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The Complete Guide to Understanding Programmatic Digital Advertising

The world of online advertising is changing rapidly. There are new technologies that are emerging every day to give marketers more ways to target their potential customers through the buying of ad space.

One of the most well-known techniques is programmatic advertising, which uses technology to deliver ads automatically based on a number of different factors, including location, time, and browsing history.

If you’re not familiar with programmatic advertising yet, this guide will help you understand what it is and how it can benefit your business.

Digital marketing experts need to understand so many audience touch points. Buying advertising space is not as simple as it once was. The automated buying process of programmatic advertising is a response to this complexity.

Programmatic Advertising Explained

The first step in understanding programmatic marketing is learning about its definition – what exactly does “programmatic” mean?

To put it simply, programmatic means using automated software or algorithms to make decisions quickly and efficiently.

In digital advertising, programmatic means using technology to deliver ads automatically based on a number of different factors, including but not limited to location, time, and browsing history.

With programmatic marketing, you can reach out to individuals who are already interested in your product or service without having to pay for broad advertisements that may not necessarily be relevant to your target audience, aka in-market audiences. 

Programmatic advertising is a complex sub-section of digital advertising, which is why most programmatic ad spend is transacted by programmatic agencies.

 

What is a programmatic agency?

Since most programmatic is traded by agencies, let’s define what a programmatic agency is. They are normally responsible for the entire programmatic process on behalf of the advertiser. From planning programmatic advertising campaigns to strategy to trafficking and buying ad space, a good programmatic agency will take care of everything for you.

They should have a deep understanding of the different programmatic advertising technology platforms in the programmatic ecosystem so that they can offer you the best advice when it comes to your campaign goals.

Benefits of Programmatic Advertising for Businesses

Targeting potential customers using programmatic advertising is extremely efficient because it uses data to target the right individuals.

When executed correctly, programmatic advertising can lead to higher click-through rates (CTRs) and conversion rates, as well as increased brand awareness.

Programmatic ad buying benefits also include improved efficiency and automation, better creative optimization for performance based on data collection and analysis as well as more transparent reporting.

Who Should Use Programmatic Marketing? 

Programmatic media buying is ideal for advertisers who want to run targeted campaigns and reach their target audience quickly and efficiently.

However, it’s important to note that programmatic marketing is not a one-size-fits-all solution – it requires significant technical know-how in order to be executed properly.

If you’re not familiar with programmatic advertising or don’t have the resources to execute a programmatic campaign yourself, it’s best to leave it to the ad-buying experts. A good programmatic agency will be able to help you take advantage of all the benefits that programmatic advertising has to offer.

What are the main components of programmatic?

The next step in understanding how programmatic advertising works is learning about the main parts that make up this type of digital marketing:

  • A supply-side platform, or (SSP), is a technology platform that allows publishers to sell ad inventory directly to advertisers and agencies.
  • A demand-side platform (DSP) is a form of internet advertising technology that provides bid management systems for marketers to buy advertising inventory programmatically.
  • Ad exchanges are a platform for advertisers and publishers to interact with each other using real-time bidding. An ad exchange is responsible for the mediation of matching bids and requests as well as reporting on delivery statistics.
  • Real-time bidding (RTB) is a real-time auction system. In RTB, the highest bid wins and inventory is sold on an impression-by-impression basis as opposed to being sold in advance or through some other prearranged means of purchase.
  • Data management platforms (DMPs) are used by marketers to collect, organize and activate customer audience data. They allow for the activation of first party data (data that is collected directly from customers), as well as the buying and selling of third-party data.
  • Private exchanges are ad marketplaces made up of advertisers and publishers that operate independently from the open ad market. Using private exchanges, brands can select audiences they wish to reach using their own data.
  • Ad Servers are technology solutions that help to serve ads to web pages, mobile apps, and other digital media. They provide a way for ad agencies and advertisers to manage their advertising campaigns, as well as measure their effectiveness.
  • Programmatic direct enables marketers to buy media from publishers directly using technology.
  • Ad Tags are snippets of code that are placed on web pages that allow marketers to track the number of times an ad is viewed or clicked, as well as other interactions, they are served through an ad server.
  • Header bidding is a process that allows publishers to offer inventory to multiple ad exchanges simultaneously before making a call to their ad server. This improves the chances of getting the highest bid for the inventory.

What is an example of programmatic marketing?

Check out some of our work for many case studies and examples of programmatic ads.

Is Google Ads programmatic?

Programmatic is not just one system. It’s an umbrella term that describes many different types of systems, including but not limited to RTB (real time bidding). Google Ads is not an example of RTB, but it is a programmatic system. The Google Ad exchange is an example of an ad exchange its main competitor is Xandr.

Should I buy from an ad network?

Ad networks are still a big component of programmatic advertising, they group publisher inventory and instead of selling to media agencies directly, they offer their inventory into supply side platforms, which then sell that inventory into the programmatic advertising ecosystem.

What is the difference between programmatic and traditional advertising?

The main difference between programmatic and traditional digital marketing is the use of technology in programmatic to automate human tasks.

How are machine learning and artificial intelligence used in programmatic advertising?

Machine learning and artificial intelligence are used in programmatic advertising to optimize campaigns, target audiences, and personalize ads. They help to automate the decision-making process by making predictions about future events.

For example, they can predict whether or not a user is likely to click on an ad. Machine learning gathers data and “learns” from it, while artificial intelligence applies human-like cognitive functions to that data.

