The whole advertising industry is moving towards automation – from print and TV ads to digital ones, representing a turning point in its history. In times of traditional display advertising, ads were bought and sold by salespeople. Today’s media buying requires no human touch. It all happens automatically, or programmatically.
Programmatic ad spend is rapidly growing across the world. In the latest report, Persistence Market Research (PMR) points out that the global programmatic advertising market is expected to reach $30 Bn by 2025. North America is considered to be its largest target market, while APAC ranks second.
What Is Programmatic Advertising?
Anyone new to programmatic finds the subject hard to digest – but only at first glance. The general mission remains the same, but several manual maintenance activities are replaced with technology. Campaigns still require continuing optimization and revision, however the process becomes less time consuming and more efficient.
Let’s shed some light on the programmatic meaning. In a nutshell, programmatic advertising technology is a highly automated system of media buying and ad placement on the web. It enables advertisers to automatically target users based on a set of metrics (age, gender, location, the type of action made). From now on, marketers are able to decide in real time what advert they want to serve to the user.
Types of Programmatic Ads Used Today
There are two main types of programmatic advertising: programmatic direct and programmatic RTB. Let’s take a closer look at each of them.
- Programmatic direct
Programmatic direct is an automated method backed by technology and negotiated directly between a buyer and a seller. It is a deal for direct-sold, guaranteed inventory with a fixed price that doesn’t need humans to be involved in optimization. However, it remains more manual than RTB.
- Programmatic real-time bidding
There is a common myth saying that programmatic is the same as real-time bidding (RTB), but they’re not. RTB is just one of the examples of programmatic advertising, using other terms and conditions. It is the process of buying and selling of ad impressions through an auction, occurring during the time it takes for a web page to download. In such a way, RTB is programmatic but programmatic is not limited to RTB.
Best Practices for Programmatic Advertising
Marketers work in a dynamic environment, where the ability to adjust to shifting conditions is of paramount importance. Here is a six-point list of best practices for programmatic advertising essential to devise a solid mobile marketing strategy.
Sharp focus on mobile
Smartphones revolutionized the way we lead our daily life and do business. We make friends, purchase goods, and make payments on mobile. It’s fast, easy, and effortless. mCommerce has become a brand new paradigm, changing the way traditional retail is running business. The fresh report by eMarketer reveals that the mobile share of e-commerce sales is ramping up in the US, accounting for a quarter of all purchases made online in 2017.
Video Advertising Is King
When weighing in on programmatic, marketers put high stakes on video ads. This is the most lucrative opt-in ad format available today. In its another research, eMarketer forecasts that 60% of today’s digital video ad spending is expected to come through programmatic channels. As there are no signs this tendency will slow down – it’s crucial for marketers to pay close attention to programmatic display advertising in general and video ads in particular.
Precise User Segmentation
While it sounds cliche, knowing your audience is key. A lot of marketing campaigns fail because of poor user segmentation. Predictive analytic tools along with a cohort analysis will be of good use. User segmentation is based on building user profiles by demographics and actions taken. It helps tune up a marketing strategy according to different users’ behavior patterns.
Measuring ROI on a regular basis
Measuring ROI is an essential part of mobile marketing. When it comes to programmatic advertising, frequency makes a big difference. In addition to CTR, marketers should focus primarily on the following metrics:
- Brand awareness – a simple search of the company’s name on the Internet will show the number of mentions (positive or negative). Programmatic ads of well-known brands have run longer.
- Website traffic analytics – a regular check of the website traffic numbers is essential for knowing what type of company’s website traffic prevails: organic, direct, or referral.
- Smart Retargeting Strategy
- Retargeting is a proven way to increase conversion rate by winning back doubtful customers. It uses a short line of code, called a tracking pixel. As a rule, customers don’t make a purchase each time they view an ad. They typically interact with a brand at least four times before making a positive decision.
Solutions Built In-house
Outsourcing is good, but having a team of marketing experts at the office is better. Provided that it is armed with the latest tools, it can yield tangible results.
Is Programmatic the Future of Ad Buying?
Most marketers believe that the answer is “yes”, but it’s not that simple. Firstly, it’s hard to measure the exact percentage of advertising being traded programmatically. The general trend is clearly positive, though. Secondly, each media agency has its own opinion on the matter. There are brands – let’s call them innovators – highly interested in buying media through up-to-date programmatic channels. They allocate a considerable share of their media budgets and have corresponding departments to handle this task. Other agencies are pretty skeptical to programmatic buying. One thing is clear: marketers need to educate themselves on the subject and dig deeper for the opportunities digital programmatic brings. Meanwhile, the issue is still pending.
The Benefits of Programmatic Advertising
Ever wonder what benefits programmatic advertising could bring? Look no further. Here is a list of key advantages programmatic solutions can offer to your business.
- More sophisticated mobile marketing campaigns
- Versatile and flexible targeting options
- Eliminating the need for intermediaries
- Cutting down on advertising waste
- Reallocation of human resources for different purposes
To sum up, programmatic advertising doesn’t kill creativity as one might think. It offers a brand new approach to creative thinking. As we’re heading towards a programmatic future, it is important to have a sound knowledge of how programmatic advertising works and contributes to the mobile marketing ecosystem.