Effectively targeting and capturing the attention of a brand’s desired consumer base is no easy task in today’s cluttered digital ecosystem, in which consumers are inundated daily with millions of digital ads displayed on websites, apps, and other mobile platforms. As a result, programmatic advertising has become an immeasurably effective tool when it comes to efficiently buying and selling online advertising. In a nutshell, programmatic advertising is the use of software to buy digital advertising effectively and efficiently. Whereas more traditional forms of ad buying included negotiations, requests for proposals, quotes, etc. programmatic advertising instead uses machines and technology to purchase display space and eradicates the back-and-forth of more traditional media and ad buying. As well, programmatic advertising has made it so that advertisers and publishers no longer need to worry about using separate platforms to advertise on multiple channels while choosing premium placements for your ads. Rather, programmatic advertising takes care of it all in that it acts as an automation to make transactions more efficient and effective by streamlining and consolidating digital advertising efforts into a single technology platform. In the following paragraphs, we’ll dive deeper into programmatic advertising and why it’s become an instrumental tool in digital advertising efforts.
Since programmatic advertising entered the digital advertising marketplace, programmatic platforms have continued to evolve and grow their inventories and databases. This has made it so that any format and all channels can now be accessed programmatically, including mobile, desktop, tablet, digital OOH, connected TV and audio. As a result, it’s an accessible and broad method of advertising that enables advertisers to reach the highest volume of consumers with minimal effort.
In addition to programmatic advertising enabling advertisers to reach many people, it is also a strategic and intentional way to advertise. As opposed to relying on the “spray and pray” method, programmatic advertising employs targeting tactics to segment audiences by using data so that advertisers only pay for ads that are delivered to the right people at the right time. The data pulled that is then used to target and serve ads to consumers includes various identifying metrics such as demographics (i.e. male or female, age, etc.), geography, interests, behavioural trends (i.e. consuming a particular type of content at similar times in the day regularly), time of day, device, and more. Based on this, the programmatic platform uses real-time data to identify the most appropriate online audience for the campaign. The platform subsequently buys digital ad inventory via an auction that is based on all available information across as many devices as possible, in places the chosen audience will care about and engage with the most. Because of this, ads are personalized to the consumer and therefore feel more relevant, which in turn increases ROI and revenue as they are more likely to result in a conversion. Through the process of programmatic advertising, intelligent connections are made, insights are generated, and performance can then be optimized.
While it may sound complicated, the automation is done via computers and algorithms that make ad buying, as well as the placement and optimization of those ads, more efficient while removing mundane activities involved in more traditional media buying. Advertisers are now able to rely on the algorithm that will determine where ad money is best spent and all that’s required at the upfront is to feed your programmatic solution some information about the campaign as well as various KPIs to hit. As a result, time-to-market is significantly pared back which further aids in reaching the highest number of people possible in the most efficient amount of time.
It also has the numbers to back it up. Since 2015, programmatic advertising has contributed over $159 billion dollars to the digital marketing space, with the yearly ad spend continuing to increase year-over-year. Over just a four-year period, the industry will have grown by more than 2.5 times with upward growth trending to continue, accounting for over 85% of all digital display ad spend with about 75% of that being done through private marketplaces or direct setups. This, in turn, offers buyers more control over their spend and their automated buy. It’s efficiency as an ad buying strategy, combined with the large numbers it’s contributed into the digital marketing environment, has made it clear that not only is programmatic buying here to stay but it will remain a central strategy for ad buying across the board for brands.
Now that programmatic buying has been explained from a high-level perspective, let’s dive deeper into some of the benefits that makes it a digital advertising strategy that all brands should consider.
Programmatic advertising has been proven as an invaluable tool for marketers. It enables advertisers to effectively funnel messaging across a variety of platforms, formats, and channels, which in turn allows for quick optimizations and learnings to not only reach the most relevant markets and demographics, but also use the algorithm to highlight potential new opportunities. Because of this, it’s one of the most effective investments an advertiser can implement for long-term benefit. Over time, more meaningful learnings will be devised, which in turn will positively impact optimizations and CPM. Through automation and machine learning, programmatic allows for advertisers to reach the most relevant audiences in the most effective and efficient way so as to ensure dollars aren’t wasted and ROI is maximized. If you’re not already utilizing programmatic advertising for your brand, or if you simply want to learn more, don’t hesitate to reach out via the Contact Us page on our site.
February 5th, 2021
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