Jenny Stanley
Jenny Stanley 20 July 2021
Categories Advertising, Technology

What is Programmatic Advertising?

Programmatic advertising is one of the main growing trends of the last decade and is becoming more and more used by big and smaller players across all industries. Check out this article to learn what it is, how it works and its advantages and disadvantages!

Programmatic Advertising Defined

According to the eMarketer forecast, between 2016 and 2021, more than 320 billion dollars have been and will be spent on this type of advertising only in the United States, confirming its popularity. But, after all, what is the exact definition of Programmatic Advertising?

Also known as programmatic media or marketing, programmatic advertising can be defined as the buying and selling of online advertising inventory or space through automated software, in real-time.

The Advantages of Programmatic Advertising

This method for running ad campaigns brings multiple advantages for advertisers. Firstly, one of the main advantages of programmatic advertising is that it is less time-consuming when compared to traditional methods.

Due to the automated processes used by programmatic advertising, it allows managers not only to have access to real-time and highly accurate insights on their ad campaigns but also to be much more efficient compared to the times where advertisers needed to call other businesses and bargain for advertising spots.

Advertisers can use the saved time by the automated processes to develop and step up their targeting strategy. Taking advantage of the insights provided by automated software, which include geographic location and IP address of the users, ads can be refined and personalized in order to reach the right audience, with the right content, ultimately maximizing the ROI of campaigns.

Platforms for programmatic advertising have also invested in providing tools such as fake bot traffic and pre-rolls ad blocking, so advertisers can effectively stop fraudulent practices, which have been a common issue for many years in the industry.

The Disadvantages of Programmatic Advertising

While we have discussed the pros of Programmatic Advertising, there are still some pitfalls advertisers should consider before investing on a campaign of this type.

First of all, it is expensive to get your ad campaign targeted to a specific audience. Furthermore, even if you reach that audience, it is impossible to guarantee that your audience will respond and interact with the ad, so there is always a certain amount of risk in these campaigns.

Not seldomly, brand safety is also an issue for advertisers. This arises from ads being displayed next to inappropriate, fraudulent or otherwise offensive content, ultimately damaging the image of the advertiser, according to a study published in 2018.

However, it is worthwhile mentioning that ad platforms have introduced tools that give advertisers more control over where their ads are shown. But still, you should keep an eye on this potential issue.

Bot traffic and fake clicks are another threat for advertisers, particularly if they are running a programmatic ad campaign. Even though serious and reputed agencies rarely opt for these strategies, be aware that many publishers may still try to trick you with non-real views and engagement figures. There are, however, some great and easy steps you can take to overcome these fraudulent practices: 

  • It all starts by identifying the source of the problem. You can spot bot activity by paying attention to sudden and unexpected spikes in traffic - particularly on pages with PPC media compared to the rest of your website - or atypical CTR on your campaigns.
  • Protect your website using filters, invisible fields, scripts or captchas. Although some of these methods may be slightly annoying and negatively affect user experience, they will impede bots and automated systems from damaging your campaign’s performance.
  • Major data providers, like Lotame, can help you block bot activity as frequently as possible by generating high-quality metrics. You should also pay attention to who you are targeting. Always avoid aiming to reach broad groups of people, as these are more likely to lose interest in what you are selling and walk away from your campaign.

Programmatic Advertising vs Display Advertising

While they may sound very similar, there are some core differences between programmatic and display advertising that is worthwhile being mentioned. Display advertising usually takes place in closed networks, such as Google Display Network, and even though it is used across 10.8 million websites, it still limits the reach of the ad campaigns when compared to programmatic ads.

This wider reach that advertisers get from programmatic ad campaigns also provides them with a greater volume of user-generated data that is available for analysis, enhancing the opportunities for audience targeting and segmentation.

On the other hand, Display Network Advertising is considerably less costly than programmatic, and still provides advanced targeting tools, huge reach and the process of running one of these campaigns is by far shorter and more simple for the advertiser.

How to do Programmatic Advertising

The first step if you want to run a programmatic ad campaign for your business should be to set your priorities. This includes knowing what you want to advertise, who are you going to target, your goals and the budget for the campaign. You should be careful with proceeding with this type of campaign before knowing exactly why you are taking this step.

You will also need to invest in your marketing team. Programmatic ad platforms - such as AdColony or Zoomd - are mostly automated, but experienced and skilled teams are vital in order to properly manage the data and insights provided by the platforms, as well as to control and maintain the campaign, avoiding the pitfalls mentioned before and protecting the brand.

However, it is important that you understand that programmatic advertising is difficult to get right on your first try, and it is quite common for inexperienced advertisers to commit simple mistakes, which will limit the success of their campaigns. Some of these are:

  • Establishing unrealistic and ineffective KPI’s
  • Making too many changes in the campaign, base on daily metrics
  • Not sticking to the planned budget
  • Ignoring the opinions and advice from experienced digital marketers and agencies

Hire a Specialist Programmatic Advertising Company

The solution for inexperience and beginner mistakes? An expert programmatic advertising company, of course! At Appetite Creative, our team of designers and developers works every day with all types of ad formats - from animated and 360 banners to liquid skins and playable ads - which can all be served programmatically. Therefore, we can guarantee that your campaigns are correctly set up and optimised to help you achieve your goals.

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