As a digital marketer, you’ve probably come across the phrase “programmatic advertising” on more than one occasion while doing some research.
There’s a good reason why people are talking about it Strategists are expected to spend $33 billion on programmatic solutions this year alone and take money away from traditional pay per click.
And the trend is going nowhere but up.
In this article, we’ll go over what you need to know about programmatic advertising so that you can use it in your own marketing campaigns.
Programmatic Advertising, Defined
Programmatic advertising is really just one flavor of marketing automation.
Specifically, it automates ad spending by handling the decision-making process about where to run ads.
“Put very simply, programmatic is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them, often in real time,” says Kenneth Kulbok, a programmatic sales lead at LinkedIn.
“Traditional ways of buying digital ad space involve the publisher running the campaign, while programmatic puts the control to manage and measure back in the hands of the advertiser.”
A programmatic solution relies on artificial intelligence (AI) to not only launch campaigns, but optimize them as well.
A Benefit to the Bottom Line
Marketing automation is usually designed to free the overworked marketer from tedious, mundane tasks. Programmatic solutions not only do that but also save the company money as well.
How? With an optimization algorithm.
Remember, programmatic advertising uses AI. It can “learn” about the best ways to spend ad dollars for maximum return.
You can think of a programmatic solution as the best of both worlds: it saves both time and money.
Fighting Ad Fraud
You might have heard that a programmatic ad solution is going put you in greater danger of ad fraud. You heard wrong.
For starters, keep in mind that ad fraud existed before programmatic solutions were even used. You can’t really blame ad fraud on programmatic advertising.
There’s an even better reason to reject the “programmatic leads to ad fraud” argument, though. That’s because an automated solution can use its AI to detect fraud.
And, of course, if it can detect fraud, then it can also avoid running ads on channels that are likely to result in fraud.
The reality is that you could see your ad fraud loss decrease when you adopt a programmatic solution.
Of course, no system is foolproof. There will always be hackers who will try to “beat” programmatic algorithms.
You’ll still have to stay vigilant.
Crunching the Numbers
One of the best benefits of programmatic advertising is that it can handle number-crunching on a large scale.
For example, you might have a Big Data repository that contains millions of rows and columns of information about customers and people in your target market. A programmatic solution is capable of analyzing those numbers so that it can optimize your advertising campaigns.
Even better, the system will likely find markets that you would never have uncovered by noticing trends in your data.
Of course, that means you’ll have to relinquish control of your campaigns to an automated system. If you’re one of those marketers who loves managing your own campaigns, that could be a problem.
There’s an upside, though. Once you see how much money your programmatic solution saves and how many customers flock to your website as a result of an automated campaign, you’ll be happy once again.
Then, you can spend your time on other important aspects of digital marketing while leaving the task of optimizing ad spend to a programmatic system.
The Two Platforms
On the programmatic market, there are two platforms that you need to know about: the demand-side platform (DSP) and the supply-side platform (SSP).
If you’re buying advertising, then you’re using the DSP. That’s how you’ll decide which ad impressions to buy and how much you’ll pay for them.
If you’re selling advertising, then you’re using the SSP.
Programmatic Direct and RTB
Keep in mind that there are different “flavors” of programmatic advertising.
First, there’s programmatic direct. That’s where you automate direct ad buys without the use of an auction.
Also, there’s real-time bidding (RTB). That’s an auction-based system.
Currently, more than half of programmatic transactions use programmatic direct.
Wrapping It Up
Programmatic advertising is quite literally the future of ad spend. If you haven’t considered a programmatic solution yet, why not take a look at it today?
by John Lincoln