If your business uses online marketing or digital marketing then you probably have heard about “programmatic advertising” and we are very sure you might have asked a question to yourself what is programmatic advertising?

Programmatic advertising is the future of digital marketing. We all know that digital marketing has already been in the trend but what’s catching the eyes of the people is programmatic Advertising. This is important to understand is it only catching your eye or you are using it in your digital marketing strategy. However, many marketers are turning to programmatic advertising to boost their digital efforts, better ROI on ad spend etc.

If you’re incorporating programmatic advertising in your marketing then it is good for your business growth, but if you’re not doing so then maybe you’re unaware of it, else you’re ignorant of its benefits. 

• What is Programmatic Advertising?
• Is Programmatic Advertising the Future?
• Is Programmatic Advertising Effective?
• What are the Top 10 Benefits of Programmatic Advertising?
• Which Platform is Best for Advertising?
• Is Google Ads Programmatic?
• How do I use Programmatic Advertising?
• What Are The Pros And Cons of Programmatic Advertising?
• What is The Impact of Programmatic Advertising to Customers?
• Disadvantages of Programmatic Advertising
• 10 Benefits of Programmatic Marketing Approach
• Challenges of Programmatic Marketing
• Why Programmatic Advertising
• Types of Programmatic Advertising
• The Rise of Programmatic Advertising
• Why Work in Programmatic Advertising?
• Why is Programmatic Advertising Important?
• What is Programmatic Buying?

What is Programmatic Advertising?

Programmatic advertising typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically.

Read Also: What Does CPM Stand for in Advertising?

Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, who can be expensive and unreliable. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. Humans get sick, need to sleep and come to work hungover. Machines do not.

Is Programmatic Advertising the Future?

Probably, yes. It’s impossible to tell what portion of advertising is now traded programmatically, but it’s definitely on the rise. Some agencies now say they’re eager to buy as much media as possible through programmatic channels, and some major brands have even built out in-house teams to handle their programmatic ad buying as they spend more of their marketing budgets that way.

At the moment, it’s mainly online ads that are traded programmatically, but increasingly media companies and agencies are exploring ways to sell “traditional” media this way, including TV spots and out-of-home ads.

Is Programmatic Advertising Effective?

Programmatic is the future of advertising, particularly in display advertising. As marketers, we always seem to be chasing the next big tactic, competitive edge and a way to influence customers at a cheaper cost. Programmatic advertising is evolving to be the most effective way to tick all these boxes on the marketer’s wise list.

By utilizing programmatic, advertisers can easily scale, consolidate and optimize how they target, influence and convert potential customers and clients. While display and video have been the primary mediums utilizing the programmatic process, it is slowly expanding to the realms of the media landscape:

• Audio: Spotify, Pandora, Internet Radio
• TV: Multiple cable networks are automating and providing access to their inventory via Supply Side Platforms or Demand Side Platforms
• Billboards: ClearChannel have been working on a nationwide network of Programmatic billboards being able to be bought in real time
• Direct Mail: Companies like PebblePost are allowing advertisers to remarket to customers via mail based on their activities online

While we here at Hanapin are advocates for the advancement of advertising technology and the continued performance of campaigns, we realize that programmatic does not work for everybody, 100% of the time.

Let us now discus when and when not to use programmatic advertising to make it more effective.

When Not to use it:

You don’t have a significant budget

Despite the advancements of programmatic, and the removal of the high barriers to entry, programmatic takes an investment of enough budget and time to gain insights, testing and optimizations to find optimum audiences, creative messaging and strategies.

This is particularly more important if you are allowing your programmatic vendor’s algorithmic technology to drive performance. Machine learning is becoming a much bigger part of the programmatic realm and like anything, it needs the patience to be allowed to gather data and learn the right path to reach the correct audience.

You don’t value view-through conversions

View through conversions are a contentious issue amongst marketers. Do they count, do they not, can we give some credit to them? In reality, significant amount of conversions from display campaigns come in the form of view through conversions. If you are unable to report against these, either 100% or in some form of modified attribution, you will struggle to show direct benefits of programmatic.

Programmatic provides advertisers access to highly targeted data sets to hone in on their desired customers in less time and create a full funnel strategy allowing advertisers to provide 1:1 messaging to users at the right time in their buying cycle. Each line item will not convert immediately, or at all, but will help fill the funnel with a higher quality visitor which, in turn, should convert at a higher rate at the bottom of the funnel.

You have not experimented with Display before

Programmatic is great, but insights are needed to help you shape your strategy and initial test, whether that be broader audiences, creative, geos etc. Using GDN is a good solution for initial budget tests as you enter into Display and will provide you with a lot of solid data to base your future efforts on.

Programmatic is not a magic answer to all your advertising problems. It takes time to craft a strategy. Once you have planted a seed for your strategy, you can use programmatic to cultivate, grow and refine a 1:1 messaging strategy that will resonate with your ideal customer.

Making the leap into the realm of programmatic is a big step, for any company. The GDN provides a solid solution for many advertisers, but there are many reasons why programmatic has grown so rapidly over the last few years. So how do you know that you are ready for programmatic?

When To Use it:

You have plateaued in the GDN

This is a pretty common situation for most advertisers. You’ve optimized and optimized, tested multiple audiences that google provides and reached as much of the inventory available.

Programmatic changes the way advertisers can reach potential customers. Not only can you access the GDN via most Demand Side Platforms, but you have access to 80+ additional inventory sources that may provide placements that previously were unreachable, and are engaging users in an environment that may be more suitable to driving a conversion.

