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The Beginner’s Guide to Programmatic Advertising

by Patrick Delehanty 11 Aug, 2020

The Beginners Guide To Programmatic Advertising

I’m just going to come right out and say it - digital marketing is complex. There are countless channels, platforms, best practices, things you can and cannot do, hierarchies within your organization, and a learning curve for almost all of it. It can all get overwhelming pretty quickly, this is especially true when it comes to your paid media options.

Between paid search, display advertising, paid social, and now Amazon Advertising, you have a lot of options, and jumping into all of them at one time can get pretty hectic between setting up, running, maintaining, and tweaking your campaigns.

But one channel in the paid media spectrum that alleviates a lot of knob turning that comes with paid marketing is programmatic advertising. Now, I’m not saying that programmatic advertising is easy, or takes the legwork out of paid media, but it does give you the full control of many paid media channels while automating a lot of the more tedious aspects of paid management.

Below, I worked with our programmatic advertising experts to put together a comprehensive beginner’s guide to programmatic and how it can help marketers and businesses build brand awareness and drive more business through their landing pages and website.

Let’s get started. 

What is programmatic advertising?

Programmatic advertising is the media buying or selling of digital ads through a programmatic ad buying platform that uses an automated bidding system to display your ads on a network of websites. It’s a form of pay-per-click advertising that spans across multiple ad exchanges and allows the marketer to more granularly attract audiences and prospects, engaging them on topically relevant websites and exchanges based on a set of targeting criteria. 

How does programmatic advertising work?

Basically programmatic advertising comes down to two sides. There are the advertisers (buyers) and publishers (sellers). In order for ad space to be purchased, both a demand-side platform (DSP) and supply-side platform (SSP) need to be used.

What is a demand-side platform (DSP)?

Demand-side platforms (DSP) are used by advertisers to run their programmatic advertising campaigns. DSPs allow advertisers to buy impressions across publisher platforms that use ad exchanges and networks to show ads on websites. With a DSP, advertisers are able to target specific audiences based on browsing behavior, location, interests, device, and more. 

On ad exchanges, publishers are able to sell their ad space, and based on information and targeting set up by advertisers, DSPs automatically and algorithmically decide what ad spaces make the most sense for advertisers to bid on for potential placement.

What is a supply-side platform (SSP)?

Publishers use supply-side platforms (SSP) to automatically manage and sell available ad space on their websites and apps. By using an SSP, publishers are able to monetize their website and apps by showing advertiser’s ads and videos they loaded into a DSP.

Tying it all together

So, the quick way to explain how programmatic advertising works:

  • A user comes to a website
  • The website owner offers ad space to advertisers to show their ad (SSP)
  • Advertisers put up a bid to show their ad in that space (DSP)
  • A winning bid is chosen to show their ad in that space to that user
  • The users is shown that ad in that space
  • The user then hopefully clicks the ad to convert on the advertiser’s site or landing page

The best part of programmatic advertising? It’s all automated, meaning the heavy lifting of finding ad space and bidding is taken off the advertiser, and the trouble of finding advertisers and a winning bid is taken off the publisher.

What are targeting capabilities available in programmatic advertising?

Much like many aspects of digital marketing, programmatic advertising comes down to targeting and algorithms. While different programmatic platforms offer different types of targeting options, there is a basic set of targeting options that are available to marketers. Those target capabilities are:

Audience

Audience targeting is the method of showing ads to audiences that fit specific gender, income, age, education, or other demographic attributes. The data used in targeting these specific demographics is pulled from both first-party and third-party data.

Geotargeting (also known as location-based targeting or geo-fencing)

Geotargeting is the method of showing highly targeted ads and messages to an audience within a specific geographic location. This type of targeting is based on factors like cities, state, zip codes, and even IP addresses. Geotargeted ads can also be based on the location of the audience you want to see the ads.

Behavioral

Behavioral targeting is choosing an audience to show ads based on their browsing on the internet and the actions they’ve taken while on your website. Usually, these targeting measures are chosen based on what pages a user has visited, what products they have viewed, or what conversion actions they may have taken on a landing page or website.

Cross-Device

Cross-device targeting is exactly what it sounds like, targeting users and serving them ads based on how they use different devices. For instance, say a user saw an ad or visited your website on a desktop device, but now they are on mobile - you can use targeting to ensure that you’re showing them an ad on that mobile device, even though they may have seen an ad or visited your site on desktop or vice versa.

