money on ads that won’t lead to a sale.

But before we get into the weeds, let’s start at the beginning: what exactly is programmatic advertising?

What Is Programmatic Advertising?

Programmatic advertising is a digital ad buying method that uses algorithms instead of humans. This strategy uses data, which means you can target users more precisely and measure results more effectively.

The idea behind programmatic advertising is that machines are better at identifying the right audience than people are. We humans may not always choose what’s best for us – but our devices know what we like to read, watch, play, or where we’re likely to visit next better than we do.

How does Real-Time Bidding (RTB) work?

RTB is a type of programmatic advertising that lets advertisers bid on ad placements according to factors like relevancy, geographical location, and audience demographics through real-time auctions. Auctions take place in less than 0.2 seconds.

Here’s how it works: an advertiser sets criteria for their campaign, including a budget, audience type, time frame, and other preferences. An algorithm then automatically searches for opportunities to display relevant ads to audiences matching these criteria.

These opportunities are auctioned off to the advertiser with the highest bid, who wins based on their preferred criteria. The advert is then published where your audience can view it. A record of this transaction is stored in a data warehouse for reporting/analytics purposes.

This process eliminates tedious tasks like manually buying ads across sites and creates more opportunities for advertisers.

Types of Programmatic Ad formats

Programmatic Display Ads – Banners, static and animate in many shapes and sizes:

This kind of programmatic advertising serves ads on desktop, mobile, and tablet sites based on behavioural targeting, contextual targeting, or geotargeting. Advertisers place bids for ads to be displayed on certain types of content within certain geographical boundaries.

Programmatic Video Ads – Pre-roll, mid-roll, post-roll, in-stream, out-stream
These ads appear in pre-or mid-rolls of videos, gaming content, and other types of digital media such as between articles, but mostly it’s video ads before video content. Learn more about Pre-roll Advertising Agency.

Programmatic Native Ads – Text only or text + image
Native ads are often seen as a better fit for brand messages because they look similar to the surrounding editorial content instead of appearing in banners or pop-ups that can be disruptive.

What is a Data Management Platform?

The data management platform (DMP) is a trusted online service that allows marketers to create profiles of users based on their behaviours and interactions with a specific brand or website. Data from a DMP can be used in combination with other parts of the marketing stack, such as your CRM system, ad servers, location-based systems and email service providers to deliver personalized and relevant messages across screens and devices.

Data management platforms (DMPs) are an integral part of the modern marketing arsenal, serving as hubs for data coming from all sources. Over time, marketers have come to rely more and more on their DMPs for new types of insights into their users, and the DMPs themselves have evolved to accommodate the growing expectations.

What is an Ad Exchange?

Ad exchanges are digital marketplaces. They connect publishers and advertisers, allowing them to buy and sell ad space in real-time. Advertisers use an ad exchange to manage the buying and selling of their online advertising through a vast network of web publishers.

Publishers can participate in multiple ad exchanges depending on which types of advertisers they want to attract, which ad formats they are using, and what types of traffic they’re looking for. Think of an ad exchange as the stock market with inventory instead of securities. The most well-known exchanges in the US are Google’s AdX, Chitika, OpenX, Yahoo’s Right Media Exchange (RMX), Sovrn and Appnexus.

What is a Demand Side Platform?

A demand-side platform (DSP) is a technology platform that enables advertisers to manage, optimize and serve digital media buying across all advertising formats.
Demand-side platforms are different to supply-side platforms which, sell inventory through an ad exchange to the DSP through real-time bidding (RTB).

What’s the difference between an ad network and a DSP?

DSPs typically have access to more demand sources; this allows them to be more effective in buying inventory at the best price for an advertiser.

Ad networks are typically only able to place the inventory they sell within their ad server across their network, where DSPs can place ads across many different types of ad servers and demand sources. This allows them to be more effective for advertisers because you’re buying inventory at the best price across all different types of sources through one platform instead of having to go through various advertising networks.

Ad networks typically sell lower-priced inventory, sometimes known as the remnant, where DSPs can buy premium publishers at the best price across all types of ad servers and demand sources. This allows them to be more effective for advertisers because you’re buying higher quality inventory at the best price through one platform rather than going through many networks.

How much does Programmatic Advertising Cost?

The cost is much as you are willing to invest.

In traditional advertising, it would have been hard to spend $0.01, but technically this is possible in programmatic, that’s because you don’t have to commit large spends to buy online ad space. The programmatic ecosystem lets you spend as little or as much as you want. Algorithms help you decide where your dollars are best spent to deliver an effective ad campaign.

There may also be some minimums with the programmatic technology provider.

Most DSPs minimum fees are around $10,000USD monthly or £7000 GBP. In display advertising at an average CPM of $1.50 would generate 6,666,666 impressions.

Human negotiation in the traditional media buying process was a big part of daily life, digital advertising does away with much of that human negotiation.

Programmatic Agency Fees

Typically media agencies will take an 8-15% media optimisation fee.
Media agencies may also charge set up costs and other costs around media planning and developing a programmatic advertising media strategy.

Programmatic media is a complex space, so an excellent programmatic media agency is worth its salt to maximize your ROI. They will help you to specify the right advertising technology infrastructure and ensure ads are served to the right target audience.

Programmatic Advertising for Traditional Marketers Summed Up

Programmatic advertising provides more precision than traditional media buying and gives marketers better insight into their target audiences.

What’s more, implementing a programmatic advertising strategy can help marketers stay ahead of the competition and reach their audience with targeted messages at optimum times, ultimately leading to higher conversions and ROIs.

Programmatic advertising

• Faster workflow due to real-time bidding & programmatic tools
• Hyper-targeted audience for a better return on investment
• Automated buying methodology
• 100% trackable
• Reduces human effort
• Transparent
• Buy ad space through technology

Traditional advertising

• Low fraud risk
• Scalable audiences via TV & Outdoor
• Limited targeting
• Heavy labour cost due to inefficient workflow
• A slow and long planning process
• Buy ad space through humans and manual signature contracts
• Publisher by publisher planning and purchasing

If you want to learn how programmatic advertising can benefit you, don’t hesitate to get in touch with our team.

We’ll be happy to answer any questions you have about the process and how it could fix many of the problems plaguing your marketing strategy today. Don’t wait! Reach out now so we can start solving these issues together.