Demand Side Platforms (the ad buying environment) are often built on sophisticated technologies and algorithms that automate how and why your ads are bought. This, over time, with some manual hand-holding and monitoring will help reduce workload and improve performance.

Programmatic also provides greater opportunities to access premium inventory that may have been too expensive to access with direct buys, or too small to scale with placement targeting in GDN. Through the utilization of Private Marketplaces and Guaranteed Deals, advertisers can utilize their vendors buying power to access consistent front page billboard size (970×250) ads on placements such as The NYT, Forbes, Business Insider, etc.

Got data? Use it…

Big Data… It’s been a phrase that has been thrown around over the last few years. We all have it – CRM Data, Customer behavior profiles, conversion audiences, remarketing lists, purchased email lists, etc. But can you use it effectively? Adwords allows you to match your email lists to your search campaigns, but not your display campaigns. Strange but… still strange. The capabilities exist, but it is still stuck behind a walled garden.

Most Demand Side Platforms allow you to incorporate your first party data into the platform. From here, you can utilize this to create highly targeted retention and existing customer growth campaigns. This can also provide you with an opportunity to utilize purchased email lists within your display strategy, in an effort to move potential cold prospects through the funnel.

These data sets contain valuable information about customers you already know. They are the foundation of your ideal audience person. Similar to Facebook, most programmatic vendors allow you to create Lookalike audiences that match the profiles of your existing audience.

You have a wide scope of products… Personalization… it’s the key to success

Over time, the focus of advertising has shifted, methods have blended, and strategies evolved. No longer are we marketing just B2B or B2C, but H2H – Human to Human. At the end of the day, decisions makers in both the household and the boardroom are just like us. Normal people. They need to be attracted, nurtured and convinced.

Like all of us, they are bombarded with ads every second of their daily lives, no matter what their environment. So how do you cut through the noise? Annoying full page takeovers, multiple attempts at viral content, influencer marketing? Yea, those tactics can work and provide some value. Customers have multiple options, no matter what they are looking for. Brand loyalty is dead. They want convenience and things to be made easy for them.

Programmatic provides multiple opportunities for advertisers to provide a specific message to users at the right time based on their audience behavior signals. Specific campaigns can speak to the different audience groups.

By utilizing 3rd party, lookalike and remarketing audience targeting, you can shape a funnel and deliver a subtle prompt for the user to take action and move down the funnel. But all these different strategies require multiple creatives with common elements, but the need for different messaging.

Yes, this has kind of been available in Adwords in the form of their dynamic product ads for e-commerce companies. But let’s be honest, they struggle to hold the brand integrity.

As the industry has become more educated, brand safety and brand identity has become as important as ever. Brand messaging and recall helps separate you from your competitors. Programmatic allows advertisers, other than ecommerce-specific industries, to utilize multiple data and behavior signals to swap out certain elements of seemingly regular ads that speak directly to the viewer, without devaluing the brand.

There is no doubt that most of the ways we buy media today will evolve to a programmatic framework. However, in the short term, there are still a multitude of options for advertisers to utilize before they may be ready to take that next step. Programmatic is a truly valuable option, but make sure that it makes sense for you and your business.

What are the Top 10 Benefits of Programmatic Advertising?

Many leading brands have jumped on board and are experimenting with this very targeted, versatile approach. If it is not already obvious to you, here are the top benefits that early adopters to the programmatic model have been experiencing to date.

1. Better Return on Investment

With programmatic advertising, you don’t spend money on those who won’t even give a second glance to it. The cost-effective process or robust targeting allows you to create a more effective campaign with less budget. Unlike traditional advertisement, programmatic advertising is cheaper and yields high ROI.

2. Upgrade Targeting Strategies

It has the ability to target the audience. You can choose a time and the day when your ads are to be seen and get specified as you want. You can target your audience based on their interest, preferences, browsing behavior, and locations.

3. Advanced Tracking Ability

The advanced tracking abilities of programmatic advertising allows you to see not only the number of conversions but also the category and value of each individual conversion. Here the conversion is secured from those who have viewed and clicked on your ads. Before coming of programmatic advertising, having this type of data was a dream of marketers which now have fulfilled.

4. Automation

Automation in digital marketing helps you to avoid any kind of error which humans tend to do. Now you no need to spend endless hours to negotiate with publishers or filling out forms to buy ad space manually. You can use those hours in data search, strategizing, and creating more effective ad campaigns. It will help you know how you can put your ads in front of the audience.

5. Reduction in Ad Fraud

A good programmatic advertising platform gives marketers an opportunity to keep complete control of the publishers they want to use to target audience. According to recent research, 9% of display ads and 22% of video spending were wasted on bots. Some significant proportion of your display advertising spending is lost to invalid traffic that contains dots and other fraudulent means. 

6. More User-Friendly

Your audience wants to see more engaging and eye-catching ads that fulfill their needs and wants. Making more personalized ads will help you grasp the eye of your audience and their attention. And this is the only aim of every marketer to make their ads more appealing.

7. Valuable Insights

This term of advertising gives you valuable insights about your marketing campaigns to improve their performance. You will be amazed to know that programmatic takes more than enough data for a thorough examination. These insights will help you know the performance of your overall digital marketing.

8. Real-Time Management

Programmatic advertising allows you to check and manage the campaign’s development in real-time via one dashboard. It also helps you to adjust bids and targeting as needed. You need to keep your marketing efforts in the right direction to stay on the top of results by improving performances.

