The Emergence and Necessity of Programmatic Advertising in 2020

Jun 18, 2020

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Over the years, programmatic advertising has remained the center of attention in the realm of ads. However, what constitutes programmatic advertisements often befuddles people. Technically, programmatic advertising is the practice of utilizing bots to purchase ad space that depends on a multitude of prerequisites.

To use this type of advertising, advertisers define the traits of their perfect target audience. Simultaneously, advertisers take care of accessibility parameters of ads as well as suitable budget allocation. Now, it might come across as straightforward, but there are always new challenges when the latest marketing trends emerge.

It is true – programmatic advertising has come a long way. In fact, modern advertisers view remarketing as an outdated practice. Contrary to naïve misconception, programmatic advertising can be functional for B2C and B2B brands. Programmatic advertising is the shiniest, exciting, and newest ad practice in the marketplace.

Programmatic Advertising in the Age of Digitalization

Currently, there are multiple methods to execute programmatic ads. At the same time, there are numerous ways in which users get fooled by misplaced programmatic ads. For the most part, the advertising world continues to acknowledge and brace itself for endless new possibilities.

Most companies, for instance, make the most out of display form of programmatic advertising. It is a category that offers a lot of benefits with a minimal amount of risk. Sure, it can be tricky to decipher some of the most complex differences within programmatic advertising. However, simplification of these kinds of ads was never a good idea.

Several companies purchase programmatically but focus on fixed CPA to save added costs. Other companies, on the other hand, like the demand and supply-side of the advertising platform that provides an enormous amount of data. And that leads to the execution of retargeted campaigns. Nonetheless, programmatic advertising is less messy and offers instant results.

Today, programmatic advertising allows you to execute campaigns through inventory and various ad exchanges. Apart from dynamic CPM, you can gain access to a wide array of third-party sources that contain resourceful data. Furthermore, you can assign bids in terms of value across numerous variables such as audience, time, device, or total creative size.

Common Programmatic Advertising Terminologies

Although there are hundreds of programmatic ad terminologies, you only need to know the ones that matter the most:

Ad Exchange: It refers to a digital or computerized marketplace where you can purchase and sell ad space. It connects DSPs (Demand-Side Platforms) with SSPs (Supply-Side Platforms).

CPM – Cost Per Mille: It refers to the price of a thousand impressions of a displayed ad on a specific website.

CPA – Cost Per Action: It accounts for the average cost of a predefined act that involves website time, clicks on a certain link, or total conversion rate.

CPC – Cost Per Click: It refers to the average cost of total clicks on a specific ad. It is also a separate billing model than CPM.

Ads.txt: Ads is an abbreviation of “Authorized Digital Sellers.” The nature of this file is in the form of text, which allows a publisher to record who can and cannot sell inventory. Mostly, the .txt file is amalgamated into various programmatic platforms and offers buyers more transparency.

RTB – Real-Time Bidding: It is an act where the bidding takes place in real-time. It comprises a usual bid request followed by a response. RTB comes into action when one or more users pay a visit to a website page. What’s more is that advertisers can request and then purchase data pertaining to browser history, site functionality, device type, and user geographical location through an SSP. The connection of a DSP to an ad exchange leads to a data offering response at an appropriate price. Consequently, the highest bid over the placement of the ad essentially wins for distribution. The entire process is automatic and occurs in a span of milliseconds.

There is More than Just One Type of Programmatic Advertising

When it comes to programmatic advertising, there are three main types:

In-display and Video Ads

In-display or video ads are arguably the ones companies want to use the most in today’s competitive advertising marketplace. Typically, you can see the ad on YouTube’s feed at the top. In-display ads are not like out-stream or in-stream ads because there’s no autoplay function. It is up to the user to make a choice.

It is no secret that video ads are extremely versatile. Several car owners, for instance, often see the ad of the car while watching a show on Hulu. That said, you can display video ads pre, mid, and post-roll.

No type of programmatic advertising is more popular than video ads because it allows you to get recommended ads on each video on a platform such as YouTube. Also, the labeling on video ads is much clearer.

It is vital to note that you can only display in-stream ads inside a particular video. Usually, it happens when a prominent YouTube influencer identifies the sponsor of the uploaded video. Unlike out-stream related ads, post-roll-based ads play once the video ends. You can display out-stream video ads on webpages and inside articles.

Audio Ads

If you regularly listen to podcasts, you’re not new to listening to countless ads after every half an hour. Audio-based programmatic advertising allows networks like Slat to select ads based on personal care and home lifestyle. However, ads could also be about hair dye or meal kits. Spotify, for example, is another platform that uses audio ads.

Programmatic ads that function on social media websites gather data from relevant ads to enhance the overall experience and place ads that cater to online users. Mainly, it depends on accumulated data as to who will get to see the ad most times. The timing and format of these ads, however, could vary significantly.

