Programmatic advertising is constantly evolving. From online ads and video to digital out-of-home, streaming, voice and TV, the sheer number of options can make it feel like an impenetrable process to understand.
“Programmatic started off as a way of using up remnant inventory,” explains IAB UK senior programmers manager, Dee Frew. “It was a way of increasing the efficiency on leftovers, but as it has evolved it’s become more sophisticated.
“There is, however, a frequent misunderstanding that all programmatic is real-time advertising. That is a subset of programmatic, a way of utilising programmatic techniques to make instant purchases. It’s a bit like having a robot shop for you on eBay. Real-time advertising is an auction-based model, whereas programmatic is the full breadth of automation.”
Put simply, brands or agencies use a demand side platform (DSP) to decide which impressions to buy and how much to pay for them, while publishers use a supply side platform (SSP) to sell ad space to brands. These two platforms are then matched up in real time.
One aspect of programmatic advertising is guaranteed impressions. A price is pre-agreed by the buyer and seller before the impressions go live on the website. When the brand needs to amplify the message, or reach a different audience beyond the continuous campaign, marketers can bid for real-time impressions.
The use of acronyms such as DSP and SSP, along with DMP (data management platform) and API (application programme interface), can make programmatic seem overcomplicated.
How does it Programmatic Marketing work?
When anyone clicks on a web page that has advertising space that is configured for programmatic advertising, the publisher of the page puts up an ad impression for auction in an ad marketplace. The ad marketplace then runs an auction among advertisers interested in displaying an ad to that specific customer that just click on the page. There may be many advertisers competing in this auction, and whichever one ultimately is willing to bid the most wins the auction and then their ad is displayed to the customer when the page loads.
Because the process is automated and the maximum price each advertiser is willing to bid for the impression has already been programmed in, the auction can be completed within the milliseconds it takes for the page to load. Our simple infographic takes you through 6 steps that explain how programmatic marketing works.
Advantages of Programmatic Marketing
Programmatic marketing opens up a series of opportunities, which would not be possible if ad placement was done manually, as it has been done in the past. It allows advertisers to procure digital media without having to pre-negotiate a price, so they pay only for the relevant impression that they actually receive. They can also sign up for a minimum number of impressions or a minimum budget, which makes digital advertising more flexible, and they can buy digital media across publishers, which reduced administration costs.
But the opportunities are much greater than just making ad buying easier and more flexible. Because programmatic marketing means bids are arranged for each individual accessing the site people can be targeted to a far greater extent than before.
Using customer data, Programmatic technology can identify what resonates with each individual and target him or her on the sites on the sites they are most likely to engage with and at the time they are most likely to engage.
Native advertising is fast becoming a powerful digital marketing strategy, as traditional display and banner ads become less and less effective. With internet users increasingly ignoring overt sales tactics, average click-through rates (CTRs) for display ads have fallen over time to 0.17 percent, according to Google. In contrast, native ads enjoy much higher CTR and conversion rates, because they offer visitors more than just a hard sell.
A native ad is a piece of content that looks and feels like an editorial article. Advanced algorithms enable advertisers to dynamically position their native ads next to similar or related content on the web. Consumers are more likely to engage with a sponsored article that provides them with relevant new information than with a traditional banner ad, and they are more likely to share it with friends.
Within the parlance of digital publishing, four prominent pillars have solidified their long-term presence. These include:
- Display ads
- Video ads
- Social ads
- Native ads
Despite being a relatively new phenomenon, native ads have emerged as the third most popular publishing strategy, along with video ads, as per a poll conducted by Salesforce encompassing 4,000 marketers. Native advertising has become an important component of most major brands’ marketing repertoire with a growth in the number of native advertising platforms.
As a case in point, about 90 percent of Daily Beast’s ad revenue is attributed to native advertising. Publishers and advertisers are pouring in millions of dollars in developing intelligent platforms that refuse to comply with the standards of conventional media.
Facebook and Twitter: Shining examples of Native Advertising Success.
Feed-based advertising is the most efficient means of native advertising. This has been exemplified by the likes of Facebook and Twitter, which are increasingly maneuvering their platforms proactively to ensure top-quality user experience while doing away with the visceral rigidity of these platforms.
Apart from heralding one of the most hard-hitting forms of advertising, this move has also revolutionized mobile advertising in that native ads have catapulted the monetization experience for the entire mobile media industry.
This also means that practically every marketing endeavor can be benchmarked against feed-based ads of Facebook and Twitter. In addition to supplementing conventional metrics such as engagement, analytics, and click-throughs, native ads pave the way for a more insightful analysis of critical business metrics as they unlock ad-specific information about every single user.
Despite its immense potential, there are a few challenges confronting native ads. For instance, the development of localized, custom content can restrict the scalability of digital marketing efforts. Regardless of how creative or effective these ads are, the fact remains that most (if not all) consumer brands must eventually touch a large audience base to maximize cost-efficiency.
Striking the balance between and the marketer’s audience-specific message and editorial standards constitute another challenge to the growth of native ads. To that end, advertisers must always remember that the core essence of native ads is to provide a decisively seamless experience to users, and not to hoodwink them.