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Author: Guayanna Nayak |03/01/19

Understanding the Force of Programmatic Advertising

Many conferences passed by and you have sat through boring lectures sagely acknowledging the experienced speaker huddling about ‘Programmatic Advertising.’ If you think you vaguely relate to the A-Zs of the concept, but not able to understand the ‘whats’ and ‘hows’ of Programmatic Advertising, this blog could be just the right place for you.

In this ever-changing landscape of digital marketing, Programmatic Advertising is a newly-evolving bud. In the next few paragraphs, we’ll try to breakdown what programmatic advertising is, who is doing it right, and how technology helps to do it right.

Programmatic ad buying, put simply, is automating ad spending. It is the use of technology to purchase digital advertisements. Unlike the long-established, old method which includes quotes, requests for proposals, tenders and human negotiation, Programmatic Advertising facilitates the use of machines and algorithms to buy ads to invest in display space. However, it is not the exhaustive industrialization of the ad buying process.

The inclusion of insertion orders manually prepared by the advertisers and marketers are often a monotonous and menial task, but programmatic advertising makes it easy by securing more time for marketers and businesses to optimize and enhance the ads. It’s not that we are taking away the attention and applause from the individuals who play a very crucial role in planning and strategizing advertising, but the introduction of Programmatic Advertising makes this labor-intensive work moderately easy. This opens a much efficient and enhanced way to optimize and target the advertisements, but at the same time, it isn’t a foolproof method. Programmatic advertising has its own prejudices and cons which we’ll cover in the latter part of this blog.

A glance at the Programmatic Advertising ecosystem

The users view different webpages on their browser, and the browser calls for the webpage which is the publisher where ad inventory is available on the Ad server/exchange. The Ad exchange holds an auction for each of the impression by sending a bid request to each of the DSPs. DSP gauges each impression and returns a bid amount based on its value to the advertiser. DSP enables the advertisers to access ad exchanges and bids on each individual user impression based on what is known about them. The winning bid is chosen by the Ad exchange, and Ad is shown on the webpage (publisher). The creative background of the Ad is generally hosted by DSP or any other 3rd party Ad Agency.

Let’s resolve the 7 top questions on Programmatic Advertising

Is Programmatic Advertising successful?

It’s competent enough. A survey from eMarketer in 2017 had found that the US spend around $33 Billion on programmatic ads alone. This whopping number accounts for 84% of all digital display ad spend.

“Programmatic advertising is designed to forgo the conventional, imprecise nature of the campaign design. The old system was responsible for costing the marketers way too much money," says the CEO and founder of Ignite Visibility, a leading SEO company in the US.

Programmatic Advertising allows you to understand the media journey better and provides the illusion of having a 1-1 conversation with your customers. The programmatic system is devised to resolve the placement of various types of ads. Thanks to the advancements in the field of artificial intelligence (AI).

Why use Programmatic Advertising?

  • Financial Benefit: To save marketers time and money by easily handling the manual, tedious tasks
  • A New Age System: The algorithm calculates the optimized place to spend the money you invest in ads. The system monitors your spending and looks for areas of improvement once you update the system with the campaign information and its KPIs.
  • Fighting Ad Fraud: AI detects Ad Fraud to some extent and avoids it. State of Digital claims that programmatic ads are viewable up to 44%-55%. The industry average for malicious and suspicious activities is around 16%, which means programmatic ads lower values of frauds than other display ads.
  • Automated processes: For a digital marketer, it’s critical to optimize digital ad campaigns. When you adopt programmatic advertising, the optimization is automatically handled. You should still monitor and launch new campaigns.
  • Working with Big Data: Programmatic Advertising stores and uses the information provided by Big Data solutions: it’s vital for targeting & segmenting to uncover the hidden markets.

Will Programmatic Advertising be the next big thing of ad buying?

Probably, yes. The chunk of advertising done programmatically is still under the wraps, but its usage is accelerating quickly. Organizations are hiring agencies to leverage various programmatic channels, while some major brands are going with the ‘in-house’ way to crank up their programmatic ad buying. Today, mainly the online ads are traded programmatically, but media agencies are probing ways to sell ‘conventional’ media the programmatic way, including TV and out-of-home ads.

Who is rightly using the Programmatic Ads?

The Economist’s award winning promotion saw a huge ROI in 2016-17.

Leveraging its rich content along with thought-provoking and humorous headlines, the Ads targeted the curious readers whose cookies showed they hadn’t spent much time on the magazine’s website.

Others who have run successful programmatic Advertising campaigns are:

  1. O2: The mobile Ads were repurposed based on mobile usage data to personalize the messaging for the users. This led to a 128% higher CTR than before.
  2. Audi: Programmatic Ads buying translated to 4 times higher conversion rate than earlier conventional methods

Who can help with Programmatic Advertising?

There have been many platforms that facilitate the programmatic buying – Rubicon, Adobe Marketing Cloud, Adroll, Double Click are a few names, among many.

Adobe Marketing Cloud with a gamut of other tightly integrated tools like the experience manager, analytics, media optimizer, audience manager help advertisers to create dynamic ad optimization, target granular audience segments, and efficiently self-service technology for the ad buying process.

Is all well with Programmatic Advertising?

While the RTB and automation in the Programmatic Advertising world have created traction in many ways, there are factors that have bogged it down, and it has not put up with what was expected as it should have. Few analysts and researchers have even claimed that it sacrifices quality over the expense of quantity. There are security threats and brand safety issues that have been arising. Even if we can avoid bots or extreme sites, the long tail of the web is packed with boring & irrelevant content along with the annoying pop-ups. Let’s hope that when AI and ML mature, the programmatic advertising will be flourishing.

Since its inception, programmatic advertising has been extremely beneficial for brands to reach prospective customers in real time. It has made ad buying experience faster, cost-effective and simpler to run digital advertising campaigns. The innovations around the field of programmatic advertising will enhance the targeting and instantly notify advertisers on the needs of their clients. In short, Programmatic Adverting is still in its teenage, and a lot of great things are expected when it matures.

Hope you enjoyed the blog; we shall explain the various platforms to be used to leverage programmatic advertising in the upcoming blogs. Let us know your doubts and queries. Do write to us here.

References:

  1. https://digitalmarketinginstitute.com/en-us/blog/2017-11-29-the-beginners-guide-to-programmatic-advertising
  2. https://www.inc.com/john-lincoln/why-programmatic-advertising-is-the-hottest-new-digital-marketing-trend.html
  3. https://marketingland.com/get-programmatic-primer-programmatic-advertising-94502
  4. https://marketingland.com/digital-simplified-new-advertising-supply-chain-104734
  5. https://www.adweek.com/brand-marketing/programmatic-advertising-failed-to-meet-expectations/
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