Programmatic advertising is the perfect choice for those seeking an efficient way to access huge relevant audiences in this data-driven world. It is the ideal solution to buy digital ads and effectively place your ads in the current advertising landscape. The efficient use of programmatic advertising technology can help marketers drive conversions and increase Return on Advertising Spend (ROAS) throughout the customer journey. The popularity of Programmatic Advertising Technology is evident from the fact that marketers spend more than half of their media budget solely on programmatic advertising. There has been tremendous growth in the acceptance of programmatic advertising, as evidenced by the fact that by 2022 the spending on programmatic advertising will surpass USD 100 billion.
Programmatic Advertising and its significance
We can discuss briefly what programmatic advertising is and how it is beneficial for the various stakeholders. Programmatic advertising entails the end-to-end process of automated buying and selling of ad spaces. Before the onset of programmatic advertising, ordering, setting, and reporting ads had to be done manually, and it was a highly hectic task. The decision about managing ad space, and negotiating the sale and purchase of ad spaces, has always been a challenge for publishers and advertisers.
With the advent of programmatic advertising technology, these hectic and time-consuming processes have been streamlined to make them highly effective and efficient. Before programmatic advertising gained prominence, digital ads were commercially transacted manually, making the process exorbitant and unreliable. These stumbling blocks were all eliminated with the advent of programmatic advertising. Programmatic advertising is highly beneficial to both advertisers and publishers. Publishers prefer it because it reduces the impact of ad blockers on their ad spaces compared to other ad platforms and types. For marketers, on the other hand, it is beneficial as it drastically improves the ads that lead to crafting successful marketing campaigns.
We can now discuss the process of programmatic advertising briefly. It starts when a visitor clicks on the publisher’s website, where the publisher puts the ad impression for auction through SSP. Advertisers will then begin to compete for ad impressions through DSPs. Ultimately, the highest bidder wins the ad impression and gets it displayed on the publisher’s website. The ultimate step is that a visitor clicks on the ad may lead to conversion.
We can briefly discuss programmatic advertising and the various platforms involved in programmatic advertising. Programmatic advertising helps connect publishers with ad spaces on their websites to advertisers willing to buy them to promote their brands. Advertisers turn to programmatic advertising agencies to launch an ad campaign for their products or services. These programmatic ad agencies use the Demand Side Platform that automates buying ad impressions to meet the campaign goals.
We can briefly discuss the various platforms indispensable to the programmatic advertising methodology.
- Demand Side Platform – Advertisers and ad agencies can access ad inventories from several publishers through a state-of-the-art Demand side platform. Using the Data Management Platform, which manages the audience data, the demand side platform ensures that ads are displayed to the correct audience. Targeting the appropriate audience is primarily achieved using data such as location, demographics, behavior, and online activity. Demand Side Platforms collect and harness this data, which analyzes it and matches it with their data and target parameters to display suitable ads to the right audiences.
- Data Management Platform – Having the right data is the essence of programmatic advertising, and the Data management platform facilitates this. In programmatic advertising methodology, data management platforms collect, analyze, and activate data. This robust platform provides advertisers with complete customer profiles. By matching visitors more likely to convert, the programmatic algorithm delivers ads suited to them based on the data.
- Supply Side Platforms – Supply Side Platforms is the custodian of publishers with publisher’s ad inventory. A Supply Side Platform is a programmatic software that facilitates publishers to sell their ad inventory or ad spaces. A Supply Side Platform connects publishers with several ad exchanges, demand-side platforms, and ad networks, enabling publishers to sell ad spaces to a larger pool of potential buyers. Therefore, publishers can set their bids to maximize revenue when they have access to a larger pool of advertisers or other potential buyers. A supply-side platform also allows publishers to filter ads based on advertisers and other criteria.
- Ad Exchanges – Ad Exchanges is a digital marketplace that facilitates advertisers and publishers come together to buy and sell ad spaces through real-time auctions. The buying and selling of ad inventory take place via real-time auctions powered by real-time bidding, with publishers able to sell ad spaces to the highest bidder.
The Benefits of Programmatic Advertising to Advertisers
Traditional marketing posed some challenges to the advertisers as they found it strenuous to access the publisher’s ad spaces. It became evident that the problem was widespread when over 60% of publisher space went unsold. Ad inventory buying became very much more manageable for advertisers after automation was introduced through programmatic advertising. The main advantages for advertisers through programmatic advertising were as follows.
- Programmatic advertising allows advertisers to bid on an ad inventory from the available ad spaces, thus reaching a larger audience than conventional marketing.
- Based on the ad impressions received, advertisers can make real-time adjustments to their ads to incorporate these adjustments into their targeting criteria and increase their marketing campaigns’ efficiency.
- Economic efficiency while running a marketing campaign can be drastically improved for advertisers through programmatic advertising. Due to the streamlined end-to-end process of programmatic advertising, advertisers can serve relevant ads through effective targeting. When advertisers have too many publishers, it is possible to increase their return on ad spend (ROAS).
The benefit of Programmatic Advertising for Publishers
Programmatic advertising allows publishers to host relevant ads by equipping them with the right tools. By bidding effectively, they can secure deals that will maximize their revenue and help them to win deals that will benefit them. The main advantages for advertisers through programmatic advertising were as follows.
- Through programmatic advertising, it is easier for publishers to sell their ad spaces and optimize ad sales, substantially reducing the investment required to find advertisers.
- Publishers can engage in effective communication with advertisers by deploying programmatic advertising methodology mutually benefiting both parties.
- Visitors who stop by the publisher’s site will be served with relevant ads because these audiences fall part of the advertiser’s target audience.
- By reducing publishers’ costs, programmatic advertising allows them to earn more from ad spaces and helps them to increase their margins.
- With the importance of programmatic advertising growing by heaps and bounds and the constant evolution and change in this sector, keeping up with it is crucial.