Contextual

Similar to the traditional method of buying advertising based on editorial relevance, contextual targeting looks at the category or keywords of a website page a customer is viewing and then serves them ads that are highly relevant to that content. The difference is marketers can bid on specific keywords and topics across the Web and have their ad served next to related articles.

Retargeting

Have you ever looked at a product on Amazon or a brand website, and then saw an ad for that same product elsewhere when you were on another website? That’s retargeting. This type of targeting is based on showing ads to users that have visited your website, viewed a product or took a specific action, in hopes of drawing that back to your website. While these ads are considered annoying, retargeting ads can increase engagement by 400%.

The types of programmatic ads you run are completely dependent on what your business goals are and what audiences you are trying to attract by leveraging programmatic advertising.

What are the benefits of programmatic advertising?

Whenever you choose a paid media channel to add to your ongoing digital marketing campaigns, you want to ensure you’re choosing a channel that gives you the most ROI based on your business goals and audience. With programmatic advertising, you’re given more opportunities to target and attract audiences and prospects based on targeting capabilities and networks available to you through various platforms.

A few benefits of programmatic advertising include:

  • Increased audience reach: It’s thought that roughly half of the world’s population is on the internet at any moment. Through targeting efforts above, while you won’t be able to capture all of those impressions, you can ensure your ads can be seen by thousands to millions of targeted users that will find your ads potentially relevant to them.
  • More in-depth targeting: As we said above, programmatic advertising and programmatic ad buying platforms give advertisers incredibly in-depth targeting capabilities to ensure your ads get in front of the right audiences at the right time, no matter who they are and where they are in the world.
  • Real-time measurement: As soon as your ads are live, you’ll be able to see in-depth data that helps you build and execute the best programmatic advertising campaign possible. For instance, you’ll be able to see how many impressions your ad got, the websites it appeared on, the types of audiences that saw it, and how much traffic / many conversions your ad has driven to your website, all as it happens.
  • Greater efficiency: Bottom line - programmatic advertising makes your marketing dollars work more efficiently to drive more ROI through more in-depth targeting, control over where your ads are being show, as well as the sheer audience size you’re able to choose from.
  • Increased control: Programmatic advertising gives marketers more control over who sees their ads, where they see them, how often they’re seeing them, and when they are seeing them, driving more ROI to your marketing dollars. Most programmatic advertising platforms give advertisers a list of where their ads are appearing, the types of audiences that are seeing their ads, as well as costs of those placements along important KPIs to help make important business and strategy decisions on the fly.
  • Automated: Again, whether you’re an advertiser or publisher, the whole process is automated, meaning (minus check ins and tweaks to drive higher ROI) you can set up your campaigns or ad space and hit “go”. Your DSP or SSP will handle the rest.

What to consider before starting a programmatic ad campaign?

Like any component of a holistic digital marketing strategy, you need to know why you’re doing what you’re doing, and how you’re ultimately going to get there. That’s why you need to sit down with your marketing team and discuss what you need your campaign to accomplish and how programmatic advertising can help, from top of funnel to bottom, and where it fits in.

Establish goals 

Essentially ask yourself, “what are you trying to do?” Do you want to drive leads or generate revenue? Do you need to increase brand awareness first? Are event sign ups most important? Is your programmatic ad campaign intended to distribute content to help you achieve another goal?

As with any digital marketing channel or campaign, it's vital to know what the ultimate goal is. 

Establish target audiences

Who are you trying to engage with? What is their intention when interacting with your brand or a competitor? How do they use the content? Generational, tech-savviness, interests, and other factors can come into play here. 

Only when you get to know the target can you begin to build the right kind of content around them.

Establish budgets 

What is your overall budget for programmatic ad campaigns? Many factors may contribute to the size of your budget, like:

  • How many channels you'd like to cover
  • Whether goals are long-term or short. It's generally a mix, but if you need results fast, this usually means you higher initial investment
  • Who's doing what and how much do their services cost
  • Additional tools and resources needed, like copy and design

Establish the channels and tactics you need 

First of all, what programmatic platform will you use?  Where does it fit in your ongoing marketing funnel?

While programmatic brings management and decision-making into one place, tactics can vary somewhat by channel, given the fact that your audience may use certain channels differently.

