The Future of Digital Ads - Programmatic Advertising
What is programmatic advertising?
Simply put, programmatic advertising is the use of software to buy digital advertising.
It uses a sophisticated algorithmic software to automatically buy and sell online display space – in a fraction of a second. It also incorporates traffic data and online targeting methods to serve impressions more accurately, efficiently, and at scale.
How does it work?
Website owners (publishers) have space on their site to sell, and advertisers have money to buy ad space to promote their brand or business.
To understand how programmatic advertising works, it is necessary to discuss "SSP" and "DSP", first.
Together, SSP and DSP work as critical components to complete programmatic advertising. Another feature factored into this process is "DMT", or a data management platform. This platform takes a variety of factors into account, such as location, demographics, user behavior, and online activity, and is used to make sure DSP selects the ads that targets the right audience.
This automated ad exchange process happens in an instant, but can be explained in 6 simple steps:
Businesses that use programmatic advertising:
Google wanted to get better results from its digital advertising and found a solution with programmatic advertising. To promote its Google Search App, the company implemented programmatic advertising to increase awareness by 50% and audience reach by 30%. By using first- and third-party data to build its ad targeting, Google was able to focus on the most valuable audience members and apply this information to their programmatic advertising efforts.
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By experimenting early, Google was able to adopt this new and growing advertising technique to optimize its future digital campaigns.
Turner Sports
Turner Sports oversees sports broadcasts on channels like TNT and TBS and used programmatic advertising as a chance to drive engagement, increase awareness, and enhance the community of sports fans for the upcoming 2016 NBA season.
Turner Sports approached its goal with a programmatic video advertising campaign that reached six million unique viewers in the U.S. By using audience data from previous ad campaigns to build its initial audience, they investigated more to find the most valuable segments and members. Using this, they then bid to place their ads in front of an audience who would find their ads the most relevant, and in the end successfully increased their viewers.
Challenges and opportunities for programmatic advertisers in 2021:
Challenges-
One of the biggest challenges of programmatic advertising is that the landscape is littered with bots, abusive vendors, and other types of non-human traffic sources. This has been a rising issue for businesses that base on Return On Investment (ROI) since it's easy to fake views and impressions with the multitude of bots online.
To fight this, it is important for programmatic advertising partners to implement verification vendors to help weed out bot responses, so ROI's are more accurate and easier to replicate.
Opportunities-
A huge advantage to programmatic advertising is its ability for personalization. Because advertisers buy impressions individually (not grouped by thousands or millions), each ad marketplace allows an advertiser to serve one specific ad to one single consumer in one single context. This gives marketers the ability to reach different customers with different creative messaging across media channels and partners.
Along with this, programmatic advertising software can identify what resonates with individuals to optimize the timing, relevance, and effectiveness of the ads they see. Investing in programmatic advertising is key for businesses to see efficient and impactful results in a cost-effective way.
Programmatic advertising is the future of online advertising for digital marketers, and will only continue to grow!