9. Access to more supply and demand

Publishers publishing the programmatic ads are capable of easily reaching the buyers or customers and increasing their fill rates. This helps digital marketers to expend their products or services in the market as per the demands of their customers.  

 10. High efficiency

When you use programmatic in your digital marketing then it is the only platform that offers you high-quality leads. With the help of this you can save your time and efforts. It brings enhanced outcomes for your marketing business. That’s why programmatic is the only platform where you can have maximum efficiency in your work.

Programmatic advertising is the need of every digital marketer in their marketing business. It is a vast trend with advanced technology that permits automated selling and buying of impressions. The top 10 reasons listed above as to why digital marketing needs programmatic advertising makes it great and valuable. So you can boost your digital marketing efforts if you implement programmatic advertising into your business.

Which Platform is Best for Advertising?

With people spending over 5 hours per day on their smartphones, delivering ads via mobile ad platforms is a huge opportunity for companies to market their brand. But what type of ads can you deliver?

There are numerous ad types, but the most popular ones include:

• Google search ads
• Facebook ads
• Instagram ads
• Mobile in-app ads

All of these ads can be delivered by using a mobile ad platform, sometimes referred to as a mobile ad network. Two of the most obvious choices include Google Ads or Facebook.

A mobile ad platform works like a broker between publishers and advertisers who are looking for advertising real estate on popular apps.

1. Google Ads

With Google ads, ads can show on both desktop and mobile devices. When using display ads, you can use a device targeting to target the only smartphone and/or tablet users. On this platform, you can publish ads within apps, browsers, and Google search results.

Here are the types of ads you can use on smartphones and tablets:

• Text and image ads
• Image and video app promotion ads
• True View ads for app promotion campaigns
  The key differentiator for Google Ads is its access to the most popular search engine, which gives advertisers the opportunity to put their ads in front of the largest audience on the planet.

2. Facebook/Instagram Ads

Due to its large user base, the social media giant launched Audience Network, an easy-to-use ad platform.

Facebook is well-known for its many advertising targeting options, and now they’ve given advertisers the option to choose from the following ad types:

• Native ads
• Interstitial ads (full-screen ads)
• Banner ads
• In-stream video ads
• Rewarded video ads

Instagram is another good option for advertisers since it’s a mobile-first platform created with the mobile audience in mind. Both Facebook and Instagram ads are managed via Facebook’s ad platform.

3. Bing Ads

While Bing may have a smaller market share than Google, your advertising budget could spread farther on the 2nd place search engine. On average, you will pay 70% less for Bing Ads than Google. On a search engine that receives 5 billion searches every month, that is a tremendous value.

Lower costs aren’t the only advantage of using their Bing’s mobile ad platform, though. With Bing Ads, you have more control over the language, location, and scheduling of your campaign (as these can be set on the ad group level vs. the campaign level in Google). You can use the Social Extensions app to drive traffic to your social media accounts:

Bing has also developed some valuable partnerships over the years. For example, if you want to target Kindle users, you should know that Bing is the default search engine for Kindle Fire devices.

4. AdMob

Since being acquired by Google in November 2009, AdMob has become one of the most popular mobile ad platforms. The platform is beneficial for companies aiming to monetize by showing ads in their mobile app.

AdMob allows users to decide what types of ads they want to show and to set filters, so only relevant ads are shown.

Within the ad network, four types of ads are available:

• Banner ads
• Video ads
• Native ads
• Full page interstitials ads (an ad that popup to cover a user’s entire mobile screen)

Advertisers that want to take advantage of these in-app placements can use Google Ads to show up in AdMob ad locations.

5. AdColony

AdColony is a popular mobile video ad network used successfully by companies such as Hilton Hotels, Adidas, and Farmville.

With AdColony, publishers can show video ads during in-app usage. As an example, the platform is popular with mobile game developers to show a video ad after the user has completed a task or achieved a certain level.

The platform can be used to target by:

• Platform (Android or IOS)
• Device (iPad, iPhone, Android Tablet, etc.)
• Connection type (4G or Wifi)
• Geography (Region, Country, City, etc.)
• Demographics
• Content (entertainment, games, etc.)

6. TubeMogul

TubeMogul (powered by Adobe) is a demand-side, mobile ad serving platform that started the non-human traffic credit program in 2016, concerned that their clients might be flooded with non-human traffic. In short, this program uses a sensor to detect fraudulent traffic (e.g. visits from bots). As a DSP, this means that it aggregates data and publishers from a large number of sources.

Rest assured that when you advertise with TubeMogul, your ads will be seen and clicked by real people.

7. Airpush

Airpush is the second largest mobile ad platform for Android, yet advertising through IOS is also available.

The platform features 12 different ad formats, some of which include:

• Push notifications
• Video ads
• Overlay ads
• Rich media ads (an ad that offers an interactive experience)
• post-click landing page ads
• In-app banners

Regardless of the ad type available, the best mobile ad platforms have the following common traits:

• Large inventory of possible ad placements
• Advanced analytics and targeting
• Access to a global market
• Mobile support on all of the big operating systems

As an advertiser, a large inventory is a necessity. This allows you to chose the ad placements (e.g. search ads, display ads, in-app ads, etc.) that make sense for your business.

Another must-have feature is analytics and targeting. Without having a clear idea of who sees your ad and which ads perform best, mobile ads are a waste of time and money. Key metrics include CPC or CPM, the total number of conversions, and CTR.

Is Google Ads Programmatic?