For example, if you’re a soccer fan, a social ads application will show you the ads based on your internet search history related to soccer. When influencers execute social ads, the process still is the same. A programmatic influencer determines other influencers, gets in touch with them, and then initiates the automation of the campaign.

Programmatic Advertising: Why is It So Successful?

Machine learning and big data are changing the game for programmatic advertising. In fact, most of the ads you see today are programmatically advertised. It means more brand conscious companies want accurate profiling of their target audience, and programmatic advertising makes that possible.

Mainly, executing targeted ads that you can display for solely interested people is a wonder in itself. It’s not a dream born out of thin air. It is a reality that is helping advertisers grow the economic output of companies. Besides, the usefulness of, say, programmatic video advertising is pertinent to the future of the online digital marketplace.

How to Make Programmatic Advertising Work in Your Favor

Confused about the countless factors associated with programmatic advertising? Here’s how you can make it work:

Determine a Realistic Budget: Just like those other online advertising programs, programmatic advertising also functions on cost-per-click (CPC) or cost-per-impressions model. It means you can practically gain complete control over how much you want to spend based on your budget or expected results. If you want to execute a successful programmatic ad, you will have to run an awareness campaign that speaks to your brand. Therefore, consult with your agency partner as to what kind of budget model would be suitable.

Broaden Your Target Market: Reach for the stars and cast a big net to optimize the search results of your target audience. You should have preconceived expectations and historical knowledge that makes up your target audience prior to launching a programmatic ad campaign. After that, keep that information with you to further segment and build your target audience. Remember, the goal is to confirm your preconceived expectations and then match realistic expectations. It’s a process where you can rely on your instincts and realize the missing pieces.

Take Special Care of Creative Copy: An ad won’t automatically appeal to your target audience unless it has a captivating content. So, you will need to draft a creative copy that you can use in various multimedia formats. Whether you use audio, video, or social programmatic ads, make sure the intent of your creative copy is clear to the target audience. Also, you should create specific guidelines such as file format or dimension to stand out in the online marketplace. It is vital to understand that your creative copy should complement your entire online advertising strategy. It means you should use a singular tone that would ultimately become your trademark style.

Combine Your Ad Channel with Campaign Goals, Content, and Target Audience: It is of utmost significance to combine your channel with different elements of your programmatic advertising campaign. It’s not going to be simple where you can just click a few buttons, and you’re good to go. Instead, channel performance varies because of the diverse demographics and the type of content you’re trying to promote to your target audience. In simple terms, your campaign goals don’t necessarily have to apply to all programmatic ads. For instance, some of your content might work perfectly with a video ad, whereas other content might perform well with social ads.

Push Pixels to Its Full Capacity: From executing a consideration to a direct response to the market awareness campaign, you must be able to set-up a conversion tracking mechanism. Subsequently, you can retarget from relevant segments of your site. Also, you can build lookalikes for your future campaigns. For example, if you intend to start an ad campaign to get more form submissions on your site, a display ad on TV is arguably not a wise choice. It won’t just increase your direct traffic, but also garner high CPMs than other campaigns. That said, if you want to run an awareness campaign, you will need to inform your target audience on a particular product you plan to launch, and then opt for a display ad on TV. Nonetheless, make sure the images or videos you use on awareness or consideration campaigns have high frame rate pixels.

Don’t Hesitate to Ask Tough Questions: When you choose a programmatic advertising agency, don’t hold anything back and ask tough questions. For starters, ask about ad exchanges, access to third-party sources, use of numerous variables, and adjustment of bids. Furthermore, you should also ask whether or not you will have direct access when it comes to ad exchanges. Also, find out if your agency partner can function with a DSP. Similarly, ask about their invoice approach (i.e., fixed CPM or CPM). After you choose a reliable agency partner, make continuous efforts to optimize your ad campaigns. Furthermore, inquire about insight from competitive companies who are executing similar ad campaigns. Lastly, have a contingency plan in place for every ad placement.

Programmatic Advertising: Features, Benefits, and More

The type of programmatic ad you run will offer different benefits. For instance, if you deploy an audio programmatic ad, you will have to take unique precautions to ensure its success as opposed to a display programmatic ad.

Regardless of your ad choice, here are the most standard features and benefits that come with programmatic advertising:

Ability to Tailor Your Campaigns: With programmatic advertising, you have the freedom to tailor the content of your ad and even modify the parameters to increase the buying process altogether. It’s easy, quick, and doesn’t involve extraneously long negotiation meetings.

Multi-channel Reach: Programmatic advertising, in the end, depends on data. As a result, it allows you to reach different multimedia channels and cater to your target audience through desktop, mobile, and TV ads.

Generate Quantitative Reports: The vast majority of digital ad space exists because of extensive reports. These reports highlight the data variables and communication efforts. There’s no such thing as blindspot when it comes to programmatic ads. It means you can utilize the data to figure out the success rate of your programmatic ads.

