Everything You Need to Know About Programmatic Advertising in 10 Minutes

As the head of your marketing team, you have no doubt come across countless innovative advertising tools and strategies that claim to advance your company’s advertising efforts. While there are indeed many which do not live up to the hype, programmatic advertising is not one of them. 

Just consider these revealing statistics: eMarketer predicts that this year in the US alone, $46 billion will go to programmatic advertising, and that by 2020, more than 86% of all digital display ads will be bought via automated channels. The growth of programmatic advertising rings true in Europe as well. IAB Europe reporting that 50% of ad revenue is traded programmatically, with the total market valued in excess of €8bn.

The reason why many companies – including L'Oréal, Kimberly-Clark, and Unilever – are turning to programmatic advertising is that it has proven to be an effective means of boosting the reach and success of targeted ads to previously unseen levels. Moreover, it does away with the need for companies to master the complexities of media buying.

Interested in learning more? Our guide will teach you everything you need to know about programmatic advertising - all in 8 minutes (as we know you’re busy!). Read on, and you’ll discover why you should join the world’s leading companies in implementing it.

What is Programmatic Advertising?

Simply put, programmatic advertising allows you to buy advertising on the internet in an automated way. It optimizes the entire process by leveraging artificial intelligence and real-time bidding to target relevant demographics. Ads on desktop, mobile, video, and social media can all be enhanced using this revolutionary approach to digital advertising. It is even weaving its way into television advertising as well – a testament to its enduring appeal to publishers and advertisers alike. 

Think of it as a much-needed overhaul of traditional methods of managing and monitoring your online ad presence. 

How it Works

To best explain how programmatic advertising works, it is helpful to consider how online advertising works without it. Without programmatic advertising, you actually have two options that you can either choose from or combine:

The first one is to manually insert ad buy orders, and maybe even involve yourself in human negotiations. You will also need to decide for yourself which ads to buy, how much to pay for them, and which audiences to target while in the same time having very limited target options. That’s not to mention all of the trial and error you will need to undertake to pinpoint what’s working – and what’s not.

The second option is to use digital advertising platforms such as Facebook Ad Manager & Google Display Network. If you choose this option, you will need to establish a different strategy for each channel, prepare relevant content for each channel, and create adaptations of creatives for all the platforms you will be using. In order to achieve all of this, you will need to split your resources and optimise your campaign across platforms which is a daunting task is terms of normalizing the output from different platforms in order to be able to do it. 

Needless to say, it can be cumbersome, time consuming, and costly to manage this all, especially if you are unfamiliar with the ins and outs of each platform.. 

In contrast, programmatic advertising utilizes machine learning and intricate algorithms to not only automate these processes, but to make them exponentially more accurate and targeted. As Techfunnel explains, such algorithms “provide real-time data to marketing managers allowing them to optimize campaigns to appeal to audiences better. With this data, a marketing manager can make better, more informed decisions when it comes to campaigns and their target audience.”

The use of technology adds substantial value to the optimisation of campaigns and their final results. However, programmatic advertising isn’t magic - a human touch is still necessary to choose the most relevant demographic data for each audience and to successfully take the project from start to finish. 

Key Terms & Definitions

In order to understand what programmatic advertising entails, it is essential that you wrap your head around some key terms and definitions. Unfortunately, these terms can be a bit confusing to the newly acquainted. To eliminate any confusion, we’ve put together a basic rundown of five fundamental terms you will come across:

Demand-side platform (DSP): A software platform that allows brands and agencies (buyers) to bid and buy online ad placements in real time.
Supply-side platform (SSP): A software platform that allows publishers (sellers) to manage their ad space inventory.
Data management platform (DMP): A software platform that collates data that both buyers and sellers can use to optimize the buying and selling of ads respectively.
Publishers: Otherwise known as ‘sellers,’ publishers are those who offer their website or other forms of media for advertisers to buy ad space on.
Ad server: A server which analyses data to determine the most ideal ad to deliver each user who visits a given site. Ad servers then deliver the selected ad to the user to view. 

If you’d like to learn more terms, we recommend you take a read of this glossary by Ad-Tag Macros, which is consider the go-to glossary to refer to. 