Google AdWords was primarily built around search, keywords, and text ads. While, Programmatic advertising are built around display ads.

Here are their advantages:

Reach Potential.

Google AdWords are limited to Google. Programmatic Ads provide advertisers access into the vendor-neutral RTB (Real Time Bidding) ecosystem.

Programmatic Ads can reach 98% of the internet, including the Google platform allowing for 15 billion impressions and counting. Programmatic Ads can show display ads across media devices (smartphone, laptop/desktop, tablet).

Real Time Reporting of Data

Google Adwords can typically allow advertisers to check statistics every 2 to 3 hours. While Other metrics are only updated once a day. Programmatic Ads allows for real-time bidding & allows for up to the minute stats. This provides a huge advantage when testing and monitoring the effectiveness of your ads.

Targeting Options

While Google Adwords and Programmatic Ads share many of the same targeting and re-targeting features, Programmatic Ads use of cookies gives it’s targeting almost a limitless scope. Demographics, Behavioral Data, and Psychological Data are only the beginning. Programmatic Ads even have precise targeting on mobile devices manufacturer, operating system, mobile carrier even headset.

Pricing Options

Google Adwords control the platform and therefore optimizes revenue with cost per click and cost per action. Smart marketers are allowing Google to optimize their campaign for the best performing ads then moving them over to Programmatic Ads to get the most effective campaign possible.

Accessibility

Let’s declare this a tie. However, with better reach, more targeting options, real-time marketing data and better pricing options, Programmatic Advertising is proven that advertising is evolving past the simple text ad and that Display and Video ads are on the rise.

How do I use Programmatic Advertising?

Now that we’ve established the virtues of programmatic advertising in this article, let’s explore how you can use it to your marketing advantage.

1. Know your marketplace

The first initiative is pretty simple: get to terms with what you’re doing. As a person venturing into a new area of advertising, you will be faced with a number of new ideas and terms, take the time to get to know them.

Unruly has a comprehensive list of programmatic ad terminology that will empower you to tell your SSP from your DSP—a reference that you can use at any stage of your journey.

2. Set your goals

As with pursuit in digital marketing, it’s important to have your goals set from the get-go. To do so, you should use existing data to determine what type of advertising awareness you need and set a fitting strategy. This will allow you determine short- and long-term goals.

Don’t feel the need to jump to programmatic advertising unless you know why you are doing it.

3. The human touch

Just because programmatic advertising relies on algorithms and machines, that doesn’t mean that it doesn’t need human investment. There are different types of platforms, some of which offer fully or half-managed services. Others simply provide technical platforms, allowing you to run your programmatic buying activities on your own.

From there, you will need to allocate skilled people to plan, control, and optimize your buying. The point here is that, to enjoy optimum success, you will need to find the perfect coupling between technological automation and intelligent human intervention; so, don’t rely on the algorithm alone to yield the best results for your campaign.

4. Protect the brand

As discussed, one challenge of programmatic is that its reliance on algorithms can lead to ads appearing in the wrong place.

To avoid this, you must ensure that your demand-side blacklist is constantly updated and monitored for inappropriate sites. Some platforms allow for the exclusion of entire categories from ad spends, which can be particularly helpful.

Another option, which is important if your product is sensitive, is to use a whitelist. This will give a list of approved (rather than denied) sites. It will narrow your ability to reach your audience and possibly make it more expensive but will ensure no unsavory material is associated with your ad.

If using an agency, ensure that they are doing all they can to exclude low quality and sensitive sites from having your ads served on them.

5. Watch for fraud

Typically, programmatic ads are viewable between 44% and 55%, but Mediative estimates bot fraud will could cost digital advertisers $6.5 billion each year.

However, programmatic ads have an industry-wide standard of 16% fraud, which is lower than other display ads. While the inherent threat of fraud is lower in programmatic advertising, it’s still something that you should monitor during all of your campaigns and initiatives.

What Are The Pros And Cons of Programmatic Advertising?

Pros

1. Highly Efficient

Before the days of programmatic ad buys, online spots were bought by humans. They would sit at their desk and call up other humans, and bargain and trade money for ad spots. 

This was slow, and unreliable. Nowadays, algorithms do this for them. 

It’s like that story where a man spent two weeks creating a program that turned his 40-hour week into a single click of a program – and he spent the rest of his 39 hours doing something else. 

Programmatic advertising is incredibly efficient.

2. Fast-Developing Technology

Every day, the industry changes. It’s getting better, faster and smarter.

From the overall structure of ad buys, to how specific targeting can get, to minimizing cost, and finding a better way of communicating with the right audience – programmatic media gets you there in a tenth of the time.

Programmatic ads deliver striking results. There is no comparison to traditional advertising anymore, which is why most of the industry invests in programmatic buying at this point in time.

How does the saying go? You can’t win the game if you don’t know the rules.

Using this form of automated ad buying gives you the chance to find your winning formula, and to grow as the technology develops.

3. Outstanding Return on Investment (ROI)

When the hard bits are automated, machines can keep chugging along until your goals are met or your budget runs out. 

Either way, you save time, maximize your ad spend and get a much higher return on your investment when you use programmatic ad buying.

Cons

1. Lack of Human Control

One of the obvious concerns of ad automation lies with the human element of the process.

That’s why different ad agencies produce different results. It takes highly skilled, highly trained programmatic ad professionals to launch, manage and execute successful campaigns.

If an agency has bad practices, or inexperienced staff – there could be a host of issues for the advertiser. Ads appearing on low-quality inventory, wasted viewability – or worse – a campaign that succeeds, but doesn’t do it to its highest potential.

