29 Oct · 5 min read
Automation is all the rage these days, and more and more companies are jumping onto this trend. No matter how skilled someone may be, it’s not humanly possible to be able to do every task in the best possible manner.
Yet, machines and software are capable of doing so, when programmed for it. They can easily make the right decisions to optimize a lot of business processes such as advertising or lead generation. In the case of advertising, there may be various types of campaigns and marketing tricks that can affect the efficiency of an ad. While the right choice of digital advertising space might not be easily visible to us, a computer can quickly analyze and compare the options and find the best one. Let’s see how programmatic advertising has taken over in the past few years.
In the US, almost 85% of digital display ads are driven by programmatic technology. Even though it might seem like technology is replacing humans in a lot of tasks, this might not be such a bad change. By automating these tasks, people can focus on other aspects of their business. Programmatic advertising creates more time for conceptual work by taking care of redundant and monotonous tasks.
In the traditional way of digital advertising, an advertiser may decide where, when and how to publish a certain advertisement. The advertiser then negotiates with the sales representative of the digital space to arrive at an agreement. In the case of programmatic advertising, the automated software takes care of this entire process.
Programmatic advertising utilizes existing data to analyse various options and find the best solution. The algorithms and functions are programmed such that they find the optimal solution based on your goals and budget. It is definitely the future of digital advertising and might even take over media advertising, like TV ads.
The publisher, i.e., the person/company who owns advertising space on their website or applications, sells these to advertisers. Advertisers can contact programmatic ad agencies which then automate the process of buying ads. These agencies use a demand-side platform (DSP) to automate this process. The DSP aggregates a purchasing programmatic ad inventory from multiple publishers and uses a data management platform (DMP) and data about the target demographic to create a targeted ad.
For example, let’s consider a company selling women’s shoes. Also, consider a 30-year-old woman who has been browsing through multiple online stores that sell shoes. When she visits this company’s publisher website, the page sends an ad request to the supply-side platform (SSP). Various advertisers now have a virtual auction to be able to present their ad to this woman. This process happens instantly and the ad gets displayed immediately to the woman. This entire process happens in multiple, simultaneous instances and gives a unique result to every website visitor.
Based on how the bidding takes place or the access and guarantee provided to advertisers, there are several types of programmatic advertising. Here are a few more often used ones:
As the name suggests, this is when the auction happens in real time. The programmatic advertising tool hosts publishers and advertisers on a public marketplace where the highest bidder wins the ad space. This is also known as Open Auction or Open Marketplace.
Here, only certain advertisers get access to the ad inventory. This is controlled based on the restriction placed by publishing apps and websites on the types of ads they want to show.
In these platforms, there is no bidding process as the negotiations are done directly between the publisher and advertiser. The platform only connects the two parties when the advertiser guarantees the minimum bid rate.
Apart from these, there are several other types of programmatic advertising styles that are gaining traction such as, header bidding, exchange bidding, first, second or third price auctions, etc. Each of these have different ways to get the publishers and advertisers to cooperate more efficiently.
If you’re still wondering whether your company needs programmatic advertising technology, here we have listed some of the major reasons why most other companies have made the switch:
Programmatic advertising is a lot more cost-efficient as it can analyze and bid on real-time offers, monitor the campaign and optimize the campaigns quickly.
In programmatic advertising, advertisers can et targeting criteria to reach their target audience. Most publishers gather huge amounts of information from their visitors which can be used to show ads to specific groups of people.
In the traditional way of advertising, there isn’t any way to adjust the ad once it’s published. But in programmatic advertising, ads can be changed if you see that a campaign isn’t effective.
With programmatic advertising, most of the advertising tasks are handled by the software, leaving the manpower of the company to use their time efficiently on more important tasks.
Programmatic advertising is definitely here to stay, and will soon take over all types of ad publishing platforms. It enables all types of companies, big or small, to reach their audience more accurately and with a tighter budget. If you’re looking for smarter ways to manage your advertising campaigns, look no further. Contact us for a suitable programmatic advertising solution for your business.