Programmatic Advertising 101: What & Why Should You Use It

Online display advertising is in its infancy as innovation continues to evolve the ways we buy ads online. To improve efficiency, software has taken over the buying process of purchasing advertising for millions of company. This ad buying software has become an industry of its own, known as programmatic advertising.

Programmatic Advertising 101 - Title

What Is Programmatic Advertising?  

Programmatic advertising is process of buying digital ads via software that automates the process after inserting parameters (discussed later in the post) manually. This has evolved from humans negotiating and processing ad buying. There are dozens of platforms offering these software services with some being industry specific, based on audience size or a select few companies they personally invite.

What Are The Benefits Of Programmatic Advertising?

Programmatic advertising wouldn't be growing if it wasn't working. There are numerous benefits such as:

  • lower overhead costs
  • Increased speed in ad buying
  • Better transparency of ads purchased
  • potential for private marketplaces for some media buyers.

The above benefits are great reasons why you should use programmatic advertising alone but it's the targeting of customers that's the real game changer. There are numerous ways to target different audiences with the following three the most popular form (at time of writing).

Look-A-Like Audiences: A demand side platform (DSP) recognising familiar characteristics of people who have taken action as you planned based on a set of simple rules. Algorithms then target a similar audience who look-a-like who are likely to convert and you can even adjust the measure of how similar the audience should be compared to the original.

The characteristics vary a lot depending on the platform but they can be very detailed, such as schools, qualifications, age, websites visited to as vague as they clicked on a link on your website or signed up to your newsletter.

Recency Retargeting: You've likely seen notifications regarding cookies when you visit some websites, this is a legal requirement in some countries, essentially asking if it's okay to have your internet activity tracked.

Retargeting is efficient by displaying ads based on the persons last interaction with your website and then sending them an advertisements either on that website or elsewhere on the internet.

For example, you visited XYZ.com and clicked on a the gold necklace product page. You may see that exact gold necklace from XYZ.com displayed in your Facebook feed a few minutes later. That is recency retargeting in action.

Location Based Targeting: Users can be tracked by their IP address which tells you where the person is based. You can then use geofencing to target people in specific locations which is awesome for brick and mortar businesses looking to enter the display advertising world. There are plenty of ways to get creative to target specific locations to convert customers.

Programmatic Advertising 101: What Is It & Why Should You Use It?

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Each of these forms of programmatic advertising are different with one more likely suited to your business.

Media buying as an industry will continue to evolve with the need to keep advertising costs low, while ensuring the adverts convert those who see the ads into customers. 

Measuring the long term ROI on advertising campaigns after the fact isn't always possible, but programmatic advertising will help you improve the efficiency of your online advertising and brand development.

Roy McClean
Apr 18, 2017
By Roy McClean

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