Why Programmatic Advertising Will Be the Future of Media Buying

Why Programmatic Advertising Will Be the Future of Media Buying

Programmatic advertising or programmatic display advertising is the process of automating planning, buying, and selling ad inventory.
What is Ad inventory?
It is an online space available for advertisements.
Traditionally, ads were done manually.
Before programmatic advertising, advertisers had to coordinate with the sales team for

  • Proposals: A document that proposes procurement of online ad space
  • Bidding: It is a specific price offered at an auction
  • Quotation: It is an estimated price to the customer
  • Negotiation:It is a discussion between the brand and the ad space owner or an agency regarding sale and purchase of online ad space.

After incorporating a programmatic advertising platform, the software is used for purchasing digital advertising. Through this platform, you can prepare an insertion order or an ad tag.
Insertion order is a written authorization or a confirmation todisplay an ad. Generally, it includes,

  • Information on date of insertion
  • Number of insertions in a specific period
  • Ad format and size
  • Ad placement or location

IO is traditionally called a purchase order.
As you can see, traditional advertising was a labor-intensive task. The programmatic advertising platform can efficiently take care of routine tasks like:

  • Distributing insertion orders to publishers
  • Tracking and record-keeping of ad tags

When these routine tasks are automated, your team can focus on

  • Optimizing personalized campaigns
  • Planning strategies for scaling

How does programmatic advertising work?
Once an ad is bought with programmatic advertising, then the machine learning algorithms evaluate user data, on the following basis:

  • Behavior
  • Engagement level
  • Social engagement
  • Location
  • Time per visit

This analytical data helps the system in planning and determining which ad content needs to be delivered to a particular user. According to the data, the ad is displayed on the page. The goal of the advertisement is to compel the user to click on it.
Suppose a person is interested in browsing the internet for vegan diets and reads a related blog. The system captures the data and displays an ad related to a vegan diet and products.
Thus, by niche targeting an ad to a specific user, programmatic advertising can increase the efficiency of an ad campaign.
Programmatic advertising is an effective process for the following reasons

  • It’s trackable and measurable
  • Extends the reach
  • Diversifies the revenue stream

Programmatic advertising harness the power of data and predictive analytics
It is well known that consumption of content is now mostly digital. Hence the increased need for programmatic advertising platforms.

Offline media has now turned to programmatic too. For instance, consider the display boards outside stations and malls. Large billboards too. They can also be programmed.

Due to the highly precised targeting, programmatic advertising generates good leads. Through a programmatic advertising platform, you can use Artificial intelligence to match the ads to your target customer profile.

Programmatic advertising is next-level marketing.
Increased personalization always results in higher returns.

Customers are more attracted towards a personalized experience when they are viewing ads. Brands must be able to recognize and collect deeper insights into user behaviors and desires. Over the next few years, most of digital marketing will be towards  programmatic advertising.

Programmatic advertising leads to a scenario similar to the one described below.

  1. A brand has an online page with product ads configured for programmatic advertising and advertises to target audiences.
  2. A potential customer shows interest in a particular product and sees the relevant ad, which has a discount coupon for it.
  3. The customer clicks on the ad and may make a purchase.
  4. But if the customer exits the page without placing an order, the company can send that visitor a reminder email with a personalized discount coupon.

This systematic approach will allow the brand to be in front of the prospect during the golden hour of interest.

Factors to consider before Getting started
Before adopting programmatic advertising, it is essential to analyze through these three vital factors:

  1. ROI
    It is necessary to set an upper limit before starting the bidding process to control the spending.
  1. DATA
    You need to have the required skillset to continuously monitor and analyze customer information that is used for major decisions and strategies.
    There has been exponential growth in the use of mobile devices. So ensure that your ads are mobile-friendly. So before releasing the advertisements, thorough testing on mobile-friendliness is essential.

Programmatic advertising is highly precise, and niche targeted digital personalization. The marketers need to have the right skill set to execute such a specific campaign, and a high ROI is guaranteed.

Due to the improved personalization and better ROI, more and more brands are adopting programmatic advertising to boost their marketing plans.

