Programmatic advertising 101
Programmatic advertising is a great tool to work with. Unfortunately, not so many expert materials are written about it, so it can be rather difficult for beginners to understand all the details on their own. We decided to fix the situation, so we launch a series of articles on the subject where we will share our experience on this topic.
To begin with, it is important to understand the definition of programmatic advertising because many myths have appeared around it in the digital marketing niche.
Myth 1: Programmatic advertising is inexpensive traffic on unknown sites.
Myth 2: Programmatic is just an auction of traffic buying.
Myth 3: Programmatic is just another performance channel.
In reality, programmatic is an automated way to purchase targeted advertising on the Internet. No more and no less.
Programmatic is a way to purchase traffic in real-time through the interfaces of advertising systems, which allows you to buy not the entire traffic or content but target the specific users that we need. At the same time, one of the important features of the software is the ability to optimize advertising campaigns in real-time by many parameters.
Due to its flexibility, programmatic can be used for many tasks: media (for example, the ability to buy video and large formats with a fixed cross-frequency and viewability control on different sites) and performance (use accurate audience targeting, retargeting and automatic optimization of CPA campaigns).
Programmatic advertising ecosystem
It has a fairly large ecosystem because of the large number of specific terms, but it is easier than it seems at first glance.
DSP is a demand-side platform, i.e. a system that buys traffic. Creatives are loaded into this interface and targetings are set up. Its algorithm takes part in the auction and it is responsible for optimizing the campaign.
The main features: targeting specific sites, keywords on pages, devices, geography, browsers, the usage of audience segments, remarketing, the ability to automatically optimize for a given KPI (CPM, CPC, CPV, CPA).
Examples: DV360 – Google’s DSP, MediaMath, Appnexus, Sizmek.
SSP is a supply-side platform, i.e. it is a system that accumulates traffic of many sites and connects to DSP. It is a large network of sites that connects them in a single stream and allows all of them to connect to the DSP at once to sell traffic.
The most famous are Google Ad Manager, Appnexus, Mopub, Rubicon.
DMP is a data management platform, which is responsible for targeting ads in programmatic. This system collects information about users from different sites and defines users in segments according to specific criteria. Based on data from DMP, the DSP understands which users to target.
The main opportunities: the purchase of collected audience segments, the collection of custom segments upon request, the collection and storage of their (client) data, the collection and storage of data on advertising campaigns (you can show advertising to those who clicked on banners from the previous campaign, or who watched the video to the end), the collection of LAL audiences.
By the way, advertising in social networks is also programmatic advertising. Social networks have the same ecosystem inside themselves. They have DSP – interface for advertising campaigns, integrated DMP – social networks have the most data and SSP – internal system of traffic redistribution, also, almost all social networks have their advertising network.
It is the same software, only within one site (and/or application) with some add-on as an advertising network.
What is the difference between programmatic advertising and SMM?
SMM (social media marketing) is a promotion in social networks. The key issues are content, work with users, feedback, engaging users, and increasing their loyalty. Often brands also include paid promotion in their SMM strategy. At first glance, it may seem that it’s the same as programmatic, but significant differences are in the objectives of the campaigns. In SMM it’s mostly about subscribers, likes, shares, and other indirect signs of audience engagement, but for programmatic – it’s about coverage, growth of brand awareness, traffic to the site and conversion – media indicators, and the specifics of work and optimizes advertising campaigns.
What is the difference between programmatic advertising and SEM?
Historically, programmatic is compared to Search Engine Marketing. We don’t think it’s quite right – and here’s why. SEM, first of all, works with already formed demand through keywords. Let’s say you want to buy a bike. You write in search “Buy a bike”, and you are either shown an ad in the search itself or for some time you will come across banners with bicycles on the GDN advertising network.
Besides retargeting mechanics, programmatic works on top of the funnel and works to make this very demand form. For example, if you are interested in sports, shows you that it would be nice to buy a bike. And then, when you are ready to buy, you will be “caught” retargeting from the site in the software, or in contextual advertising.
If programmatic gives a higher cost for conversion, does it mean that it works badly? No. It is also wrong to think that placing banners in GDN will be able to perform branding tasks normally without frequency control, viewability, and brand safety.
The main pros and cons of programmatic advertising
- The speed of launch, stop and change in advertising campaigns is much faster;
- You can spend much fewer resources on campaign management;
- Transparency in procurement. Through the interface, you can control each site, format, and audience you purchase;
- Campaigns can be optimized in real-time and statistics for different sites can be seen in one window;
- Audience targeting and other settings allow to optimize campaigns based on many indicators, including conversion and visibility;
- With an open auction, you can buy cheaper traffic from premium sites (Forbes, RBC, etc.), which can sometimes be more expensive in a direct purchase;
- You can choose whether to buy traffic on sites for a small price or to buy the best sites through private transactions at a higher price.
- Some tools are only available to large agencies or clients (for example, DV360).
- It’s hard to get good results without experience or a series of tests.
- It takes more time to get good results in performance than in context ads
- You need to monitor traffic quality: measure viewability, fraud, and brand safety for purchased traffic.
- There is not enough expertise and open-access information in the market yet, so solving some technical problems can be difficult and time-consuming.