What are the popular programmatic advertising platforms?

Key programmatic technology platforms include:

Google DV360 – A DSP that is a part of the Google Marketing Platform.

Adobe Media Optimizer – A programmatic DSP that is a part of Adobe Advertising Cloud

Xandr – An ad tech company and marketplace that sells and buys ads programmatically on behalf of advertisers and publishers. It

Viant- A digital marketing platform that provides tools to create audiences, build targeted campaigns, use data management platforms (DMPs) to activate first party data.

Each programmatic technology has its advantages and disadvantages. When choosing a programmatic platform, make sure to review all of your options and consider your specific needs. A programmatic agency can help you choose the right technology partner.

What are the Main Formats of Programmatic Advertising

Digital Display Advertising – targeted ads that are delivered across many devices in the form of a banner or rich media ad. It is the prevalent form of programmatic advertising.

The benefits of display advertising are that it has a huge scale, and you can communicate a lot of information in s small space through multiple frames of your ad. Generally, you have up to 15s but make sure your ad is catchy so people notice it.

Video Advertising – ads that are delivered as pre-roll, mid-roll, or post-roll videos. The benefits of video advertising are that this creative format allows you to tell stories and create immersive experiences; it’s great for branding or awareness campaigns.

Native Advertising – a format of digital advertising that matches the form and function of the environment in which it is delivered. Also huge scale, it feels more natural to the user and makes it less likely to get into issues with ad blockers and banner blindness.

Connected TV Advertising – TV ads that are delivered across over-the-top (OTT) platforms, including Roku players and smart TVs. Connected TV has grown in popularity because it has a high reach because people spend so much time watching TV.

Digital Audio Advertising – a type of programmatic advertising that delivers audio ads to users through their phones, computers, or other devices. The ads can be delivered as pre-roll, mid-roll, or post-roll audio ads, or as banner ads that play audio. They are served in apps such as Spotify. Learn about all the benefits of Programmatic Audio Advertising.

Programmatic Digital Out of Home Advertising – a type of programmatic advertising that delivers digital ads to users through physical displays, such as billboards and transit shelters. It is a growing sector because it offers location-based targeting capabilities.

How do you Succeed with Programmatic Advertising?

Programmatic advertising is not a “set it and forget it” solution. In order to succeed with programmatic, you need to continuously optimize your campaigns.

This means regularly testing different targeting options, creatives, and bid strategies to find what works best for your business. You also need to ensure that your data is up-to-date and accurate.

Regularly cleaned and aligned customer data will help you achieve better results with programmatic advertising.

Expert knowledge in the digital advertising space will give you a head start, but even the savviest of digital advertising professionals will need to regularly test new strategies and tactics in order to keep up with changing algorithms, regulation changes, and market trends.

To make programmatic advertising work, you should keep a close on campaign analytics to measure their effectiveness and make changes when needed. Set up real-time dashboards, which will help you take action immediately when needed.

Keep an eye on programmatic ad fraud, which is bad for your business and the industry as a whole. You can protect your business from digital ad fraud by working with an ad fraud vendor who will be able to report fraudulent impressions and prevent you from bidding on potentially high-risk impressions.

Lastly, to keep up with the pace of programmatic advertising, you should have a dedicated team in place who can constantly review campaign performance and make changes quickly according to results or use an agency, like Quora Advertising Agency.

FAQs

What is programmatic advertising in simple words?

Programmatic advertising is the use of technology to automatically deliver advertisements based on a number of different factors, including location, time, and browsing history.

What is direct programmatic advertising?

This is a type of programmatic advertising that allows buyers to purchase ads directly from publishers. It offers more transparency and control over the buying process, but it can also be more expensive than other types of programmatic advertising.

What is an ad exchange?

An ad exchange is a place where buyers and sellers can come together to find each other. It’s a marketplace for advertisers, publishers, and technology companies that work in the programmatic advertising space.

How much does programmatic advertising cost?

Programmatic buying costs will vary depending on the advertiser’s budget. So you can invest as little or as much as you want in a programmatic advertising platform.

What’s next for programmatic advertising?

Programmatic advertising is constantly evolving. The next steps for programmatic include more transparency and better controls for buyers, as well as the development of new technologies that will make the buying process even more efficient.

New formats will emerge, such as out-stream video developed just a few years ago, which will provide new opportunities for advertisers and publishers.

The industry will continue to face challenges from ad fraudsters who are always looking for new ways to exploit the system.

Consumer data and privacy is probably the biggest challenge that the industry will face in the years ahead.

Advertisers and publishers will need to find ways to use data responsibly while also protecting their customers’ privacy. All of these challenges make it an exciting time to be involved in programmatic advertising!

What is programmatic creative?

Programmatic creative is a term that refers to the use of technology to automatically create and serve ads. It can be used for everything from creating simple text-based ads to generating animated videos.

Programmatic creative makes it possible for advertisers to quickly and easily create and test multiple versions of an ad, which helps them find the most effective version faster.

So what exactly is the difference between RTB and programmatic?

Real-time bidding is a type of programmatic advertising that allows buyers to purchase ads through an auction system.

Programmatic is the term used for all types of automated buying, not just RTB.

So programmatic includes both RTB and non-RTB methods like programmatic direct, PMPs or programmatic guaranteed.

Want to learn more about programmatic media buying?

Check out our blog. We have tons of content to help you learn more about programmatic ads.

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