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Programmatic advertising is continuously growing in popularity, as the spending on programmatic ads in the US increased by 10.4% in 2020. This projection is planning to develop more into 2022, with $96.5B.  With the growth in programmatic advertising popularity on multiple channels, it’s vital to have a knowledge of what programmatic advertising is and how it works with various marketing channels before starting off your first campaign.

Did you ever wonder why advertisers are increasingly turning to programmatic for their display category?

To put it briefly, rather than buying directly from the publishers, with the help of programmatic marketing, you can automatically buy and optimize digital campaigns. 

Like programmatic advertising, another practice of advertising which has come to the trend lately in contextual advertising. The concept is old but is being practiced after being abandoned to target sophisticated audiences through behavioral advertising. However, here we are going to talk a lot more about the basics of programmatic advertising and its benefits. 

What is Programmatic Advertising?

Programmatic advertising is the automated way of selling and buying ad inventory via an exchange, connecting marketers to publishers. This process uses AI technologies and real-time bidding for inventory across display, video, mobile, CTV, Radio, and social media channels.

The definition can be easily understood by using the example. Let’s take a scenario, there is a company that wants to sell designer wear from women. It then hires a programmatic advertising platform that can identify customers using different parameters like:

• Age group
• Gender
• Interests
• Behaviors
• Devices

Using programmatic advertising, the business uses real-time data and analyze the most suited audience for the campaign. After this, the personalized advertisements are displayed on the basis of customers’ unique interests and behavior.

In a recent study done by Statista, a popular market research company, it was revealed that the global programmatic display advertising spend reached 105.95 billion U.S. dollars in the year 2019, and hit 147 billion U.S. dollars by the year 2020.

Who Uses Programmatic Advertising?

Programmatic advertising is one way for businesses/ enterprises to advertise on digital space. It is now reaching new heights as many publishers have now enabled native ads on their websites. One of the major reasons why many publishers are encouraging native programmatic advertising is because their ad space is less affected by ad blockers in comparison to other ad types and platforms.

Why Choose Programmatic Advertising?

In the starting, we discussed already that programmatic advertising is expected to grow exponentially. It’s an efficient way of running advertising campaigns. Here we have explained a few pointers which will clear your doubt on why you should choose programmatic advertising.

1.  Target Your KPIs More Closely – Programmatic media buying is constantly working to improve performance for your campaign’s KPIs and increase overall ROI.
2. Cost-Effective – With programmatic, marketers have the ability to adjust the CPMs in real-time based upon how heavily that impression is seen.
3. Gain More User Insights – Know more about your target audience! Programmatic media buying is also gathering “smart” data contingent upon the type of people that engages with your brand. Take these lessons and apply them across all marketing campaigns to increase overall performance, creating a greater marketing approach.
4. Convenient Media Buying – Forget the challenges of RFQs, RFIs, & RFPs and focus more on the overall strategy for your ad campaign through programmatic technology.
5. Scalability – Programmatic technology allows you to reach a greater audience over multiple websites in a timely and efficient manner.

Artificial intelligence has algorithms that notice a user’s behavior for real-time campaign optimizations for an audience that is more likely to convert. Programmatic firms have the ability to collect this audience data to target more precisely. 

Let’s start by looking at the breakdown of programmatic advertising – 

1. Arrive: When a user arrives at a website that is involved with programmatic advertising, it triggers the automated programmatic advertising to start on its own. Since the advertisement happens in milliseconds, the users hardly even notice it. 
2. Send: In response to users arriving at the website, the publisher of the respective website automatically sends the dimensions of the ad space to a Supply-side platform (or as it is commonly known as SSP). Another easy thing to think about is that the publisher lists their product for advertisers to purchase. 
3. Read: After the necessary information is received at the ad space, the SSP then analyzes the user’s cookies. The main objective here is to learn as much as possible about the user from different resources like demographic, their interests in order to deliver relevant ads at the right time. 
4. Evaluate: Now, the coordinating demand-side platform (DSP) is involved in the process. After reviewing the information obtained by the SSP, the DSP can evaluate the user’s worth and assign it a value. 
5. Bid: After a value has been assigned to a user, the DSP submits a bid to the SSP. One interesting fact to note is that this all happens in real-time, which is a major reason why some people refer to programmatic advertising as real-time bidding.
6. Choose: Once the bid is arrived, the SSP will review it and any other bids received. A winner will be picked out from the lot which most of the time is the higher bidder. Now, depending on the auction, you might have to pay your highest bid or the price of the second-highest bid. 
7. Deliver: Now that we have a winner, SSP delivers the ad to the audience. As the programmatic advertising process is happening in a blink of a second, the page will load with the ad displayed.  

Use Programmatic Audience Insights on Marketing Channels

Rather than planning your media buy on where you think your target audiences are, begin focusing on the overall campaign strategy and goal to reach the desired audience you want. With the capability to adjust the campaign in real-time depending upon the insights collected, you start to understand who your target group is, making way for further refinement across multiple marketing channels.

Start focusing on including all efforts as one large marketing plan to improve ROI and overall customer touchpoints. 

Now that you have understood the basics of programmatic advertising, check out this post to learn about the programmatic buying process.