Uncover the benefits and importance of programmatic advertising, learn how it works, and discover why marketers should consider using it in their campaigns.
When browsing online, have you ever noticed an advertisement that seems to seamlessly align with one of your interests? No, you’re not going crazy (and Google isn’t listening to you in the way you think). What you’re seeing is actually a marketing technique called programmatic advertising.
Programmatic advertising—the buying and selling of digital advertising space through automated platforms that connect publishers with prospective advertisers—has become an increasingly important part of a modern marketer’s job.
If your company is interested in the technology behind ads, learn more about how programmatic advertising could work for you with Impact’s paid media strategy webinar.
The Importance of Programmatic Marketing
Digital advertising on websites is the dominant form of ad spend worldwide today. As digital marketing continues its rise and maintains its position as the primary way marketers communicate with prospects, the need for programmatic advertising will only increase as tools to improve the process of buying and selling digital ads become more sought-after.
In fact, in the digital advertising market, 81% of revenue will be generated through programmatic advertising in 2028, according to Statista.
Simply put, digital ads are the primary channel through which marketers broadcast their ad messaging to consumers, and this is why programmatic advertising represents such an important tool for businesses to effectively communicate and make sales.
There are six major benefits of programmatic ad buying:
In this blog, we’ll cover what programmatic advertising is in more depth, how it’s used, and how a modern business can make the most of these platforms. You can also start by watching this brief video that breaks down programmatic advertising:
How Does Programmatic Advertising Work?
Programmatic advertising operates through ad exchanges in which publishers sell digital ad space and buyers engage in bidding to secure prime placement for their content to be advertised.
This is orchestrated through the use of an automated algorithm that uses advanced analytics to determine the correct placement of these ads on publishing sites—based on factors like industry and demographics—to give ads the best bang for their buck.
This algorithm ensures optimal ad placement on sites, maximizing the impact of each advertisement and delivering value for marketers. This process can be found on platforms such as Google Ads, where the entire transaction unfolds within seconds. Buyers benefit from the immediacy of this system as they can secure qualified space for their ads almost instantly.
Benefits of Programmatic Advertising
Scalable and Flexible Spending
Programmatic ads are completely scalable based on how much is spent on ad campaigns, making it an appropriate form of advertising for big and small businesses alike.
Google Ads, for example, allows for average daily budgets for campaigns and will determine when best to use the budget on a day-to-day basis, depending on factors that impact the campaign’s return on investment. Advertising for a restaurant’s ad campaign in the run-up to the weekend might be more advantageous as people tend to have more time to eat out on weekends.
Consider a restaurant gearing up for a weekend surge in consumers. Programmatic advertising can strategically direct resources toward the campaign during peak times when potential customers are more likely to dine out, such as outside of the work week. This approach ensures that companies’ budgets reach maximum effectiveness, capitalizing on opportune moments for elevated impact.
Because of this, not only can budgets be used more effectively, but the scalability of ads run through programmatic advertising is extremely flexible—companies can simply increase or reduce the budget whenever appropriate.
Large Reach
Programmatic advertising provides enormous reach to marketers because the expansive marketplace for publishers, boasting millions of websites and the vast expanse of ad spaces offered, far exceeds anything else.
The magnitude of the programmatic advertising landscape offers an opportunity to reach an incredibly broad and diverse audience, depending on the needs of the buyer.
In comparison to other advertising methods, the scale of programmatic advertising sets it apart and makes it an indispensable tool for modern marketers.
Transparency
Programmatic advertising provides an unprecedented level of transparency for marketers, allowing them to have total visibility over their campaigns. This level of transparency is a game-changer, letting marketers meticulously track and analyze every aspect of their advertising ventures.
With programmatic advertising, marketers can see exactly what sites their ads are being used on, gaining insight into the environments where their brand messages are best displayed.
Beyond visibility, marketers can dive into the demographics of the audiences interacting with the ads. This understanding enables marketers to fine-tune their strategies to ensure that the campaigns resonate with the right target audiences.
The transparency offered by programmatic advertising also allows marketers to see what they are getting in return on investment. Marketers can evaluate the performance metrics of the campaign, discerning the impact on their bottom line.
In essence, programmatic advertising makes it a lot easier for marketers to determine the success of their campaigns and how to improve them to reach out to their target audiences by seeing what sites are currently being used and whether you’re communicating your message to the right end users.
Efficiency
The transparency of programmatic advertising plays a large role in the efficiency that the marketing technique can bring.
Access to this data in real-time means that marketers can make changes when necessary and optimize the placement and style of digital ads in order to effectively drive conversions. The data-driven approach of programmatic advertising makes it an efficient tool for advertising.
Not only does the actual advertisement benefit from this efficiency, but the process of obtaining programmatic advertising only takes seconds.
Across the 10 campaigns studied, Nielsen found that when brands consolidated their campaigns using Programmatic Guaranteed, they experienced an 11% increase in reach efficiency. That means that for the same impression investment, they reached 11% more unique consumers.
Targeting
As we noted, the specificity of programmatic advertising allows for a level of targeting that is unparalleled by any other form of modern marketing. Programmatic advertising has several different factors that can be segmented and targeted according to the needs of the marketer.
Examples of different types of targeting are:
- Contextual: This kind of targeting means data is used to ensure the right kind of ad appears on a relevant site.
- Behavioral: Shopping habits and interests drive behavioral targeting, where ads will be shown to people who fit a certain behavior profile, such as someone adding an item to their basket without purchasing. That information can be used to target that customer with something they may be interested in.
- Location: Geo-targeting ensures that location-specific ads can be seen by those to whom it’s most relevant, based on consumer information regarding region or postal codes.
- Device: Advertisers can reach users across devices, meaning marketers can use ads that nurture prospects on an omnichannel basis instead of just hoping a single ad cuts through.
Real-Time Data
Because programmatic advertising is conducted through the application and analysis of data in real time, marketers have access to this information in real time, too. As a result, they can make decisions on the fly, making adjustments to campaigns where necessary and evaluating them as they are launched.
Real-time access to a wealth of data is transformative, making it possible for marketers to fine-tune the placement and style of digital ads. The capability to adjust campaigns enables marketers to promptly respond to emerging trends, market dynamics, and consumer behaviors.
Programmatic advertising's efficiency is evident in its ability to transform raw data into information marketers can act on. This marketing tool delivers not just ads but finely crafted, targeted messages that resonate with audiences, ultimately maximizing the impact and success of their campaigns.
This kind of real-time management—using a data-driven, decision-making process—is what makes programmatic advertising stand out as an advantageous solution to marketers.
Bottom Line
As marketers continue to approach their campaigns in a way that is more data-driven than ever, the use of programmatic advertising has grown, and its benefits are being sought after by organizations of all sizes.
The ability to successfully target desired audiences effectively and manage campaigns efficiently within a budget means this tool will be an essential ally to marketers for many years to come.
If your company is exploring opportunities in paid media, delve into the realm of programmatic advertising through Impact's paid media strategy webinar. Uncover the potential benefits that this marketing approach can bring to your business.
