Programmatic Advertising explained simply
The 4 key players
The aim of the game is for advertisers and customers to find each other seamlessly online. Publishers and Ad Exchanges help achieve this by presenting relevant ads online based on market research and user behaviour.
Advertisers
Publishers
Ad Exchanges
Customers
What is Programmatic Targeting?
There are a number of ways you can choose to target your ads with programmatic advertising to achieve better accuracy and results.
These are the most common ways advertisers use to target their ads:
Contextual Targeting
Serves ads based on the context of the website.A sports apparel company may target a basketball blog whereas a dog food brand may target a pet website.
Data Targeting
Serves ads based on the user's cookies (which tracks behaviour) rather than the context of the current page. Also known as ‘Audience Targeting’.Whilst the user may be on a basketball blog now. As they were previously looking at pet care websites, a dog food brand may appear in ads found on the sports website.
Geo-Targeting
Serves ads based on the location and language of the user. Also known as Location-Based Targeting or Geo-Fencing.A storefront in Paris is unlikely to advertise outside of the country and their ads would be wasted on those who don't understand French. Setting parameters by location can account for this.
Keyword Targeting
Serves ads to relevant articles/pages based on your assigned keywords.A hiking shoe brand may want to appear in articles relating to footwear and the outdoors but would be mismatched in a page about tennis shoes.
Retargeting
Serves ads to pages users may have previously visited or shown interest in based on cookie tracking.A user that browsed through hiking shoes but did not complete a purchase may receive and ad for that online shop at a future time.
Programmatic step by step
Customer clicks on the webpage
Webpage publisher places the ad impression up for auction
The ad marketplace holds an auction between competing advertisers for that impression
The highest bidder wins the right to display their ad
Ad is served to the customer
Ideally, customer clicks on the ad and converts into a sale
How Programmatic helps Advertisers
60% of publisher ad space went unsold before programmatic advertising. Automation helps solve this problem by making it easier to access and buy ad space. The benefits include:
Access
With a wider pool of publishers, Advertisers can tap into a broader sample of their potential market.Efficiency
With precise targeting, an advertiser can allocate their budget more effectively. Investing in relevant audiences and time periods likely to yield better leads.Flexibility
Advertisers can make changes to their ads or adjust their targeting strategy based on impression feedback.Scalability
Instead of negotiating with individual publishers to put ads on their websites, advertisers can have a presence anywhere by bidding in the ad inventory marketplace.
What to watch out for
There are several factors which may skew media results and waste marketing dollars. Advertisers need to minimise the harm from these and be mindful of them in their reporting and audits:
Ad Fraud
When advertisers buy into a programmatic ad inventory, they're paying for bulk impressions of their ad. Every time an ad is served online, whether viewed via desktop or phone counts as a single impression.The web is occupied by non-human traffic (bots) so advertisers have to account for fraudulent activity which prevents the proper delivery of ads to their desired audience at the right time and place.
Brand Risk
In the past, brands manually curated where their ads would be seen. By selecting the type of magazine, location of a billboard or TV time slot. With online and programmatic, the sheer magnitude of websites and possible ad inventory means it is harder to account for where your ad may be seen.There are many landmines which your brand may have to control for. Your ads appearing on websites of low quality, misaligned values or controversial content may impact negatively on your brand.
Viewability
Just because your ad was served doesn't mean it was viewed by the end user. The ad file size and format affects the delivery. Did the ad load quick enough and was it easy to view on the user’s device? Conversely the activity and habits of the user may mean they've scrolled or skipped past your ad. Advertisers and publishers need to work together to ensure best practice for optimising exposure.
There’s a lot more to it
We’re only scratching the surface on what Programmatic Advertising is and its potential for your business. There are several players and industries serving the publisher side and advertising side. The world of Programmatic has a lot of jargon and there’s plenty of activity that happens behind the scenes whenever relevant users are served targeted ads online.
There are always new learnings and trends to be kept abreast of, as well as emerging technologies and innovations that streamline connections between potential customers and advertisers.
Speak to us at Mind Methods if you’re curious about how Programatic Advertising can help you.