No Virtual or Physical Deals: With programmatic advertising, you don’t have to have real-life conversations with users. In fact, the algorithms take care of most of the work. Gone are the days when you had to build an expensive sales team to build long-term direct relationships. Programmatic ads use algorithms that make data decisions in the blink of an eye.

Reach Out to Target Audience with Higher Accuracy: One of the most defining features of programmatic advertising is the segmentation of your target audience down to the very last detail. It is entirely up to you how deep you want to jump in the rabbit hole. Popular ad slots, for instance, conduct a rigorous amount of research and assign a multitude of parameters to reach out to their target audience. It’s not magic; programmatic advertising just offers you complete behavioral data to pinpoint your target audience and show the ad that can bring results.

Programmatic Advertising: Stats and Figures that Will Surprise You

In 2019, the total market size of Digital-Out-Of-Home (DOOH) advertising amounted to $6.7B.
Programmatic ad inclusion on collective podcast advertising accounts for more than 50%.
More than 74% of the $32.5 billion programmatic in-display ads spending is because of private set-ups in the U.S.
$33 billion: there’s a general estimation that total spending of programmatic in-display ads will account for $33 billion after 2019.
In 2019, the total amount of in-display ads was worth $46 billion.
Today, the programmatic video ads on TV amount to $600 million that is significantly higher than 2016’s $450 million.
Almost eight out of 10 mobile-based in-display ads are bought programmatically in the U.S. The ratio is expected to increase by at least 85% in the next year.
There’s a good estimate that approximately $10.9 billion will go to waste because of unnecessary spending on lower quality of in-display ads until 2021.

Making Programmatic Video Ads is Easier than You Think

If you’re planning to run a programmatic video ad campaign, there’s nothing in the way that can stop you. You don’t have to be a genius to set up the basic parameters of a video campaign. You can use hundreds of different templates that are available online for free.

Here are some essential steps you should take to get results from your video ad:

Place Your Ad Correctly: Your video won’t function with each type of ad. So, make sure the placement of your video ad beforehand. It means a video ad that is suitable for the out-stream might not be compatible with in-display.

Make it Short and Sweet: The shorter the ad copy, the more attention it would be able to grab. Naturally, you want your message to get across your target audience with as much clarity as possible.

Heighten the Entertainment Value: When it comes to out-stream and in-stream related ads, you’re practically fighting for more user attention. So, try to increase the entertainment factor of your ad content to make it catchier. For instance, a captivating opening is crucial to entice users to watch your video ad.

Don’t Divert from Your Target Audience: The content of your video ad has to come across as valuable to your target audience. The trick is to create a programmatic ad that specifically appeals to your audience. In fact, think of the parameters of your target audience when you’re selecting a video template. Additionally, take into account the color palette, soundtrack, and content script of the video.

Pay Attention to Programmatic Advertising Trends

Activation of voice-based ads is going beyond smart devices in homes.
The integration of artificial intelligence in programmatic advertising will become normal.
Omnichannel programmatic advertising is gradually becoming a standard in the digital marketplace.
There’s a higher amalgamation of DOOH or Digital-Out-Of-Home with the location of mobile data.
Podcasts, audio programmatic, TV programmatic are ready to grow.
GDPR is not an enemy but a friend of advertisers.
Though the personalization of programmatic advertising will stay relevant, the concept itself will evolve in the future.
Wearable devices are already augmenting programmatic advertising.
Ads.txt and blockchain will protect programmatic advertising.
5G will usher a new era of programmatic advertising,
There will be a more sensitive and customer-centric approach to programmatic advertising.

A Perfect Partner: Hive Art Media

If you’re starting a new marketing campaign, you will need a reliable partner by your side to help you understand programmatic advertising in its entirety. So, pick a perfect agency partner that can help you make the right decisions and simplify complicated tasks.

Conduct basic research and then compile a list of questions that you want to ask. Your ad campaigns deserve an efficient and reliable partner that can get you through hard work. Programmatic advertising, after all, is the most effective ad approach for your business to target users with more precision in the all-new digital landscape.

Conclusion

The idea that a program can undertake a vast amount of user data and utilize it to bid in real-time will never get old. It is no wonder most brands want to display their ads to the target audience that perfectly fits the profile.

When it comes to Google pay-per-click ads, the one who bids the highest wins. In fact, the entire process takes place in a time that takes to load to load a web page. Besides, machines are becoming more efficient in increasing the communication efforts and utilization of data.

In essence, advertisers can now wield power to place your ad in front of the ideal individuals. After that, it is only a matter of time before flawless targeting boosts your overall conversion rates and decreases the acquisition cost. There’s a good chance programmatic advertising will continue to grow in the foreseeable future.

It takes a lot of effort to master programmatic advertising. Follow us to find out more information on how to learn this game-changer advertising form.