What is programmatic ads and why use it
Jan 07, 2020 - 4 min
Programmatic advertising is online advertising bought and sold automatically.
The process of programmatic ad buying involves the use of software that has come to replace the traditional process of human negotiations and manual orders processing. In the core of programmatic ad buying today, there are machines or algorithms buying ads.
This automation helps to make the whole process of programmatic media buying more transparent and faster, plus it’s great to consolidate all the digital advertising efforts into one technology platform.
How does programmatic ad buying work?
Specifically, the software used for programmatic advertising buying includes DSPs, SSPs, and DMPs.
DSPs (Demand-Side Platforms)
facilitate the process of buying ad inventory on various supply sources (like websites or apps) which are offered at the open market. Plus, DSP it’s where an advertiser can create and manage numerous digital advertising campaigns across mediums and devices.
DMPs (Data Management Platforms)
collect and process a great amount of cookie data based on how users interact with ads. This data, translated into the insights, helps advertisers make more informed decisions about the audience they are trying to reach and their ad campaigns efficiency.
SSPs (Supply-Side Platforms)
are the platforms for the other side of the programmatic media buying process where supply or traffic sources are. Here are direct publishers – owners of websites or apps, ad network owners, and all kinds of intermediaries managing their unsold ad inventory through an SSP.
Why use programmatic advertising?
Here are just several opportunities programmatic advertising offers.
The idea of reaching the audiences with the most relevant ad message at the right moment and within the proper context has been discussed for several years among the ad tech leaders. And today, advertisers and marketers have literally everything they need to do this most efficiently.
There’s hardly any other form of advertising that offers a similar ability to target the right audience like programmatic does. With programmatic ads, you can target any number of different demographics and locations, target users based on their interests, browsing preferences, and so much more.
Programmatic ads allow you to create more effective campaigns with a smaller budget. Better targeting translates to fewer wasted clicks and impressions, which in turn leads to less money spent on serving ads to irrelevant people.
Besides, compared to traditional means of buying ad space, programmatic is considerably cheaper. This is because these ads are what we call ‘remnant inventory,’ meaning publishers are struggling to sell the ads directly. Basically, they’re holding a ton of ad space that nobody’s buying, so they put it up for auction, and typically, prices are much lower as a result.
The ability to track ad campaign performance is another benefit that programmatic provides. Normally, by running ads through a DSP, you can track the number of conversions, as well as the value of each of them.
This is also an essential point for effective ad spend, as, with programmatic, you definitely know what works for you and can make improvements on the go: optimize your targeting, change the ad message or visual, re-target the audience, and so forth.
Transparency and control
Along with figures related to conversions, programmatic also provides marketers and advertisers with knowledge about which supply sources are most and less performing for them.
Specifically, through programmatic advertising, a marketer can see exactly what websites their ads are reaching, the type of potential consumer looking at their ad, and any costs associated with the advertisement in real-time. Based on insights like these, marketers can cut off sources that are not performing and focus on effective ones.
Reporting and analytics are advertiser’s endless source of insights – for future business and marketing decisions. With programmatic, you can track numerous metrics, for instance, users’ behavior and interaction with the ads, ad campaign performance, conversion rate, detailed ad spend, and more.
With getting the analytics in real-time, advertisers can improve and optimize their campaigns on the fly to reach better results and spend their ad budgets with maximum efficiency.
Because software is doing the bulk of the work when it comes to buying and selling programmatic ads, this frees up more time for marketers and business owners. Instead of spending countless hours doing things like negotiating with publishers and filling out forms to buy ad space manually, those hours can be spent poring over the data, strategizing and creating more effective ad campaigns based on highly detailed, accurate information.
This automation also helps advertisers to avoid human error, as software can survey more data than a human being could ever hope to consume. This allows the program to make the absolute best decisions on how to put your ads in front of the right audience.
Is programmatic advertising the future of marketing?
It seems that it’s where the industry keeps going. The budgets spent on programmatic ads are growing, and with the emergence of new ad inventory types, leading us beyond the desktop and smartphone screens, we’ll only see it grow more.
Last year the programmatic market saw some shifts and turbulence, like big brands building out in-house teams to handle their programmatic media buying internally and at the same time more agencies ready to embrace programmatic.
What’s expecting us is more synthesis of ads sold programmatically and “traditional” media, including TV spots and out-of-home ads.
Want to learn more about programmatic advertising?
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