What is programmatic advertising?
Programmatic advertising is the use of automated technology for media buying or the process of purchasing advertising space. Data insights and algorithms are used in programmatic media buying to show ads to the right user at the right moment and at the right price.
How does it work?
Programmatic advertising has a lot of moving parts, with different tools and services you can use depending on your individual needs. The basic foundation of a programmatic advertising ecosystem is made up of four primary components.
* A demand-side platform (DSP) allows advertisers to automatically buy digital ad space from media publishers via ad exchanges. Buyers can also target audiences based on information like website category, physical location, age, online behaviour, and more.
* A supply-side platform (SSP) can link to various ad exchanges in order to increase a publisher’s exposure to potential purchasers. A publisher can also better control ad space inventory by using an SSP.
* data management platforms (DMP), is used by advertisers and publishers, to improve targeting, create reports, and build lookalike audiences. It serves as a centralized data warehouse for gathering, managing, and analyzing information from many sources.
* an ad exchange, much like the trading floor of the stock market, is where DSPs and SSPs meet to agree on a price and trade inventory.
One of the best examples of this advertising comes from:
Google: Google adopted programmatic marketing when promoting its Google search app, in the hopes of making its ad campaigns more effective. The company wanted to improve its digital advertising results, and programmatic advertising provided the answer.
Google built their ad targeting using first- and third-party data, which allowed the corporation to focus on the most valued audience members. It also took advantage of the real-time campaign optimization option, recycling campaign data to strengthen its strategy.
For Google, programmatic advertising was a success, resulting in the following wins:
* 50% increase in brand awareness
* 30% more people reached three times more frequently
* 30% lower cost – per – thousand impressions (CPM) compared to the previous year
So, is it worth it?
Programmatic advertising provides a host of benefits, including:
* Multi-channel and format reach- it supports a variety of ad exchanges and networks, giving marketers unparalleled access to display advertisements, video, mobile, native and social media, voice, digital out-of-home, and even television.
* Relevancy – sophisticated targeting capabilities are available. Advertisers can use interest targeting and lookalike modelling, for example, to make their ads more relevant to specific target populations at scale.
* Real-time data insights- Each ad’s performance is tracked in real-time. Advertisers can respond to shifting market conditions and undertake tests to optimize live ads as a result of this
Programmatic advertising can be a very effective way to save time and money. Brands value the capacity to automate media buying and customize ad distribution to viewers. Ad budgets can typically be stretched further with programmatic buying than with traditional methods. There’s a reason it currently accounts for over 93% of all display advertising spending in the United Kingdom.