Programmatic advertising will help you reach audiences with precise targeting and efficiency, allowing you to make the most of your advertising budget.

Programmatic advertising uses automated buying, targeting and personalization of digital ads to help drive better results.

Reaching and engaging new customers can be challenging for businesses as the digital advertising landscape grows increasingly complex. Many marketers work with lean budgets and are under ever increasing pressure to attract new audiences.

Programmatic advertising offers a way to target audiences based on demographics, interests or online behaviour. With programmatic spending predicted to surpass US$1 billion in 2024 on display ads alone, this advertising method is worthy of investigation.

Understanding programmatic advertising

Overall, the idea is similar to placing a traditional ad, but instead of paying for advertising space in one medium for one ad, your ad can be delivered to relevant audiences in multiple places at scale through automation and algorithms.

Programmatic is well-suited for businesses that require targeting to reach diverse or niche audiences or those looking to leverage a cost-efficient new channel.

How programmatic advertising works

Let’s walk through the process of how this advertising method works and what factors make it both efficient and cost-effective for businesses wanting to add to their digital marketing strategy.

In programmatic advertising, ad buying is handled automatically and through algorithms for impressive speed and insights. You can set criteria to indicate the type of people you want to reach, the type of ad placements you’re interested in and your budget.

Once you’ve done so, bidding on ad space based on your chosen parameters begins, and the highest bidder’s ad will be chosen for display. It’s like a high-speed auction happening behind the scenes, faster than you could process these transactions manually.

User data, such as interests, browsing history and demographics, are all used to determine who sees your ads. The algorithms that drive programmatic advertising can calculate who would most likely be interested in your ads and ensure they are delivered accordingly.

With this level of personalization, it’s possible that you may see or hear different ads than other users when viewing a website, watching a YouTube video or listening to a podcast.

Analytics will show you how your ad campaigns perform so you can adjust and optimize them in real time. This helps ensure that your campaigns stay within budget and can be improved for the best results before the campaign is over.

Types of programmatic advertising

While it’s helpful to understand the impact of the automated process that makes programmatic so efficient, it’s also important to learn what types of ads are possible and where they can be placed.

You may have encountered some or all of these types of programmatic ads:

  • Display ads that appear on websites and in apps.
  • Native ads that align with the content they appear with for greater impact.
  • Video ads on websites, apps or other platforms.
  • Audio ads in your music streaming platform or favourite podcast.
  • Social media ads on platforms like Facebook, Instagram and LinkedIn.
  • Digital out-of-home displays, such as signage or billboards in public places.

These channels offer unique ways of getting your ads in front of valuable audiences to boost brand awareness and raise your visibility with potential customers. This approach also drives website engagements and actions. Programmatic is not only for increasing awareness. It can also work on performance marketing. Performance marketing allows advertisers to pay only when they achieve measurable results, disrupting traditional pay-before-you-go methods with a more cost-effective and results-driven solution.

Key benefits of programmatic advertising

The power of automation can speed up the ad buying process, but the ability to tailor ads when served to a particular audience is critical to programmatic advertising.

Programmatic ads drive benefits through:

  • Improved targeting and precision

The positive impact of an ad reaching a potential customer at the right time via the right channel with the right message is enormous. Programmatic advertising helps you optimize your advertising by boosting each aspect via careful targeting, timing and placement.

  • Contextual advertising

Tailored content allows you to deliver ads promoting a product or service relevant to the content in which it appears. Imagine an ad for a wellness company being shown to users of an app geared to health and fitness. The ads appear while people engage in related activities or consume relevant content for the best response.

  • First party data

Programmatic advertising allows you to use first party data, which is data collected from consenting users regarding their online behaviour. Gathered directly from customers and users, this data provides the insights needed to create personalized customer experiences for anyone encountering your ads, resulting in greater impact.

  • Higher engagement and conversion rates

These are key metrics for advertisers as they demonstrate that ads are reaching more people who have been influenced to take a desired action with your company. These numbers tend to increase when your ads reach potential customers who fit your ideal parameters and are interested in the content in your ads.

  • Reach and efficiency

You can target audiences at scale on the open web across devices and control all your media buys in one place. You don’t need requests for proposals and signed IOs from each different publisher.

  • Data driven insights into campaign performance

With detailed data insights to help you understand exactly where your advertising dollars are spent, programmatic advertising offers appealing transparency. You can view ad placements and audience views to measure your campaigns’ effectiveness.

Leveraging programmatic advertising successfully

Step-by-step, here is how to ensure your programmatic ad campaigns are as successful as possible:

1.     Outline your objectives

Clearly outline what you want to achieve with your campaign, whether you want higher brand awareness, lead generation or sales. This helps align strategies and focus efforts effectively.

2.     Define your programmatic buy method

You’ll want to explore different buy methods available and decide if you want to use Programmatic Guaranteed, Preferred Deal, Private Marketplace or Open Exchange.

3.     Decide on metrics

Identify specific key performance indicators (KPIs) that directly reflect your objectives. You may prioritize metrics like viewability, click-through rates (CTR), cost per click (CPC), cost per acquisition (CPA) or return on ad spend. These metrics will guide you in campaign evaluation and optimization.

4.     Set a budget

Determine a realistic budget aligned with company objectives and KPIs. Programmatic allows flexibility, but having a clear budget helps manage spending. Ad costs vary depending on the value of the ad placement, but you should be able to find ways to leverage this method, no matter your budget.

5.     Learn about platforms and partners

Research demand-side platforms (DSPs), supply-side platforms (SSPs) and data management platforms (DMPs) that align with your goals and target audience. Explore how different components work together. For example, ad exchanges are where DSPs and SSPs buy and sell ad inventory, and ad servers place the ads. (Note that there are no manual insertion orders or invoices on programmatic sell-side as they have their own DSPs.)

6.     Craft content for different channels

Develop engaging ads with visuals and messaging optimized for various formats and platforms. Adapting content to suit different channels maximizes engagement.

7.     Use audience targeting and segmentation

Use data to segment your audience based on demographics, behaviours and preferences. Tailor your messaging and targeting to these segments for more impactful ads and better performance.

8.     Optimize ads

Monitor campaign performance closely and make data driven adjustments as your campaigns are delivered. Real time optimization ensures your ads are always performing at their best.

9.     Ensure privacy compliance

Follow privacy regulations and ensure data handling complies with legal standards. Prioritize consumer privacy and data security in your campaigns.

Following these steps helps create a streamlined approach to your programmatic advertising, ensuring campaigns are aligned with company objectives and implemented successfully.

Tips for marketers new to programmatic advertising

While programmatic will continue to be a significant component of marketing strategies, some businesses may still be waiting to move ahead.

Bonus tips for those just starting out with this method of advertising:

  • Set aside time to learn the terminology and platforms.
  • Monitor campaigns to avoid wasted spending.
  • Look for transparency about where your ads are placed and why.
  • Ask partners about ad guidelines and how to avoid undesirable placements.
  • Find a trusted resource to advise on privacy concerns.
  • Watch developing trends and technologies to stay competitive.
  • Expect to review, refine and adapt your campaigns as you learn.

Programmatic advertising can help you reach the right audience at the right time with the right message while making the most of your resources.

Ready to create or refine your programmatic advertising strategy? Book a consultation with a programmatic expert to learn more.