How would an advertiser know that their money is being wisely spent then?

2. Online Traffic Fraud

When advertisers pay for views, the general consensus among business parties is that these views should be real views.

But many of these views come from bots, and bots aren’t real at all.

Some companies create bots that watch videos over and over again. Then, they say, “Hey! Your video got 3000 views. That’s $100.00!”

The problem here is that you aren’t paying for empty views, you’re paying to influence real consumers. Bots don’t buy things.

Thankfully, most respectable companies have ways around this these days.

3. Inappropriate Ad Matching

A risk of paying for low quality inventory is that sometimes your ad ends up being next to content, or on a website, you don’t want your brand anywhere near.

For example, flight commercials on a news page about an airplane crash are in bad taste and wouldn’t get any conversions.

Similar to the online fraud situation, most companies offer something called Brand Safety that helps prevent things like this.

What is The Impact of Programmatic Advertising to Customers?

Modern advertising has changed so drastically that Don might find himself considerably out of date. Today’s advertising is more scientific and quantitative than ever before, and requires deep understanding of publisher metrics, customer behavior, and computer science.

A large part of this is due to programmatic advertising, which has revolutionized the way marketers reach audiences through targeted digital ad placement.

Due to its real-time bidding structure, the programmatic approach is best suited for online advertisements. In 2017, global programmatic advertising spending totaled approximately $80 Billion – representing 45% of all online advertising, and 14% of all advertising. The sector is also expected to grow rapidly.

TechNavio, a market research firm, estimates that programmatic advertising will grow at a CAGR of 21% from 2017 to 2022, and come to represent $210 Billion, 29% of global ad spending. It is clear the industry’s shift to programmatic advertising is significant and will continue into the future.

Programmatic advertising creates value for marketers by allowing them to target advertisements for maximum impact. For example, a company advertising de-icing salt might focus their ads on users who live in areas experiencing cold weather. By focusing advertising on their target consumers marketers can increase their return on investment. They also save valuable time.

Programmatic advertising also creates value for publishers by ensuring that their inventory (i.e., ad space) is maximally utilized. Through the real-time bidding mechanism programmatic advertising ensures that inventory is most efficiently allocated to the highest bidder.

Finally, programmatic advertising creates value for consumers by showing them relevant, timely ads that may fill a genuine consumer need.

Through ads you can educate, entertain, surprise and delight your audiences. How to do that? It starts with a holistic data strategy across touchpoints and functions, married with the right level of identity resolution to bring your ambitious strategies to life.

Disadvantages of Programmatic Advertising

Ad Fraud:

When a brand buys programmatic ad inventory, they are essentially paying for ‘eyeballs’ or impressions on their advert. However, with an estimated 52% of web traffic deemed to be ‘bot’ or non-human traffic, advertisers run the real risk of wasting money on ads that nobody will ever see. 

Brands often end up paying for fraudulent impressions that are derived from deliberate activity which prevents the proper delivery of ads to real people, at the right time, in the right place.

In 2016, bots accounted for approximately 9% of display ad views and 21% of video ads.

On top of paying for wasted impressions, bots also steal valuable cookies. According to the Integral Ad Science Report 2017 “Not only does this result in flawed publisher audience data, but buyers are misled into targeting non-humans and pay for unwanted inventory that bots have led them to.”

Brand Risk:

Just like in the offline world, positioning a brand advert is integral in its effectiveness. Advertisers carefully consider where they place a billboard, signs at sporting events or TV commercial slots.

However, this poses challenges when it comes to online and programmatic. With the enormity of the web and sheer volume of websites and potential Ad inventory, it is not always possible to determine the page on which an advert is to be shown.

Brands run the risk of their digital advertisements to potentially be seen on websites which may be associated with adult content, alcohol, drugs, violence, offensive language, hate speech and other potentially negative pages.

This has an array of potential problems for brands. They run the obvious risk of negativity by association. Nobody would want their brand ad to be shown on a website promoting some sort of illegal activity.

Even more detrimental can be potential boycotts. Earlier this year there was a big push for people to boycott brands which appeared on the alt-right news networks Breitbart.com.

Many advertisers weren’t necessarily wanting ads shown on the site, rather they were shown due to potential demographic targeting they had setup. The Chicago tribune reported that Breitbart lost 90% of its advertisers in two months after the boycott!

Viewability:

The final challenge for the programmatic industry centres around Ad Viewability. The Media Rating Council (MRC) determines “a display ad impression to bea viewable if at least 50% of pixels are on screen for at least one second after the ad has rendered.”

The issues that advertisers face with viewability are numerous. Primarily, the length of view is of most concern. The longer that an Ad stays in-view, theoretically, the greater the chance of consumer action to be taken.

Compared to direct buys, programmatic ads normally average around 10% less in respect to Impressions in View. So, it is argued that it is not as effective to purchase inventory programmatically as it is to buy direct.

Ad viewability can also be affected by fraudulent websites. Viewability rates can reach over 70% on fraudulent sites and ads have longer times in view at a narrower range of time spent on the page comparted to premium and other ‘real’ websites. This is largely because bots are optimised to act more efficiently.

With all these concerns at play it is no wonder the programmatic ad industry is under scrutiny at the moment. Earlier this year, Proctor & Gamble’s Chief Brand Officer called for a complete shakeup and pushed to have some of the murkiness removed from the ad supply chain.

