Programmatic advertising has changed the ways of online display advertising, but there is still a lot of confusion around what it actually is.
What is Programmatic?
It's the automated buying and selling of digital advertising through a complex landscape of ad-exchanges and management platforms. Basically letting a computer place/buy your ads, thus removing human error.
The era of traditional digital advertising driven by humans, is over. Humans make mistakes, need to sleep, recover from hangovers, and take holidays. Programmatic is designed to replace this with machines and smart algorithms. The goal is to increase efficiency and transparency to both the advertiser and the publisher - removing humans from the process wherever possible.
Is real-time bidding and programmatic buying the same thing?
Real-time bidding (RTB) is the most common type of programmatic buying - but not the only one. RTB is the process when ads are bought through real-time auctions. However, advertisers can also buy guaranteed ad impressions programmatically "in advance" from specific publishers websites.
What channels are covered?
Programmatic advertising has been adapted to a wide range of digital channels, including display, mobile, video and social. However, offline channels are not far from being completely digitalised. Soon, we will see out-of-home channels advertising programmatically through digital screens on bus stations, shopping malls etc.
We’ve seen a rapid expansion of programmatic advertising. Today it represents over 55% of all digital advertising, and is forecasted to grow to 65% by 2020.
Why does Programmatic Advertising matter
To online advertisers, no matter the size, it is typically far more cost-effective, quick and easy way to plan and buy digital-media.
It’s getting increasingly hard to motivate having human-powered research and negotiating with 1,000’s of publishers and networks, to pay expensive rates on their ad placements. Programmatic is normally a lot less expensive, and comes dramatically increased targeting capabilities that we historically could only dream of. More importantly, advanced and smart artificial intelligence can automatically optimise the campaigns to reach a set goal.
In one way or another, we believe that all publishers, no matter industry will be leaning back on programmatic in the near future.
Hyper Targeting? YES PLEASE
There are so many different ways to target your programmatic advertising to very specific customer groups or segments. You can target based on audience, behaviors, context, and location.
Targeting is automatically optimised to find look-alikes to users that engage click on the ads, or convert into new customers or leads. This is a continuous, self-improving process. Targeting can also be specifically set to hit one consumer across their different screens, such as on their computers, phones, tablets.
Key point, anything that can help identify a customer intent, typically helps increase conversions and ROIs around those products.
How much does it cost?
Most programmatic is typically sold on a CPM basis, cost per 1,000 ad impressions.
CPMs can range wildly based on the quality of the list and the level of targeting. The higher quality of inventory, or the more specific you want to be in your targeting, the higher the price. Prices also vary by industry, device, format and placement on the page. But, on average, programmatic CPMs range around $0.50 to $2 CPM. This is a cost benefit compared to human-driven trading that range $10+. That's x5 the price!
So, programmatic can help you stretch your limited ad budgets 10 to 20 times further.
An enormous benefit for small businesses with limited marketing budgets.