How to choose an advertising platform for working with programmatic advertising?
Effective work with automated advertising purchase depends a lot on which platform you will work with. In the West, the most popular programmatic advertising platforms for working with the software are Google Advertising Manager, AppNexus, and Rubicon.
To choose the right platform for your business, it is worth paying attention to several important aspects:
- audience coverage (whether you can show your ads to the right users);
- targeting capabilities (make sure that the tools of the chosen platform are flexible and accurate enough to find your target audience);
- cost (most platforms are paid and have a certain entrance threshold for advertisers; the main indicator is the advertising budget);
- transparency guarantees (the platform must protect the advertiser from fraudulent traffic – when ads do not reach real people, and views and clicks appear thanks to bots).
- visibility of ads.
Key steps for successful work with programmatic advertising
The first step. Understand the audience
Audience data is the basis for further work with advertising. It is necessary to collect and analyze the maximum amount of data on all points of contact and interaction of target users.
The second step. Create a convincing design
Advertising creativity must not only be convincing and appropriate. The programmer makes it possible to use different advertising formats:
- traditional banners;
- dynamic HTML5 ads;
- videos and so on.
The chosen method of delivery of an advertising message must be suitable for different channels and screens that are used by the target audience.
The third step. Use integration
Working with powerful programmatic advertising platforms, you can get one campaign management center and single reporting on all channels, devices, and formats. This advantage must be used to work effectively with your audience.
The fourth step. Catch up with the user on any screen
Automated shopping should be used to attract an audience at any time, on any screen or channel. In this way, the advertiser can catch the right micro-moment when advertising affects the decision.
Step five. Evaluate the measure of impact on users
Programmatic advertising helps to evaluate advertising in real-time and immediately optimize brand campaigns.
What would programmatic advertising be like in the future?
1. Programmatic video advertising
Video advertising is a global trend in internet advertising. We have already written about how this way of presenting information works.
2. Cross-media and growth in programmatic mobile advertising budgets
With the increasing popularity and frequency of use of smartphones, the approach to digital marketing is transforming.
3. Outdoor Advertising
In 2016, Google began testing software technologies in outdoor advertising. The system analyzes information about the weather, user movements, local events, and shows the most relevant advertising. Going beyond the Internet Leading software players also aim to integrate with large TV channels.
The programmatic advertising itself is unlikely to change anything in the near future. But the increase in the number of channels will lead to an even greater division of labor in Internet marketing. On the other hand, the zoo of channels increases the need for intermediate services that can manage several channels at once. For example, Marin Software and Adobe AdLense.
Now actively developing in-house software, programmatic video, and programmatic mobile, success awaits those companies that have already begun moving in these directions of development. Last year’s breakthroughs in the expansion of automated purchase of traditional formats – outside the home, print, and TV – indicate the future, in which with the help of software you can buy any media channel.
- Programmatic advertising is a way to purchase targeted digital advertising, which allows you to automatically purchase advertising on a large number of sites in real-time;
- Programmatic advertising solves both media and performance tasks. With the help of the software, it is possible to buy only noticeable formats with good viewability and to control cross-coverages between sites to perform media KPIs. To solve performance problems there are algorithms of CPA optimization, the ability to segment the audience of site visitors for retargeting. Thus, programmatic tools allow you to solve problems at any stage of the funnel;
- Main ecosystem elements: DSP (purchasing interface), SSP (website network) and DMP (data management platform);
- Targeted advertising in social networks is also programmatic advertising if we do not promote posts from the group for recruiting subscribers;
- Covering the necessary target audience even without a performance KPI is also a separate important and complex task that can be solved with the help of placement programmers. And the placement software allows you to get to the right target audience as accurately as possible by working with any audience data.
“Programmatic advertising buying overshadowed the face of advertising! The future belongs to them,” say the PPC idealists. This is bulls**t! Robots can’t replace people 100%,” the skeptics will say. The truth, as always, is in the middle.
People, as before, will make basic strategic decisions about targeting and optimization. And work with some formats of advertising, such as video, in general, is still not sufficiently automated.
Programmatic is a model of buying, selling, and optimizing advertising with maximum automation of all processes.
To deliver the right message to the right client at the right time, the work of the software is based on the interaction of different programmatic advertising platforms and systems. These include representatives of web publishers – SSP and Ad Networks, representatives of advertisers – DSP and Trading Desk, “meeting place” of the first and second – Ad Exchange.
The main advantages of automated advertising purchase – accurate targeting of the audience, saving time, and the ability to optimize advertising campaigns in real-time.
Most of all, the introduction of software is hindered by ignorance of the system, the principles of its operation, and possible results.
To choose an advertising platform to work with the software, it is necessary to take into account the audience coverage, the possibility of targeting, the cost of use, guarantees of transparency and visibility of ads.
For effective programmatic advertising campaigns, it is necessary to understand the audience, use compelling ads adapted to different devices, not to forget about the benefits of integration and the need to evaluate the measure of the impact of advertising.
The main trends of the software are the growth of mobile and video advertising, as well as going beyond the traditional gadget shows – billboards and city lights.
Do you work with programmatic advertising?