10 Benefits of Programmatic Marketing Approach

There are several ingredients that will set you up for a successful programmatic campaign: the right technology, the right people, excellent content and creative, and top-of-the-funnel optimization.

Price point for advertiser

Programmatic buying involves acquiring remnant inventory, as opposed to premium inventory. This means that the cost per impression (CPM) is significantly lower than when you purchase premium inventory from a publisher. This will likely have a positive impact on your ROI, even if some of the views and impressions do not reach the consumer.

More data and insights

Programmatic buying works by using automated technology, which improves the efficiency and performance of your campaign. This means you can gather and analyze the data more efficiently, and draw on your insights to improve the performance of the campaign.

Improved targeting capabilities

With programmatic buying, it is easier to segment your audience into marketing lists, making it easier to target the right audience, in the right context, and at the right time.

More transparency

Programmatic buying provides the advertiser with more transparency on the remnant inventory they are purchasing, which gives advertisers peace of mind knowing that their brand image is intact.

Improved tracking capacity

Advertisers can more effectively track where an ad is shown, what level of engagement it receives, and use this data to reinvest budget in the right areas. With more effective and accurate tracking abilities you can allocate a smaller portion of your budget and still yield valuable insights and analytics.

Faster launch across all devices

With programmatic buying, the advertiser will waste no time in launching a campaign. The automated nature of programmatic buying means audiences and advertisers can connect across any device, at any time, and in any place – all in a fraction of a second.

Efficient, Integrated buying platform

Programmatic buying allows the advertiser to buy directly from the source, instead of going through agencies, which has made the entire ad-buying process more streamlined. This means less time spent negotiating the right price point, saving advertisers time and money.

As Programmatic buying becomes mainstream, high-quality inventory becomes available

As the system of programmatic advertising becomes more and more popular, so too does the quality of the inventory offered by publishers. While there was certainly some initial hesitation from advertisers to adopt the programmatic approach, programmatic buying has made its mark, with many publishers now participating in real-time bidding.

Creates a marketplace for programmatic inventory

Publishers are excited about programmatic buying, as it offers them a huge opportunity to promote their ad space. By capitalizing on the value of programmatic, some publishers have achieved critical mass on their inventory, whereas others are still behind the eight ball. By taking advantage of real-time bidding campaigns, publishers have been able to achieve stronger metrics, such as cost per impression (CPM).

More qualified leads at lower Cost-per-click (CPC)

Advertisers around the world, particularly major brands, see the value in programmatic buying. Using programmatic means that advertisers can more effectively reach their audience. As the technology improves, we will see improvement in the accuracy and precision of the audience targeting. This means that the leads captured will be of a higher quality, pushing the CPC down and improving ROI.

Challenges of Programmatic Marketing

Programmatic continues to go from strength to strength as the go-to means of audience buying. But for marketers to see success from it, they will need to overcome a number of challenges.

Challenge 1: Fraud

As personal relationships in buying and selling are reduced and more intermediaries are added – visibility and accountability can be poor. But while ad fraud is a commonly expected (even accepted) challenge for marketers, the implicit costs are staggering, with some sources estimating up to £7bn in wasted ad spend! Not good news for brands looking for greater efficiencies in programmatic.

Yet with programmatic fraud in particular, it’s often marketers themselves driving the issue. With the move to programmatic, focus has dropped from metrics such as conversion and response, in favour of metrics that are easier for fraudsters to produce (ie, simple impressions). And, with marketers willing to ‘expect a level of fraud’, ad networks often aren’t doing enough to detect and prevent fraudulent impressions.

If marketers are to see real results and improvements in programmatic efficiency, they need to challenge their partners to minimise fraud, look for metrics that offer better insights, and look for data that gives a clear picture of whether ads are actually being seen and how realistic click data is.

Challenge 2: Viewability

Even if impressions aren’t fraudulent, they can still be misleading, since many of the impressions bought (programmatic or otherwise) are simply never actually seen by the intended recipient. Just because an ad appears within an article, does not – and should not – mean that the ad has been viewed. The same goes for ad sites that contribute no purpose or value beyond hosting and displaying ads.

Marketers need to find a way to make viewability an accurate reflection of the return on their investment.

Challenge 3: Price & Safety

Some networks are guilty of mixing lower quality content together with prime media, in the cynical hope that advertisers wouldn’t notice or care if their ads appeared in less-than-ideal situations.

Equally, platforms that rely on user-generated content (social sites such as Facebook and YouTube) have struggled with content that is far from advertiser-friendly, presenting a substantial risk to brand safety. While most platforms and networks are now resolving these issues, brands should continue to demand transparency from their partners.

Regarding price challenges; technologies such as header bidding are having a positive impact on the market. And, as publishers’ gain experience they are able to expose more inventory and deploy more profitable programmatic operations.

However, the market as a whole isn’t entirely stable; issues such as fraud, measurement, inventory fluctuations and more can cause pricing to be unpredictable, especially niche or very targeted impressions.

Challenge 4: Targeting

Sophisticated targeting is of course a priority (and major challenge) for many brands. And while platforms such as Facebook and Google offer demographic targeting data; for real-time success, brands must be able to match their datasets to actual users generating impressions, then display the right, personalised creative at the right time.

Identity resolution and targeting are challenging – success requires significant investment in integration and focus on data compliance.

Challenge 5: Systems and Data Integration

Systems integration is not easy, but achieving a successful link between critical systems is crucial for true transparency, reporting and scalability.

To see future success with programmatic and to make best use of resources, it’s imperative that brands seek to integrate systems and build unified, intelligent processes that reduce manual processes.

