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There are few marketing methodologies that will offer more pinpointed results than programmatic advertising
With digital advertising bringing with it so many bells and whistles, one of the major challenges for prospective advertisers is figuring out what platforms to even advertise on in the first place. In 2024, there are more options than ever and it can be overwhelming for businesses if they’re truly unsure where their focus best lies. We often get questions such as “Do I focus on Google shopping ads, social media, email…” and so-on.
To answer all of those quickly: Yes! Please focus on everything.
However, whilst focusing on everything at the same time is the ideal, we know that doing so can be slightly overwhelming if you’re starting from scratch. To businesses like these, programmatic advertising can be a game changer, and it presents its own stack of benefits to established brands too.
Programmatic advertising refers to the use of software and algorithms to automate the process of buying and selling digital ad space across multiple channels. This includes websites, apps, and free-streaming sites like Youtube, Spotify and Soundcloud. So let’s get the elephant out of the room, this is clearly not an organic advertising method, it requires you to actively invest in your ads, which, for some brands, may be a barrier to entry. But to those with a budget to put towards their advertising, but no real clue where that budget should go, programmatic should emerge as a top contender.
Programmatic advertising allows advertisers to target specific audiences and deliver ads in real-time, based on user data and behaviour, regardless of where they are. This is illustrated by the percentage of programmatic ads spending on mobile in 2024 being nearly double what it was in 2013, mirroring the increase in mobile shopping. You can think of programmatic advertising as being similar to some modern investing tools, which automatically place a portion of your investment portfolio into the most powerful stocks and shares.
This is by no means a small industry either, In 2023, global programmatic ad spend reached an estimated 558 billion U.S. dollars, with spending set to surpass 700 billion by 2026.
In short, a brand or advertiser will use a data management platform (DMP) to collate audience data and generate audience segments, which can then be used to target specific users in online advertising campaigns, similar to how you would in a paid ad campaign for social media.
Brands then use a demand side platform (DSP), which allows them to buy the desired ad space from multiple publishers at the same time. An example of a DSP would be Google ads. In turn, the ad publishers make use of a supply side platform (SSP), to sell their ad space to the bidders they’ve received.
So you have two parties, one wanting to buy ad space, and the other wanting to sell it. This is where the ad exchange process begins. The ad exchange can be thought of as a digital, automated auction room that uses a process called real time bidding (RTB) to decide which advertiser’s ad displays on which publisher’s site.
RTB allows brands to bid on ad space on a cost per 1000 impressions basis, and, just like in a real auction, the highest bidder almost always wins. This process happens in milliseconds every time you go on to a website. Between the time it takes for you to click on a site and the site to load, an SSP will decide which ads will be relevant to you based on your web activity, cookie information, and interests. The DSP then determines how valuable of a potential customer you are and makes a bid on the ad space. The SSP then chooses a winner and displays the ad.
Here’s an example. Let’s say you're an eCommerce brand that sells children’s ski wear, like our client Roarsome. When someone within your target audience, likely a parent within the ages of 25-50, visits a popular skiing blog that just so happens to have ad space, you, through a DSP would make a bid. If you win, you have a super-targeted ad in front of a customer who is highly likely to be interested in what you are selling.
Programmatic advertising allows you to target an ultra specific audience across websites and apps, which can help you to deliver a great ROI for your business.
The above may make it sound like programmatic advertising is some magic methodology that you simply put some money into, turn on, and wait for the results to start rolling in. As great as that would be, things are, of course, a bit more complicated.
Just like with any other form of paid advertising, two, near-identical brands can place the same amount of investment towards programmatic advertising, but the one with the “better” ads and the more specific audience targeting will inevitably see a higher ROI than the other. Ultimately, you still have control over the content of the ad itself; a low quality or boring ad isn’t going to get a lot of people interested. Equally you can control how targeted your keywords, locations, and demographics are. So, even if you don’t see a high ROI straight away, with time you can easily improve on how well your ads perform.
Ultimately, programmatic advertising is a methodology, not limited to eCommerce brands advertising online. We also see programmatic advertising audio ads on platforms like Spotify, programmatic video ads that may appear on smart TVs and ROKU, and advertisers can even automate bids on digital billboards in what’s referred to as programmatic digital out of home - the sky's the limit if you want it to be.
Whilst programmatic advertising and paid social media advertising do exist alongside each other, with some platforms such as Snap even having their own take on a DSP, when it comes to programmatic advertising, social media platforms such as Facebook and Instagram are thought of as a walled garden. This is to say that if you have a programmatic ad campaign set up to show ads across various websites and apps, they won’t appear across even the web versions of Facebook, Instagram, Linkedin etc. With social media advertising being thought of as the primary avenue for allocating marketing spend for eCommerce brands, some may hear this and immediately lose all hope in programmatic advertising, but the two really do work hand in hand.
For example, by analysing the results of your social media demographics you can get tangible results that you can use to feed the audience mapping of your programmatic campaigns. After all, tangible results are always going to be more accurate than your intuition of who your audience is.
In the busy landscape of advertising for eCommerce brands, programmatic advertising, despite its complexity, stands out as a pivotal solution for those struggling to decide where to allocate their focus. Like with all other advertising, it does not promise a great ROI if your ad quality and audience targeting aren’t up to scratch, so be sure to not rush the process simply in pursuit of getting something sorted.
Want to know how we can help your brand reach programmatic advertising success? Click here to find out more.
