Programmatic ads delivery is an automated or algorithmic system for buying and selling advertising space on the internet. That means, that artificial intelligence purchases targeted actions by determining their values at a real-time auction.
What is it?
Programmatic advertising is a format for real-time and automated purchasing of accurately targeted advertising through a service with a large number of publishers.
Are the programmatic and contextual ads the same?
The context works in the middle or even on top of the funnel. It means that the user already has a specific need. In this case, we use the keywords for targeting, which are formed by the audience’s need for some product or service.
Programmatic buying is a more advanced format. This means, that the technology allows you to personalize the advertising message as much as possible, and show it automatically while the user reads his favorite resource. Therefore, it has many targeting possibilities: gender, age, interests, income, etc. As a result, ads are more relevant to the user.
Programmatic advertising works on the top of the funnel. In other words, it shapes the need and leads the customer to a purchasing decision. But it can also use retargeting or context.
What formats can I use?
You can buy banners, video, native or audio ads, dynamic remarketing. Ads are displayed both on mobile and desktop.
Programmatic ecosystem elements
The programmatic ecosystem stays on the synergy of different platforms and services. Above all, it regulates the interaction and service quality on both sides.
The goal of programmatic is to provide fully automated advertisements for buying and selling.
An advantage for each part is that you do not work directly with the publisher or advertiser, but work through a service, where a robot sells or buys it instead of you.
Demand-side platforms (DSP) are used by advertisers to access open or private programmatic inventory to distribute targeted online ads. Moreover, to allow advertisers to reach a specific audience, DSPs usually integrate with a wide range of data management platforms (DMP). They do it for first-party audience data targeting as well as different data providers, data vendors, or data aggregators for third-party audience data targeting (source).
A supply-side platform (SSP) is an advertising technology (AdTech) platform used by publishers to manage, sell and optimize available inventory (aka ad space) on their websites and mobile apps in an automated and efficient way (source).
As a result, brands can display their advertising messages on the desired websites at a favorable price to a specific audience.
How does it work?
Step 1. A user visits a website connected to an advertising network.
Step 2. Cookies identified their age, demographic category ABC, interests. For example, it is a 40-year-old woman who likes computer games and sports (surfing). In addition, she is married and has a child.
Step 3. The network transmits data about this user to the buyer platform.
Step 4. The buyer platform selects ads that are the best to show to this particular user.
Step 5. The real-time auction starts.
The auction works in this way: we have a few advertisers who want to buy the possibility to show the information:
- Women clothes seller
- Computer games manufacturer
- A travel agency that has trips to the ocean with the best surfing places
- A restaurant that sells special dinners for two
- Children toys manufacturer
In short, these things take place in a fraction of a second, and the best offer wins the auction. That’s all.
How to start?
Firstly, start with a strategy. Determine the goals of a future advertising campaign and choose the right tools.
Secondly, explore your target audience, segment it, perform an initial needs analysis.
Finally, select a platform and determine KPIs. You can use standard performance metrics: CTR, CPA, COS, ROI, etc.
How to choose DMP?
When choosing DMP, we buy a black box because its algorithms are implicit. To go for the best suitable platform for your business, pay attention to:
- audience reach
- targeting options
- ad visibility
- experience on the local market
- the appearance of the local technical support
- access to local 3rd party data
- a term that a contract has to be signed
Remember to ask all the questions before buying the platform, because most of them have at least a 3-month agreement. So you will not be able to refuse instantly.
A significant advantage of the programmatic model is that it can give you a competitive edge over other companies in your industry. What are the other benefits of using it?
- Direct access to the ad network
- Billing only for real impressions
- Many options for deep targeting
- Ads are distributed only to interested visitors
- Very flexible bidding system
- Amount of publishers
- The ability to purchase ad places at different websites within the same campaign
- The possibility to exclude unreliable websites that have negative reviews
- Using a single interface: you can run an advertising campaign, configure the desired targeting, and get the final reporting – all in one window.
Besides it has a lot of strengths, obviously, there are few disadvantages behind them.
It is very difficult to create a perfect platform of ads trading that can be used by all the branches. What are the challenges of using programmatic ads?
- You have to understand how the platform works.
- You have to create a portrait of the target audience.
- A good result is possible to get only after repeated testing.
- Not all advertising programmatic services are available to small businesses.
Sounds interesting? Try it by your own.
Traditional model versus programmatic: who wins?
In conclusion, programmatic models are an alternative to traditional ways of buying ads. Advertisers and publishers see more and more advantages of trading through the platform.
Launch the experiments and conduct successful advertising campaigns.
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