Consumers nowadays want instant gratification. They turn to their mobile devices whenever they need something and expect to find a solution to their problem within seconds. If they are hungry, food delivery services that promise hot food in under 30 minutes are just one click away. If they want to book a flight to an exotic destination, they can do it from their phones on their way to work.
Advertisers need to keep pace with today’s micro-moments world and target their audience at the right moment and with the right message. And, that’s no walk in the park.
That’s where programmatic advertising comes into play. As one of the fastest-growing area of digital marketing, this sophisticated tool can help companies connect with their audience easily and efficiently.
In this article, we will take a look at programmatic ads and try to understand how it works and what benefits it can bring to advertisers.
Programmatic Ads: a Definition
Programmatic advertising is a marketing method that automates the ad buying process. If the traditional process requires requests for proposal, quotes, human negotiation, and so on, programmatic buying simply uses software to purchase ad space.
Don’t get the wrong idea: the human factor is still vital and necessary in developing and setting up the ad. Automating the process doesn’t exclude the need for creativity and insightful message. However, it enables real-time bidding, allowing marketers to focus more on improving and optimizing their ads.
Here’s an example to help you understand how it works.
Imagine that you are reading an article about the best decoration ideas for your kid’s bedroom. A children’s furniture brand that you’ve checked in the past has bought ad space on the site you are browsing. The moment you hit next page, the site you are currently on will decide if it will sell the ad slot to the children furniture brand.
If the brand didn’t reserve ad space, then the site will check to see if the company set a good price on ad exchanges. If it’s not satisfied with the price, then it can sell the ad as leftover inventory on the advertising network.
Let’s say that the kids’ furniture brand reserved ad space on the site. The moment you load the page, the brand gets an impression that they have to bid on. If they are the highest bidder, then the site will showcase their ad.
We understand if you feel panic creeping in right now. It’s an extremely complicated system. But, don’t worry: it’s all automated and it happens in real-time as the user loads the page.
The Benefits of Programmatic Ads
If you look at the research and case studies into programmatic advertising, you will see that not only simplifies the ad buying process, but it’s also extremely effective.
- It’s Data-Driven
- Immense Reach Potential
Because bidding happens in real-time, programmatic ads make it possible for advertisers to expand their reach beyond their wildest imagination. Some reports estimate that programmatic advertising allows for more than 15 billion impressions.
- Data Is Reported in Real-Time
The tremendous reach isn’t the only benefit of real-time bidding. Programmatic advertising also makes it possible to see any changes almost instantaneously. That way, advertisers can tell in real-time and with great accuracy if their ads are performing as expected or if they need to optimize them better.
- An Increased Level of Transparency
One of the main differences between traditional advertising and programmatic ads is that the latter provides an increased level of transparency. Advertisers can track their campaigns down to every detail, from the sites their ads are served to the costs and the consumers they are reaching. Moreover, all this information is data-driven and available in real-time. That way, advertisers can track their campaigns and determine if they are a success before they drain most of their marketing budget.
- You Only Pay for Relevant Impressions
One of the biggest fears our clients have when it comes to digital marketing is that they will break the bank without not many results in the end. And, understandably so. Online advertising can sometimes feel like a guessing game.
But, the data-driven nature of programmatic ads makes them highly effective and precise. When it’s used correctly (and that’s a big WHEN) programmatic ads enable companies to pay only for relevant impressions. As a result, advertisers can buy ad space only across the publishers relevant to their target audience and keep costs under control.
Just when you were starting to get a grip of PPC advertising, new technology is just around the corner. But, that’s the great thing about digital marketing: it always evolves and improves.
If you are new to programmatic advertising but are excited about its prospects, then give Australian Internet Advertising a call. We have experience with Google’s Programmatic Direct and can help you benefit from all the perks it offers.