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MIKE McCREADY

ADVERTISING: What is Programmatic?

Programmatic Advertising uses automated technology for ad buying and selling. It refers to determining which advertisements appear when people visit websites that an advertiser, like your business, accesses through programmatic ad buying.


Your programmatic campaign is the mix of ad content the user sees based on their interests, so they might see video ads, native editorial-style advertising, Google ads, social media platform ads, display ads, connected tv ads, online display advertising, and ads in mobile apps.


Advertisers buy ads through programmatic ad platforms that automate their digital advertising inventory time available for purchase. These automated systems help you target specific audiences by using AI technology to pinpoint people and deliver your message.



Learning about programmatic ad buying helps you understand its differences from traditional media buying approaches.


"Programmatic" has been used in marketing for quite some time. What does it mean exactly? Is it really different from regular ads?


To get started learning everything you'd want to know about programmatic advertising, also known as programmatic buying, you first should understand that programmatic advertising has two categories:


(1) direct marketing


(2) demand-side platforms.



Direct Marketing


In direct marketing, an advertiser buys ads directly from publishers or exchanges. The advertiser pays for each impression, regardless of whether the viewer sees the ad. You can programmatically buy ads through Google Ad Manager (GA) this way.


In addition to buying impressions, you can also buy clicks and conversions. For example, if your goal is to increase sales, then you might want to pay more for a click that leads to a conversion than one that doesn't. However, this depends on your business goals.

Demand-Side Platforms


The role of demand-side platforms is to perform as an intermediary between advertisers and publishers. They match advertisers with publishers based on audience demographics and other factors. Demand-side platforms then sell the ads to publishers.


The most common type of demand-side platform is real-time bidding. This system allows publishers to set bids for individual keywords. When someone searches for those terms, the publisher's bid appears next to the search results.The highest bidder wins the auction. If no one bids, the ad doesn't show up.



Your site sends information about the visitor to a programmatic ad network, including basic ASL (age, sex, location) content platforms. Their device, where they came from, and how long they spent on the page are all included, along with more specific targeting data, such as the time of day (breakfast or lunch.)


Using artificial intelligence, a programmatic ad network matches visitor data with potential advertisers and instantly places ads on your website and social media through multiple platforms.


More than Instagram and Facebook, it's also Youtube, TikTok, LinkedIn, and Pinterest. It's also new articles, blogs, and websites. And it's delivered without ever buying directly with the platform. Meaning someone could log into their spectrum wifi, and Spectrum Reach will place the ad on their social media platforms for you.



The advertiser then delivers the ad to the visitor through the ad network, which is an online marketplace.



There are three primary types of Programmatic Platforms


Demand-side platform. This platform lets advertisers buy ads for their programmatic ad campaigns across different platforms at one time.


Sell-side platform. A supply-side advertising network (or SSP) is an online advertising service that enables websites to sell their own ads directly to advertisers. This platform includes both DSPs and advertising exchanges for publishers.


Ad exchanges. This is how SMPPs (Scheduled Media Publishers) distribute their ad inventory to DMPs (Demand Side Platforms that are connected to an advertising exchange, where ads change depending on their price. Google Ad Exchange is the most well known.



How much does a small business pay for Programmatic Advertising?


Programmatic advertising can cost as much as your marketing dollars allow and can work with even limited marketing budgets. Buying programmatic ad space on an impression-by-impression basis would be called “bidding,” for short. Bid amounts vary by market but generally range from $0.01-$10 per click or view. CPCs usually range from $1.00-$5.00.


However, CPMs can be much higher based on factors such as:

  • Which DSP do you choose?

  • Who is your target audience (target persona?)

  • How many others are trying to rank higher on Google search for your keywords and phrases?



So, why is programmatic advertising worth understanding for a small business owner?

Some of the top benefits include:

  • Large-scale audience reach.

  • Efficient and low-cost awareness.

  • Immediate data to base decisions.


A large audience reach


Programmatically-generated ads allow advertisers to target their campaigns to specific audiences by location, demographics, device type, etc. as part of your advertising strategy.


Programmatic is the most effective way to purchase advertising because there is so much cross-platform (PC/mobile) advertising inventory available.


Efficient And Low-Cost Awareness


Programmatic is one of the cheapest forms of online marketing available today.

We've already discussed average CPMs for programs ranging from $0.50 to $1.00.

Now let's talk about CPCs.

  • The average CPC for display advertising ranges from $2.00-$4.00.

  • This means that you'll spend less money buying programmatic ads than you will buying traditional display ads.

For example, if you were to spend $100 on display ads, you'd likely see around 100 impressions.


But if you spent $100 on programmatic ads, you could potentially see up to 10,000 impressions.


That's why we call programmatic advertising "efficient." It allows you to buy in bulk, which saves you time and money. And since you're paying only for the people who actually end up clicking on your ads, you're getting better ROI.


With a limited marketing dollar, your efforts can be spread out across multiple channels to get maximum exposure for your business.


Real-Time Data And Analysis


Due to programmatic ad exchanges relying on real-time bidding (RTB), they gain access to near real-time information.


Why is this important for your business?


Real-time data allows you to take quicker action and makes pivoting easier. You're now in a proactive mindset, which means you've become aware of things going on in your business, which is a huge advantage for a growing business and even the whole marketing industry.


Within the categories of programmatic that we learned are direct marketing and demand side, four common types are based on their process.

  • Real-time bidding. This kind of bidding is open to everyone, where ads are auctioned off live. It's also called an "open marketplace."

  • Private marketplace. When an advertiser has an agreement with a publisher, they are able to bid for ad space on their site. Because these sites often charge high prices for their advertising spaces, they're usually considered "premium" sites.

  • Preferred deals. A less-well know form of programmatic ad targeting. Advertisers choose their advertising spaces before going into the private or public markets. Spot Buys: This is also called "Spot Buys."

  • Programmatic guaranteed. A similar concept to a preferred deal, except there, is no bidding. The publisher and advertisers agree on a fixed price per impression (CPM).


Conclusion


Why Use Programmatic Ads?

  • They can be highly targeted.

  • Because they use automation, they can deliver ads quickly and efficiently.

  • They save money by eliminating or reducing much of the manual work.

You can use these summary concepts outlined above to determine whether or not a programmatic campaign makes sense for your business., and if you might be able to incorporate programmatic into your advertising strategy on your current ad platform.


Now every time you use one of these platforms, you'll know more about how programmatic advertising works and its benefits.

  • Programmatic advertising costs less than traditional advertising.

  • Programmatic advertising is extremely efficient.

  • Programmatic advertising saves companies time and money.





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