What is programmatic direct?
Programmatic direct utilize one-to-one interaction between advertiser and publisher. It is quite similar to the traditional process of buying ad space but with technology enabled.
A technology enabled advertising platform is used for automating the delivery and tracking of the campaigns.

What is programmatic TV advertising?
As the name suggests, programmatic TV advertising is a technology-enabled method of buying and delivering ads against regular TV content.

Television media is a vast market.

Connected TV means watching TV content over the internet.

The immensely popular Netflix and Amazon are giving direct-to-consumer services. This has drastically changed the consumer expectations around ads. This could pose a threat to the traditional ad model.

Hence, advertisers have started targeting ads through the programmatic TV advertising platform.

Currently, 58% of advertisers have incorporated programmatic TV.

What is programmatic native advertising?
Native programmatic advertising is native advertising with technology that enables advertisers to make native ads more precise and target-oriented.

Native advertising refers to advertisements within the content. They look like part of the content flow.

Native ads are highly compelling. Hence people tend to click on it at a higher rate.

Let’s take a look at the current statistics

  • Global programmatic ad spending in Southeast Asia’s top six markets will surge in the next several years.
  • 65% of Digital Media to be programmatic in 2019, forecasts zenith.
  • In 2018, programmatic accounted for 70% of digital display ad spending in Germany, reported emarketer.
  • As per e Marketer, total programmatic ad spending will escalate to $69 billion by 2020.
  • About 42% of marketing executives believe  skills shortage is holding back programmatic growth.
  • By 2022, 82% of all campaigns will be automated
  • 80% of B2B marketers indicated they currently buy or sell advertising pro grammatically.

Media buying through programmatic channels is on the rise. Big brands, digital media, and multimedia houses have adopted programmatic advertising solutions.

Why is Programmatic advertising a smart decision?

  • Focused target marketing
  • Ad Optimizations
  • Smarter way of building strategies
  • Cost reduction and speed
  • Increased audience reach
  • Digital OOH Advertising Expansion

Programmatic Vs. Display network advertising?

Wider Reach
Since we know that display networks are closed advertising ecosystems, they are limited to the websites that are part of their system. Programmatic advertising is a platform that covers inventory from multiple ad exchanges. This platform supports a considerable list that expands the advertiser’s potential reach. With programmatic advertising, ads can be seen by far more people than ever possible on a display network.

Type of ads
Native programmatic ads do notfeel or look like ads, unlike display ads. Native ads are designed to fit seamlessly into the design of the web page they appear on, thus helpingto boost customer engagement and brand awareness. Native programmatic advertising can supercharge performance marketing results.

Programmatic advertising provides a broader range of optionswith respect to retargeting. This is due to the volume of user-generated data that is available for analysis. Unlike display networks, with programmatic, the advertiser is not limited to the websites in the system, so there is far more opportunity for audience segmentation and retargeting.

Speed and ROI
An advantage of programmatic advertising is the automated, real-time nature of ad buying. This makes the whole process faster and more efficient. Programmatic advertising uses a central dashboard where marketers do ad buying and analyzing activities. Programmatic advertising platform enables advertisers to bid in real-time for the best ad placement at the best price.

Programmatic Advertising Market Size
According to a recent study,78% of marketers said that they spend a tremendous amount of advertising budget on programmatic advertising in as far back as 2015

This is a  significant amount of digital spend.

The popularity of mobile programmatic ad display is growing exponentially in the market. The increase in the market share of programmatic advertising is related to the growth in the mobile web. Programmatic advertising in mobile web applications was valued at USD 3.46 billion in 2015. The mobile network is expected to supersede mobile apps in terms of programmatic advertising, which will further lead to the growth throughout the forecast period.

For instance, if a brand has a 20% conversion rate, 80% of website visitors have not completed a call to action.

A  majority of these visitors need an extra push to complete the call to action.

If you retarget these people with ads that bring them back to your website, you can ensure that you are providing a good ROI on your programmatic ads.

What Lies Ahead?
Demand for programmatic advertising videos is going up. According to statistics, by 2022, 78% of all US digital video ad budget will move programmatically.

Is there any strategy you feel lacking in advertising, and you want it for your programmatic marketing campaign?

How would you feel if you put your money into the programmatic advertising system and see your campaign’s performance, immediately?

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