Challenge 6: Agencies

While some brands are moving in-house, away from agency programmatic management in search of greater transparency, others have found agency partners to be incredibly responsive to the ‘do i need an agency?’ challenge. Today, agencies recognise that if they want to handle a significant portion of a brand’s ad spend, they have to evolve and offer the conversant, clear service that’s expected.

While knowing whether to work with an agency can be a challenge for some brands, agencies can offer multiple benefits; skills, experience, people and technology, plus operational or consultative support for brands who want to build out their own programmatic capabilities.

Why Programmatic Advertising

There are multiple reasons to using a programmatic advertising platform for all your digital advertising efforts. First and foremost, programmatic advertising helps buyers and sellers make data-driven decisions and removes the guesswork from the ad buying process.

It’s good for your budget. Programmatic technology creates efficiencies by using machine learning to optimize campaign success, avoiding ineffective inventory.

Better targeting. You will be hard put to find a technology platform that allows you to target across as many different tactics, across devices, in real-time.
Streamlined campaign management. Consolidating campaigns in one system across devices and formats allows you to visualize success in one place.
Easy access to ad inventories. Advertisers are able to access the optimal inventory across a variety of exchanges at once, and allow the algorithm to do the heavy lifting in bidding.

Types of Programmatic Advertising

Contrary to the traditional media buying process, programmatic advertising may not necessarily involve advertisers and publishers working on a one-on-one basis to serve ads. The ad delivery depends on the type of programmatic deal chosen.

Different types of programmatic deals dictate the rules when delivering ads on publishers’ websites. Let’s look at the key programmatic deals:

Representation of the Types of Programmatic Media Buying

1. Real-Time Bidding (RTB)

Also known as open auction or open marketplace, real-time bidding (RTB) has become synonymous to programmatic media buying primarily because of its widespread usage.

The ad slots are open to everyone in RTB, and they’re sold through an open auction type of bidding. The highest bidder gets the spot. The whole process takes place in real-time, and advertisers can choose ad slots as they are made available.

Although in RTB, the highest bidder gets the slot, they don’t have to pay their bid amount to get the slot. RTB follows a type of auction known as the second-price auction. In second-price auctions, the highest bidder is charged only $0.01 more than the second-highest bidder for the slot. The second highest bidder is charged slightly more than the third-highest bidder, and so on.

Although RTB is easy to set up and optimize, it lacks the transparency from the advertiser’s perspective. Advertisers know the general category of publishers, but they don’t know the exact publisher websites on which their ads will appear.

2. Private Marketplace (PMP)

The private marketplace functions in similar veins as RTB except for the fact that it is available to advertisers on an invite-only basis. In private or closed auction, publishers usually set aside a premium ad inventory reserved only for select advertisers. Many DSPs have their own PMPs that are accessible exclusively to the DSP users/customers.

Considering the benefits it offers to publishers, PMPs are primarily used by websites and publications with mass reach. Contrary to RTB, the advertiser using a PMP knows which websites their ads are being served on, allowing them to measure the accurate ROI of their ads.

3. Preferred Deals

In preferred deals, advertisers get to choose the ad inventory at a fixed price even before it is made available on private marketplaces followed by on open auctions.

Also known as spot buying, the negotiation in preferred deals takes a refined approach as both the parties agree on the pricing, targeting, etc. beforehand.

The advertiser is given a sneak peek of the publisher’s ad inventory and is not bound to make any purchase. Advertisers can use a DSP to understand their audience and determine whether to purchase the ad impression.

4. Programmatic Guaranteed

Programmatic guaranteed, also known as programmatic direct or automated guaranteed, follows the traditional approach of media buying. Here, the advertiser and publisher negotiate the terms on a one-on-one basis.

Unlike other media buying types we looked at, programmatic direct doesn’t follow a bidding process. The inventory is sold directly to the advertiser after the negotiation. Programmatic guaranteed provides advertisers the ability to choose when it comes to ad inventories, prices, audience targeting, and frequency capping.

Automated guaranteed is used by advertisers that know precisely where to place their ads and have hefty advertising budgets.

The Rise of Programmatic Advertising

Programmatic ad spend is now returning to its pre-pandemic “normal” levels, according to data from MediaRadar.

The number of advertisers running programmatic ads through the end of July 2020 is up 36% since January, and total programmatic spending between April and July is up 11% year-over-year.

According to the study, while large advertisers may be pulling back dollars, small advertisers are piling into programmatic as they hope for data-driven targeting strategies.

“Due to its efficiency and effectiveness, programmatic has performed well amid the pandemic,” the report notes. “Initially, programmatic was the first advertising channel to be hit hard because brands could pause campaigns immediately—but its flexibility allowed it to rebound.”

The types of companies buying programmatic ads shifted in Q2 compared to Q1 of last year. The turnaround is thanks to significant investment from technology, education and media advertisers, and despite continued declines in spend from the travel sector.

In other words, industries that benefited from social distancing are spending more, while industries experiencing economic downturn are holding onto their cash.

Education and training brand spending increased significantly as colleges went online and professional training services, like Udemy, increased their spend by 163%.

The study found that “Industries are adjusting their programmatic spend differently—but programmatic is on the rise on the whole.” 

83% of brands are now allotting a percentage of their overall ad budgets to programmatic spending, up from 76% in January 2019.

Brands are using programmatic more frequently to reach consumers who are spending more time inside and online, according to a statement by Scott Tieman, global head of programmatic services at Accenture Interactive. The changes brought on by the pandemic and the impact on ad tech could be long-lasting, he underscores. 

