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Programmatic advertising is one of the hottest topics in the marketing sector today. In 2023 alone, it generated a staggering $546 billion in revenue. Industry experts predict this number will skyrocket to a massive $779 billion by 2028.
But what exactly is programmatic marketing?
In simple terms, programmatic marketing is the automated buying and selling of online media space through the use of technology. This technology combines what is referred to as “Ad Exchanges” together, allowing advertisers to publish their ads across a wider range of websites.
Google Ads for example has its own Ad Exchange called Google AdX. This is a real-time technology that allows advertisers to purchase space on websites, and website owners to offer this space for sale. Programmatic marketing works in a similar way, but instead combines a series of Ad Exchanges into one platform.
These exchanges can be accessed through demand-side platforms (DSPs), which give advertisers the opportunity be quite specific as to when, where and to whom their ads appear.
Two Types of Programmatic Marketing
There are two forms of programmatic marketing: programmatic RTB and programmatic direct.
Programmatic RTB (real-time bidding) follows similar principles to Google’s Ads Display Network where advertisers can bid on what sites banner ads appear when a series of targeting requirements are satisfied (i.e. interests, viewing device etc.). Advertisers can fight for a publisher’s space on a user-by-user basis and generally speaking, the highest bidder wins.
Programmatic Direct – is a real winner! Often referred to as automated guarantee, programmatic guarantee or programmatic premium (don’t be alarmed, these are all the same thing), programmatic direct allows an advertiser to research the best publisher and advertise on their website for an agreed-upon price for a duration of time. This removes the process of sending a request to discover pricing/availability, transacting deals via paper trails and uploading the final advertisement. Bypassing these steps and allows for a more seamless and transparent delivery of ads.
How Programmatic Marketing Works
Programmatic marketing is a high-speed, digital auction. Think of it as a bustling marketplace where buyers (advertisers) and sellers (publishers) compete in real time for ad space. Here’s a breakdown of the key players:
- Advertisers: Brands or businesses looking to promote their products or services.
- Publishers: Website or app owners who sell advertising space.
- Ad Exchanges: Digital marketplaces where ad inventory is bought and sold in real-time.
- Demand-Side Platforms (DSPs): Software platforms used by advertisers to manage and execute programmatic ad campaigns.
- Supply-Side Platforms (SSPs): Platforms used by publishers to manage and sell their ad inventory.
- Data Management Platforms (DMPs): Platforms that collect, organise, and activate data to improve ad targeting.
Why Invest in a Programmatic Campaign?
Having the ability to target users at such a granular level and across a larger network is the real USP of programmatic marketing. It is an avenue that allows brands to amplify their core marketing messages to a very defined audience.
Programmatic marketing also removes the element of human intervention and when it comes to purchasing and agreeing on rates for on or offline advertising space. As a result, purchasing the same or similar inventory from publishers is much cheaper in comparison to traditional advertising.
By automating the ad buying process, it increases efficiency and scalability, allowing for rapid campaign deployment and expansion. Additionally, programmatic marketing provides detailed performance metrics, facilitating enhanced measurement and optimisation for maximum return on investment. Finally, through real-time bidding and data-driven strategies, advertisers can achieve cost optimisation.
3 Key Challenges of Programmatic Marketing
Programmatic advertising isn’t all sunshine and rainbows. There are some challenges to watch out for. One big issue advertisers must protect their brand reputation from appearing alongside inappropriate content.
Plus, there are strict rules about how you can use people’s information, and it can be tricky to follow them all. And let’s face it, understanding how all the different parts of programmatic work together can be like learning a new language! You need skilled professionals who really know their stuff to make the most of programmatic advertising.
Best Practices for Successful Programmatic Campaigns
- Define clear campaign objectives: Determine what you want to achieve (e.g., increase sales, website traffic, brand awareness).
- Build detailed audience segments: Create specific groups of potential customers based on shared characteristics.
- Optimise bids and creative assets: Regularly adjust your bids to maximise ROI and test different ad creatives to improve performance.
- Leverage advanced targeting options: Use tools like lookalike audiences, behavioural targeting, and hyperlocal targeting.
- Monitor and analyse performance: Track key metrics, identify trends, and make data-driven adjustments to your campaign.
Programmatic vs. Google Ads
Many of our clients ask us the question, “If we’re already running a Google Ads campaign do we need to invest in programmatic marketing?” The answer is yes and no.
Programmatic marketing is a strong alternative, granting access to a range of real-time bidding vendors, whereas Google Display Ads only allows for campaigns to be run within the Google network. However, for Programmatic to work it needs to be used in line with your current marketing objectives, activities and budgets. The success of a programmatic campaign will also be subject to the quality of data supporting it. Where has the data been collected from, how fresh is it and how will the platform let me use it?
The majority, if not all, of the demand side platforms connect to the ad exchanges that already exist. So what does this mean? Depending on the demand side platform being used and who is serving it (Google, Microsoft etc), the technology linking to these existing ad exchanges will frequently offer additional targeting and publishing options not previously available.
Simply put, on a programmatic platform you have the ability to run display ads on websites that you previously couldn’t have done so in real-time.
Wrapping Up
Programmatic marketing has rapidly evolved from a niche concept to a cornerstone of modern advertising. Its ability to automate ad buying, coupled with advanced targeting capabilities, offers unprecedented efficiency and effectiveness for businesses. While challenges such as ad fraud and data privacy persist, the industry’s continuous growth and development underscore its potential to reshape the digital advertising landscape.
By understanding the fundamentals of programmatic marketing, including its key players, processes, and benefits, advertisers can make informed decisions and maximise their ROI. As the industry continues to mature, embracing best practices and staying informed about emerging trends will be crucial for success.
Article by
Nicholas Turner
