Programmatic Advertising explained

In the modern era, marketing and advertising have changed a lot. With the rise of Internet marketing as well as other technological improvements, more and more advertising is becoming digital.

What is programmatic advertising?

It is the use of software to purchase digital advertising, which means partial automation of the process of buying ads. Before programmatic advertising was developed, the traditional advertising method included human negotiation, requests for proposals, quotes, algorithms and a lot of other ways to purchase display space.

With programmatic advertising, the ad buying system has become more efficient, and human salespeople and ad buyers (who can be unreliable and expensive) don’t have to waste their time buying ad space.

By removing humans from some parts of the advertising process, it becomes more efficient and therefore cheaper. Humans are prone to errors, illnesses, tiredness, or simply having a bad day at work – and machines are not.

Of course, that doesn’t mean that the human factor is completely removed from the advertising business and that the advertising world will be overrun by robots. It simply means that the people who are doing that job will be able to optimize, better target and plan their advertising and that they will be able to spend more time on planning customized and creative advertising campaigns instead of wasting their time on menial tasks. You will still need an educated and creative team which will help bring your advertising campaign to life.

This system is popular because it works – and it works because it is an efficient use of both resources and time.

Now that we’ve clarified what programmatic advertising really is, we should talk about why your business needs programmatic advertising and how you can reap its benefits.

Determining goals

Setting objectives and determining goals is the first and crucial step in any marketing campaign. First, determine if the programmatic advertising campaign is something that you really need. This way of advertising opens a million of new worlds to you because you can select your target audience by things like their purchasing preferences or viewing habits, what kind of food and drink they like, whether they travel a lot, or in any way you need. If that is something your business is missing, you should definitely consider programmatic advertising. On the other hand, if you feel that you are reaching your target audience with your regular advertising campaigns and are considering programmatic advertising only because your competition uses it, you should reconsider.

Laser-targeting

The most attractive feature of programmatic advertising is that you can laser-target your audience. Highly-targeted ads are created automatically for thousands of users by analyzing your website and matching cookies and subscriber data to create an audience. If you compare programmatic advertising with other approaches to targeting – you’ll notice that it is undoubtedly the best when it comes to targeting.

Multichannel

By implementing programmatic advertising, you get access to an enormous inventory of publishers, ad exchanges and networks, as well as a possibility to run your ads in several formats. You will be able to advertise on desktop, tablets, mobile, mobile apps, in videos – basically anywhere you want. The options are endless.

Reporting

Artificial intelligence and high targeting that programmatic advertising implements mean that the reports and insights on your campaigns, target market, ads or buying patterns are a precise and individual analysis of each of your customers.

Now that we’ve explained what the primary benefits of programmatic advertising are, it’s time to explain how this method works. Experts from a digital marketing agency War Room Inc. advise on a couple of steps we should implement when creating programmatic advertising strategies:

DSP

DSP stands for Demand Side Platform, and it is the “place” where the ads are ultimately purchased. It gives you access to advertisers and allows you to set bids. It is an essential part of your programmatic advertising campaign. Depending on the server you are partnered with, a lot of services are managed, for example:  applying of targeting capabilities, receiving real-time progress reports, budget management and others.

Ad Exchange

An ad exchange is something like a digital marketplace where you can buy ad space on websites, streaming services, apps, or any other medium. It will take the data entered in the DSP and ask us if we’re interested in buying advertising space. Price will be determined by real-time bidding.

DMP

DMP is short for a Data Management Platform, and it’s something that is essential for collecting data. Every single person your advertisement reaches will be detected by DMP, and that data will be compiled and analyzed so you can study your audience. This will ensure that the right type of audience is being reached.

Programmatic advertising has definitely been on the rise in the last few years, and it can be said with certainty that it’s the future of ad buying. At the moment, this type of advertising is based only online, but media agencies are exploring ways to sell regular or more traditional media this way.

Even though programmatic advertising has a lot of benefits, you should keep in mind that there is no advertising method that is flawless or perfect, and that its main disadvantage is its initial high cost. However, the ROI speaks for itself – it is significant and ultimately this initial cost pays off.

 

Just like in other methods of advertising, it is important for you to know your marketplace and set precise goals because they can significantly affect your programmatic advertising campaign.

 

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