Programmatic advertising: Answering your questions

Mobile media consumption has increased by 600% over the last four years with consumers now spending roughly 1 hour and 49 minutes each day enjoying mobile content. So the question still remains, why, according to Forrester research, do a surprising 67% of marketers not know about automated buying technology, understand how it works, or need to learn more about how to apply it to campaigns.

One suggestion is that marketers are still confused by the technicalities of programmatic advertising and are unaware of how to make best use of it. So, with the industry estimated to reach $18.2 billion in U.S. digital ad revenues in 2018, up from just $3.1 billion in 2013 (BI intelligence), here we answer some of the queries that you were too afraid to ask. It is actually quite straightforward…

What is programmatic?

Programmatic is an automated advertising process that works through a dynamic auction process called real time bidding, which takes place when a user clicks on a mobile website. Each impression is bid for in (near) real time versus a static auction where the impressions are typically bundled into groups and sold in 1000s. A bid request can include a wide variety of valuable data, including the user’s demographic information, browsing history, location, and the page being loaded. Requests go from the publisher to an ad exchange, which submits them to multiple advertisers who submit automatic bids in real time to place their ads.

Understanding the terminology

The terminology can be completely baffling for someone who is just starting to investigate programmatic. Here we highlight and make sense of the main terms that may be encountered.

1.       Cookies: This is small piece of information that is dropped on to a consumer’s hard drive or device to map their journey throughout a publisher’s site. These can then be used along with third party data from other providers to understand the motivations of the individual to help present them with a relevant advert.

2.       Data management platform: This allows advertisers to fully utilise data insights from 1^st and 3^rd party data to effectively segment their audiences.

3.       Server side platform: This enables publishers to integrate programmatic advertising technologies.   

4.       Demand side platform: This manages advertising placements across a range of inventory thereby enabling advertisers to successfully reach their target consumers.

5.       Native advertising: Advertising that is deliberately designed to fit in with the publisher’s editorial content.

6.       Omnication: This means the seamless delivering of a content marketing strategy across a growing number of marketing channels. In the ad-tech space social has opened up a wealth of possibilities.

7.       Geofencing: A particular buzzword for mobile (as it doesn’t apply for desktop) this refers to a virtual area around a mobile device which can then be used to provide them with location related information.

Linking the benefits to core marketing principles

Many marketers get overcome by fear in regard to programmatic advertising as they believe, wrong, that the core marketing principles adopted for traditional marketing methods are more challenging to apply. This actually couldn’t be further from the truth as it is perfectly suited to them:

1. Making the most of mobile

Having already been proven on desktop, programmatic is perfectly adapted for mobile. In fact, it can incorporate that latest ad formats including rewardable, video and ‘try before you buy’ adverts. The mobile games and apps market has also opened up a huge opportunity to reach consumers. Finally, geolocation is taking off – a clear element not available on desktop.

2. Being able to target down to the individual

In a world of fragmented media marketers are now searching for the Holy Grail: The opportunity to reach consumers in a personalised one to one basis. Programmatic offers just this, enabling the right adverts to be shown at the right term, wherever the consumer is. This is a clear benefit from a somewhat archaic method of purchasing volumes of inventory by speaking with publishers individually.

3. Knowing exactly where to place adverts

Planning and placing adverts has traditionally been a long and drawn out process with significant costs involved. Programmatic advertising changes this by making it extremely easy to place adverts wherever you want – either on premium publisher sites or by making to most of niche sites across the wider web. There is also absolute security that adverts won’t end up on untrusted sites.

4. Making adverts similar to editorial: Native advertising

The advertising industry has been hit by a saturation point with consumers switching off to long commercials and invasive advertising methods. Programmatic can therefore make the more of the trend for native advertising where adverts are tailored to fit the content of the publisher site. Working with major publishers such as The Guardian and Twitter, this trend is only set to continue.

5. Arming marketers with essential data

Data is very much the currency at the moment. Brands and agencies that know exactly what they consumers want and when are well ahead of the competition. Programmatic is therefore perfect at building up actionable data inherently without new processes to be integrated. As well as highlighting which inventory is performing, details of the consumer types responding along with time of day and type of content (message, creative) can all be assessed and that is only for starters.

6. Clear pricing

The cost to benefit ratio is top of mind for advertisers using any marketing channel and where programmatic clearly stands out from the crowd. By paying a fair price for each impression as a result of an auction process, advertisers can clearly get what they pay for. As a result, they are able to quickly manage their inventory, switching off placements that aren’t driving results to focus on those that are.

7. Agility, efficiency and scalability

With very clear management dashboards marketers have full control over their placements. They can also segment their audiences instantly and efficiently as all the processes are automated. Another key benefit by being able to work at scale and place adverts across a wide range of inventory is that it is possible to remain agile to the needs of consumer, switching of placements that aren’t performing and building upon those that are.

8. Transparent reporting

Transparency when using any service provider is essential and it is extremely clear with programmatic. With budgets under constant scrutiny it is essential to provide advertisers with a clear understanding of where their money is being spent and how it is performing. Automation ensures that money is spent directly on inventory rather than administration or logistics. Management dashboards also deliver customer built reports.

9. Easy to switch on and switch off

New technologies often lead to trepidation and anxiety when they are challenging to switch on and off. Programmatic is the opposite as it is easy to switch on and off. Due to the automation process, strategy can be quickly discussed and put into practice. A test phase can often be introduced to highlight the benefits before the advertiser becomes fully involved. This is quite the opposite to a traditional media model where relationships are developed not only with the provider but also individual publishers.