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How to fully understand Programmatic advertising through an easy guide

By April 13, 2018 No Comments

A few months ago, a lot of digital marketing agencies began talking about programmatic advertising and how difficult it was to understand.

They use complicated terms such as real time bidding or cross device to make their point.

Here is a guide, which will help you to understand this complicated digital marketing’s sector and realise how important it is.

 

What does Programmatic mean?

 

Programmatic is a software-driven technology used to automate the different parts included in the ad buying process.

Simply put, they use software to buy digital advertising instead of the traditional process, which consists of human negotiations and manual insertion orders.

This allows you to speed up the all processes as people cannot keep up with the pace of machines.

For example, one of these software companies for brand advertising offering services all over the world isTubeMogul.

They enable brands and agencies to buy and optimize their advertisings.

 

What’s the added value?

 

Thanks to programmatic advertising you can increase your ad relevancy by targeting a more suitable audience.

This is based on psychographic, demographic, behaviour and intent signals that couple automation with data for more precise ad targeting.

They help you find the perfect websites to put your ads on and when you should do it.

Getting the right timing is really important because you can reach the segment of your target precisely.

You no longer waste time and money by posting ads on random websites and nonsense timing.

It will be more accurate and relevant.

One more advantage of using programmatic advertising is that the ROI (return of investment) is significant.

You are getting your money worth from it.

For example, the company “Kellogg” has seen unbelievable results when using programmatic buying. Their ROI have increased as six times.

 

RTB

 

Real time bidding is actually an easy term to understand.
It means you can buy an ad online in real time.

You can bid on one of the advertisements that companies are selling.

Then you base your price on the size of the banner, the context of the webpage or the place and time the ad is visualised.

Whoever wins the auction, immediately has it displayed on his site.

Real Time buying

 

How do companies collect data?

 

The use of multi-sourced functions involving formulas and algorithms work in combination with the delivery of data and the experiences of customers when they interact with brands through messages or payments.

They also use cookies to identify users’ behaviours, to see what kind of content they are consuming, where, audience segments and what time of the day so their clients are paying only for effective ads.

This is a huge change from traditional ad buying, where buyers agree to run an established number of ads with publishers and locked in to the contract.

collecting data

 

Main issues

 

1. Mobile

 

The behavioural targeting capabilities of programmatic are linked to tracking cookies, but the issue is that cookies are inefficient on mobiles.

Because there is limitation which is causing troubles to marketers who want to run campaigns across mobiles.

 

2. Fraud

 

Domain spoofing, where dishonest publishers, ad networks lie on the nature of their traffic to look like legitimate sites.

So, they list their websites in the ad exchanges as another site.

It became more and more common because of the marketing digital’s trend.

And even if people get used to it and know how to deal with it, it remains a huge concern. One that is costing publishers in lost revenue.

 

Growth

 

In 2015, programmatic advertising became the dominant way digital display ads were bought and sold in the US.

An estimated 15 billion US dollars was spent on advertising through this technique.

More than two-thirds of their digital display ad spending is programmatic.

And the numbers keep increasing (around 80%).

Europeans are also beginning to use it more and more and the growth is significant.

An expected increase of 38% by 2020 means the sector is poised for a significant shift in the methodology and application of adverts.

But the uptake of programmatic capabilities is still fragmented in Europe, due to cultures and economic norms which slow down the process.

Still, online video advertising traded programmatically is in constant increase and is nowadays one of the biggest channels in digital marketing.

Any doubts about the validity of programmatic advertising should be erased with these facts and it is expected that almost every company will use it in the next few years.

 

Will Programmatic advertising be the future of ad buying?

 

If it’s based on all media channels online and offline, we can’t generalise and forecast that this shift will take over the world.

Because a portion of the population will always stick to tradition and use communication channels such as television, radio or newspapers.

However, it is fair to say that these methods continue to dwindle and their use in the developed world has diminished to the point that advertising within these channels holds little influence.

That said, it is a fact that in 2018 there are still 4.4 billion people around the world who do not have Internet and many companies must still resort to common communication channels to reach their target audience.

Those channels will not disappear and will always have a place in the advertising sphere.

Although programmatic advertising will continue to gain ground in the digital advertising sector and will likely become the biggest way to advertise online.

If you have any more questions or doubts about online advertising feel free to contact us to get the information you need.