Programmatic advertising is one of the most innovative and dynamically developing areas of digital marketing. It provides brands with unique ad placement solutions that optimize advertising campaigns, making them more accurate and effective. In this article, you will learn about the main aspects of programmatic advertising, its advantages, and the features of its launch.
What Is programmatic?
This is a system for buying and selling impressions and target actions through automated platforms. The main feature is that the advertising message is shown to the most interested users. A special algorithm ensures accurate hits.
Audience segmentation can be carried out by the following parameters:
- demographics;
- location;
- search queries;
- interests;
- devices and browsers used;
- behavior;
- time of day.
How Does It Work?
In programmatic advertising, there are three platforms participating in the auction:
- DSP (demand side platform) is the party that generates demand, or, more simply, purchases traffic and places bids at the auction. These are advertisers who upload their creative materials, define the target audience, and set the target. Their goal is to place their ad at the lowest cost and with the most accurate hit in the target audience.
- SSP (supply-side platform) is the party that generates the supply. But these are not end users, but a system that accumulates traffic from multiple sites and connects to the DSP.
- DMP (data management platform) – this side manages data and is responsible for hitting the audience’s interests when placing ads. In this case, the system collects information about user interests from different sites and then divides them into segments. Thanks to it, the DSP understands who exactly needs to see the advertising message.
Why You Shouldn’t Confuse Programmatic With Targeting, Contextual Advertising, And SMM
If we consider contextual advertising, in this case, the difference with programmatic is in the use of already formed, ready-made keywords. They allow visitors to find the desired product or service, respectively, the advertiser is targeting existing demand.
Programmatic is aimed at generating demand, and it works at the upper stages of the sales funnel.
But SMM is brand promotion through social networks, based on working with a group of users. Here, content, interaction with the audience through reactions, reviews, as well as tools for increasing engagement and loyalty are mainly used.
Sometimes targeting is used in SMM, and, it would seem, the mechanism of operation is approximately similar. The difference lies in the goals of promotion. If in social networks it is important to attract likes, comments, subscriptions, and other signs of engagement, then in programmatic media indicators (reach, traffic, conversions, awareness, etc.) are more important.
There are also a number of differences in the specifics of the functioning of these systems and the optimization of advertising campaigns. We can say that targeting in social networks is programmatic within one website or application.
Advantages And Disadvantages of Programmatic Advertising
The entire programmatic advertising system certainly has its pros and cons. Let’s start with the advantages:
- Independent launch of advertising without involving intermediaries.
- Simultaneous coverage of different platforms.
- Speed of processes.
- Reduction of resources for running an advertising campaign.
- Transparent purchasing mechanism.
- Optimization of campaigns at any time.
- Viewing statistics on all platforms through a single window.
- The most accurate optimization of settings and targeting by various indicators.
- Purchase of traffic on premium resources through an open auction.
- The ability to select and purchase residual traffic on sites for a small cost.
Now let’s look at the disadvantages of programmatic ad placement services:
- The difficulty in obtaining high-quality results without preliminary testing and experience using such platforms.
- The need for preliminary analysis. Robots cannot independently determine the target audience, so you need to understand who exactly the ad should be directed at.
How Programmatic Advertising Works
In programmatic, everything is built on the principle of a real-time auction. The sequence of actions in the functioning of this system is as follows:
- Website owners who are going to place ads register on a special platform. The auction will take place there.
- The user goes to the page where there is free space for advertising.
- The platform notifies everyone who wants to show their ad about the start of the auction.
- An auction is held, where the advertiser who is ready to give the maximum bid for the display wins. He determines the price in advance.
- The ad of the winning advertiser is shown to the resource visitor.
- The client clicks on the ad, and the advertiser converts it into a sale and profit.
It would seem that the process is quite complicated, but with the help of robots, it takes a few seconds. The advertiser’s interests are represented by DSP services that automatically select the most profitable placement options, and the places are sold by SSPs.
By the way, in addition to placement through an auction, there is also a direct method called programmatic direct. It involves purchasing a place on a specific resource; trading, exchanges, and other similar mechanisms are excluded.
How to Launch Programmatic Advertising?
Before launching advertising on such platforms, it is worthwhile to first analyze the target audience and determine its profile. Users should remember the shortcomings of the system. Thus, segmentation must be done independently. On the platform, users should specify more detailed parameters to hit the target.
Based on the research, users should prepare creative material. And then everything goes according to a strictly established sequence:
- Choosing a platform. You look at the resources that best meet your needs and have large coverage and a good reputation.
- Creating an ad within the service. Here you simply upload the previously developed creative materials.
- Setting up the target. This is where the previously completed analysis of the target audience will come in handy. This picture will help to extract the maximum benefit from this tool.
- Setting KPI. Determine in advance by what indicators you will evaluate the effectiveness of this process.
- Tracking the campaign and analyzing the results. Adjust the parameters as needed to achieve the best result. If the first attempt was unsuccessful, try using a set of other settings.
Wrapping It Up
Programmatic advertising is actively developing, offering businesses increasingly useful tools and approaches for effective work with the audience. The use of modern advertisement placement solutions allows advertisers to achieve high engagement and conversion rates, minimizing costs and optimizing processes. If you are interested in entering the programmatic advertising market, we recommend paying attention to TeqBlaze. The company has been specializing in creating programmatic advertising and real-time bidding platforms since 2014.