Establish an overall strategy 

How does programmatic fit into your digital strategy? Understanding this will help you align your objectives and goals across channels and throughout your advertising and marketing. 

You need to consider how well a programmatic platform will work with the channels you want to target. What, if any, additional tools you need to execute your strategy?

Establish Your KPIs 

As you know, it's important to consider what metrics really matter to your campaigns and business. Distinguish between vanity metrics that just look nice on paper and ones that mean something.

For example:

  • Bounce rates
  • Number of signups
  • Increased sales percent or number
  • New leads

Establish what other targeting capabilities you will focus on 

Targeting helps you get the right message in front of the right person. Not unlike playing darts, if you don't aim, you won't hit where you intend to. Even with targeting, you may miss sometimes, but advertising is a game of percentages. Better targeting increases that percentage that hit the mark.

Remember, some common things to target include:

  • Location
  • Interest
  • Demographics
  • Topical relevance

Establish user-focused landing pages 

Your website's home page is not a landing page. A landing page speaks directly to your target and encourages them to take one specific action. 

To ensure it's user-focused, make sure it:

  • Is mobile-friendly
  • Is not inundated with ads that destroy the experience
  • Is responsive
  • Has clear and visible calls to actions
  • Has content prioritized to get the visitor to click the CTA

Make sure contact is readily available 

Whatever the contact method is, it should be responsive. If someone is clicking to call or filling out a form, make sure someone's ready to respond quickly. Don't be afraid to test call-only campaigns. These can be very effective when you ensure someone is there to answer.

Pay attention to metrics and remain flexible

Finally, stay on top of your metrics. KPIs aren't something you wait until the weekend to look at. You need to be involved and invested in improving over time.  Programmatic takes a lot of the manual labor out. But you still need to know what's going on.

Some things to watch in Google Analytics and your programmatic platform include impressions, average positions, conversions, and mobile bids.

But at the same time, be flexible. You may experience some ups and downs. Watch, analyze, and adapt.

How much does a programmatic ad campaign cost?

Programmatic costs are typically measured per 1000 impressions, or cost per mille (CPM). The narrower your targeting, the higher the price. This is in line with the ROI you can expect from more precise targeting. Prices may also be different among devices, formats, and ad placement. 

$.50 to $2 per CPM is typical. When you consider the time-savings and the fact that programmatic advertising improves your ROI over time, that's a drop in the bucket. 

But it’s important to remember that costs of any paid media campaign, programmatic included, goes beyond the cost of clicks and impressions. You also need to consider ad copy and design creation, managing and maintaining your campaigns, as well as reporting on performance and optimizing the campaigns to ensure you’re driving the most ROI possible.

Programmatic vs Other Marketing Channels

Display Advertising 

Display advertising services are a form of paid media that allows marketers to create brand, product, or service ads using text, image, and video. These ads are then shown to targeted audiences across networks of topically relevant publisher websites or apps in various banner sizes.

It’s important to note here that programmatic advertising is a form of display advertising, but not the same thing.

Paid Search

Chances are you have conducted a search on Google, Bing, or other major search engines. When you do, you’ve probably noticed various search results that have the word “Ad” next to them that contain pictures, links, or enhanced features that entice you to click. Those are paid search ads.

Amazon Advertising

Amazon Advertising offers numerous opportunities to build more visibility for your brand and products in Amazon search. To do this, Amazon Advertising offers different types of paid advertising solutions, including:

  • Sponsored Products
  • Sponsored Brands
  • Product Display Ads

And more. You can learn more about Amazon Advertising here.

Traditional Advertising

Traditional advertising is the “old school”, mass form of advertising and marketing that the vast majority grew up with, like newspapers, billboards, radio, as well as broadcast and cable television. Traditional advertising tends to be mass communicated and generalized, whereas non-traditional, or digital advertising like programmatic or paid search, is highly targeted and strategically executed.

Looking to Get Started with Programmatic?

Whether you’re at the research or beginning stages of starting a programmatic campaign, or your current campaign needs some TLC, we’d love to help. Give us a shout or learn more about our programmatic advertising services to see how the experts Marcel Digital could give you a hand!

Category:
Paid Media
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Patrick Delehanty - Marketing Manager, Marcel Digital
Author

Patrick Delehanty

Patrick Delehanty has as much knowledge in the digital space as he has beard hairs. He is the highest endorsed member of Moz and a contributor to Business 2 Community.

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