Programmatic marketing is the future of digital advertising, but why do so many people sound oblivious at the mention of the term?
The advertising model is certainly not new; it’s been gaining significant traction since 2014. By 2019, Magna Global Programmatic Intelligence predicts that the programmatic format will make up 50 percent of all advertising. So half of the industry will operate on a system that currently rests unknown to a majority.
What is programmatic marketing?
Programmatic marketing is an automated advertising bidding model. Complex algorithms that constrain super
specific audiences and contexts award advertising space to companies in real-time, millisecond long auctions.
So as an advertiser, I know who I want to see my ad and precisely when. The market makes certain I’ve got competitors vying for that same window. We bid in real time for the space; highest bidder gets the slot.
Let’s define programmatic advertising more clearly.
Programmatic advertising explained:
- Consumer Joe clicks on web page
- Webpage Publisher Jane puts the ad impression up for auction
- Advertisers bid for the impression
- Highest bidder wins the space to display their ad
- Ad is delivered to Consumer Joe
- Consumer Joe clicks on the ad, possibly converting into a sale.
All of this happens in a millisecond; after Consumer Joe clicks on the URL and before he arrives at the page.
In the past, ads have been purchased ahead of time and slotted manually based on pre-determined arrangements. In the manual model, advertisers are slotted at a fixed priced and guaranteed only a guesstimate of who will be browsing at the selected time. With programmatic advertising, the advertiser only pays as much as they are willing to for the exact impression they want.
The bidding happens more quickly than I can hit the space bar, so that must leave a pretty significant window for buyer’s regret. Not exactly.
With the algorithms used to fix the bidding, both the publisher and the advertiser can set parameters. An advertiser with a budget to use as optimally as possibly can set maximum bids. If the auction on one page goes to high, the budget is automatically considered for the next impression up for auction. This allows advertisers to achieve the maximum relevant impressions per dollar.
There is a risk in losing to a higher bidder and a bigger budget, but there is a security in impression relevance that is extremely attractive to media buyers.
Bidding in real-time for media also frees up time for the media buying administration. If parameters are well-researched and set, then buyers can spend time on more relevant, pressing matters.
Flexibility and simplicity are just the beginning of the advantages of using the programmatic system.
Programmatic advertising arranges bids per individual impression. This means that the targeted audience is more narrow than ever before. Instead of buying space that speaks to a group likely to cater to a particular individual, selective bidding hones in on that singular individual and respective consumer characteristics every single time.
As consumers have and continue to interact with ads displayed by programmatic technology, data has been and continues to be collected. This allows the algorithm to be further refined; creating parameters for types of ads that statically show engagement by respective audiences.
Additionally, the importance of gathering consumer data on the advertiser end is emphasized. As an advertiser, if you know the behaviors of your consumers more intricately than the current algorithm affords, you can define your parameters to ensure that your ads are placed only in front of consumers at times when you know they’ll be likely to click through and make a purchase. Consumer data has always been important, and this one more example of why metrics matter when it comes to using your advertising budget wisely.
Clearly, programmatic advertising is the simplest, most efficient way to attract and win your target consumers. The format for bidding continues to evolve, including more factors and catering more specifically to both the consumer and the advertiser.
So far, we’ve talked about the advertising bidding that takes place in real time. This allows for an off-hands approach and a solid likelihood for customer and sales conversions. But there is also an option for non-real time bidding. Let’s look at the biggest differences between the two:
The following capabilities are available to both real and non-real time bidding:
- Advanced technology drive and streamlines the traditional media buying process
- Purchases are integrated with significant consumer data, influenced by media usage and impressions
- Impressions cater to individuals instead of targeted groups of people that might or might or not include those preferred individual characteristics
However, real time bidding does allow even more benefits, such as:
- Remaining non-preferential to one type of content or another or to any vendor and brand associations. Non-real time bidding allows advertisers to remain loyal to a set of preferences which many brands appreciate. Other brands prefer to stay separated as only advertising. Real-time bidding allows the ad placements to be non-political in their associations.
- Data is assessed during transactions that enrich final purchase decisions and loop back to inform marketing campaigns for future decisions.
- Matching needs between vendors and buyers through the bidding mechanism. Pooling from multiple vendors and advertisers allows for the best matchups that accommodate all parties’ budgets and needs.
Although both approaches to programmatic advertising produce tailored and efficient results, engaging in real timing bidding enhances the advertiser’s placement optimization.
To find out more about programmatic marketing and to incorporate it into your current media buying strategy, get in touch with Executive Digital. Our team of experts can review your entire marketing strategy and devise a comprehensive digital approach to make sure that your budget is well spent and your brand message is well received, even amongst the competition that clutters most markets. Get off to the right start in 2017, and team up with our digital marketing masters!