“As the industry braces for the loss of third-party cookies and audience identifiers, direct engagement in programmatic advertising matters more than ever,” said VP and head of the IAB Programmatic+Data Center Orchid Richardson. 

The programmatic industry is expected to reach $98 billion in ad spend by the end of 2021, making up 68% of digital media advertising, according to a report from Zenith cited by IAB. Programmatic is projected to account for 86.5% of total display ad spend by 2021, predicts eMarketer.

Why Work in Programmatic Advertising?

If you’re curious about why you should work in programmatic, and why you should use programmatic advertising in your media mix, read on.

1. It can work for the small and mid-size brands as well as big-budget brands

First things first, it would be wrong to go into all the weird and wonderful things brands can do with programmatic advertising without first debunking the myth that you need endless bags of cash to get started.

The beauty of real-time, audience-focused programmatic buying means we end up with far less wastage and far more bang for your buck. So if you don’t have tons of budget to play with, or you want programmatic to prove itself before investing more, rest assured there will be an approach for you.

2. Programmatic reach is huge

“I don’t want to reach as much of my target audience as possible,” said no one ever. We’re all agreed that the most efficient forms of advertising reach their desired audience at scale. Programmatic advertising allows us to do just that. With access to ad space across millions of sites, programmatic opens up the opportunity to find and engage your audience, wherever they are (almost).

3. You are in control

Programmatic advertising has many a perk, but one of the most invaluable benefits is the freedom it gives brands to press pause and make changes to campaigns in mid-flight. From a performance perspective, it allows optimizations to be made to upweight the best performing audiences, sites, time of day and so on, helping to continuously boost results.

Plus, from an ‘oh no, our website is down’ point of view, it allows brands to get out of jail free and stop paying to drive their audience to a dead page in an instant. What a dream.

4. You can show off your brand using funky formats

Long gone are the days where click-focused banner ads were the only formats associated with programmatic. These days, brands can engage their audience with highly interactive digital creative units, drive them to store using in-built maps, or simply wow them with a beautifully designed web takeover format, which – yes, you guessed it – can be bought and served on an individual user basis in real-time.

5. The targeting possibilities are pretty much endless

Browsing for your SO’s birthday present only to be stalked forever by an ad of that very product? We’ve all been there. As much as retargeting can play a key part of a brand’s programmatic strategy, there are many other targeting strategies brands can employ to find and engage key audiences.

These can be a bit sexy, such as overlaying previous purchase data via Mastercard, real-time and historic geolocation data, email data, Amazon purchase data, or household data, or they can be slightly less sexy but still effective, with strategies like contextual targeting, where the ad appears alongside relevant content.

Why is Programmatic Advertising Important?

There are four main reasons. Let’s break them down:

1. Scale: the power of programmatic is its incredible scalability at a volume direct buy could never have reached. In the days of direct buy, or even in current “traditional” media buys, you would be limited by smaller inventories and lesser reach. The power of programmatic allows you to reach a vast amount of people all across the Internet wherever they go through the power of retargeting. Programmatic allows you to purchase any inventory available on the Internet, provided you have the budget available.
2. Real-Time Flexibility: Another problem with direct buy is that it doesn’t permit any adjustments once your purchase has been made. It’s set, and all you can do is let it run its course regardless of whatever performance you’re seeing. Programmatic, however, allows you to make changes  in real time based on the impressions that you’re getting.
3. Targeting: With programmatic, you can also layer in way more targeting criteria pretty cheaply in order to reach exactly the audiences you want, all at the previously mentioned huge scale. For example, you could layer thousands of specific in-market audiences into your targeting reaching all across the Internet and make your advertising much more efficient, saving you money on spend while making you more money per impression. When it comes to big data, demographics, interests, in-market audiences, and more are only the start of the kind of layers you could add to your targeting. Layering in targeting criteria all through one platform is one of the biggest benefits to programmatic advertising.
4. Efficiency: Here at Wpromote, we use programmatic advertising for some of our biggest clients, and we do it to make their spending more efficient. For example, if we have extra money in a client’s advertising budget, we can plug it into their programmatic partner and layer in that client’s very specific targeting criteria. Because programmatic is so cost-efficient, even a small piece of budget can go a very long way, and that client will make back four to five times what they’ve spent.

What is Programmatic Buying?

Programmatic advertising is the use of automated technology for media buying (the process of buying advertising space), as opposed to traditional (often manual) methods of digital advertising. Programmatic media buying utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price.

Read Also: How Online Video Advertising can Boost Business Profits

The traditional media buying process involves a lot of manual work, typically with several requests for proposals (RFPs), human negotiations and manual insertions of the orders (IOs), which makes it slow and inefficient. Additionally, ads are purchased in bulk and advertisers have little control over the inventory and placement.

Finally

So the question you may be coming away from all this with is: should I be using programmatic advertising? To decide that, it really depends on whether or not you have a need for any or all of the four reasons stated above, and if you think the types of programmatic would work for you.

What isn’t in question is the surging importance of programmatic in display advertising and why it’s become so critical to digital marketers!

As programmatic advertising changes the way we treat media, brands are rethinking the way that they build messages and manage media. Certified content delivery strategists are replacing the old media buyer, as advertisers look to actively manage their first-party databases, target messaging and refine campaigns using analytics. Digital content is becoming the norm and programmatic will be the new advertising standard, to everyone’s benefit.