Finally, it is important to note that when we refer to  programmatic advertising we mean every type of ads except from Search Ads e.g Google Adwords search, Bing search, Yandex search, etc.

Advantages of Programmatic Advertising

Now that you’re more familiar with what programmatic advertising is, you’re likely wondering whether or not it’s a worthy investment for your company. 

Many companies have been enticed by the fact that it streamlines the process of generating more relevant online ads to the right audience. As aforementioned, instead of needing to manually manage and monitor your media buying, programmatic handles this process in a substantially more efficient and targeted way. You could, of course, spend time and resources crunching complex numbers trying to strategize how to improve the effectiveness of your media buying campaigns. 

However, programmatic does so for you in a far more sophisticated manner, namely, by drawing on AI insights and automation to ensure greater relevancy of where your ads appear and also the audiences who see them. In the words of MarTech Today, “Programmatic offers advertisers the ability to incorporate large amounts of data, sometimes from multiple sources, to serve users with ads that are more likely to be relevant based on psychographic, demographic, behavioral and intent signals.”

Another advantage of programmatic is that it allows you to accurately track each step of a visitor’s decision making journey and subsequently serve relevant content to them in the form of storytelling.

Furthermore, it encourages companies to become media agnostic - that is, programmatic pivots the focus from media traffic and cost to consumer behavior, and thus targets prospective customers more effectively.

Finally, there are so many more creative options within programmatic advertising that help in increasing visitor conversions. Instead of just relying on the limited creative specs of Google Display, there are a variety of rich media creatives you can draw on to entice users to click and engage.

Can I do Programmatic Advertising by Myself?

Needless to say, when programmatic is executed well, you can expect an increase in conversions from the right audiences, and a decrease in wasted time and money. But unfortunately, despite the efforts they make and the money they spend, many marketers don’t have the in depth knowledge of programmatic required to achieve optimal results. 

This is because they may be experts in a number of areas - but they fall short in the particular skill set required to be successful in programmatic advertising. In fact, research by Tailwind found that 39% of marketing executives believe that a skills shortage is holding back programmatic growth.

That’s why it’s so important to get programmatic advertising right from the start. If your efforts so far have been far from fruitful, or you’re in need a bit of expert direction, keep reading... 

Why Should I Consider Hiring an Expert to Implement My Programmatic Advertising?

Building programmatic in - house would require an investment in hiring & managing talent (fixed costs), upgrading your technological capabilities and committing resources from many departments within your company (especially the IT & marketing  departments).

In addition, this would require a steep learning curve and many hours of work until the Programmatic team is fully functional and the first results are actually achieved. Even then, your in-house team will not have the opportunity to run multiple campaigns in different industries and continuously update their Programmatic knowledge to stay up to date.

Hiring experts to run programmatic for you means that you can use their experience, resources, specialisation and technological capabilities -right away- and achieve remarkable results through programmatic in a fast and much more cost efficient way. 
Moreover, as the time passes and the experts immerse deeply in your business, you can expect a lot more innovation and best practices implemented for you and a competitive edge achieved much sooner and without any trial and errors in the the process.  

Although many digital agencies claim to have experience implementing programmatic advertising campaigns, few have the proven expertise and operational knowledge of our digital marketing agency, Base Element. We believe that programmatic requires more than just a “watch and wait” approach – we tailor each and every client’s programmatic advertising to fit their particular needs. 

We understand that trying to navigate everything by yourself can be a bit of a minefield, which is why we focus on removing the complexity of leveraging this powerful field of marketing. Not only will our in-house data experts offer you in depth data insights, our team of strategists will also empower you with the knowledge necessary for you to  more accurately target your clients, as well as impact their decision making.

What’s more, we always make use of the most advanced platforms to ensure that we are helping our clients to obtain the best results from their investments. As such, Base Element offers programmatic through Adform, an advertising technology platform that was recently positioned as a Leader in the Gartner Magic Quadrant for Ad Tech in 2018. In addition to the general advantages Adform provides for programmatic advertising, it also allows us to achieve more pinpointed targeting by executing industry-leading real-time audience re-classification. 

If you want to find out more about the programmatic advertising solutions we can offer, contact us today. We’ll work with you to help strategize and implement the right approach to programmatic advertising for your company.