What Is Programmatic Advertising & How Does It Work?

Are you tired of getting minimal ROI despite spending heavily on ad campaigns?

You might have the most creative ad ideas, executed perfectly to create the best ad assets, but that doesn’t guarantee high conversion rates.

Why?

Simply put, if your ads aren’t reaching the right audience, you’re not going to get the results you want.

So, what’s the solution?

It’s programmatic advertising.

What Is Programmatic Advertising?

If you’re in the digital space, you‘ve likely heard that programmatic ads are a game-changer.

Programmatic advertising is the process of automatically buying ad space across multiple channels.

Using analytics-driven software, programmatic advertising campaigns ensure your ad reaches the right audience at the right time on the right device.

This method is popular with the majority of modern-day businesses, regardless of whether they are a global enterprise, start-up or SME.

By combining automation and precision-targeting, programmatic advertising has quickly become a more reliable and efficient technique compared to traditional advertising methods.

With programmatic advertising campaigns, advertisers can strategically place native ads on a publisher’s platform.

These ads blend seamlessly with the site’s content, capturing the attention of visitors while remaining less susceptible to ad blockers.

Types of Programmatic Advertising

Let’s find out what the different types of programmatic advertising channels are and which one might work best for you.

Display Ads

The most common types of programmatic ads seen on a publisher’s website are display ads.

Display advertising is usually placed in the header, footer, or sidebar of a web page.

Programmatic display advertising can be an image, a banner, or an animation.

Advertisers are charged usually on a pay-per-click (PPC) or cost-per-thousand-impression (CPM) basis.

These types of ads do not disrupt the user experience of the visitors but they can sometimes be overlooked by visitors.

Video Ads

Video programmatic ads are one of the most popular programmatic ad formats advertisers prefer to showcase their content to the target audience.

There are mainly two types of video ads: in-stream and out-stream ads.

In-stream video ads can be played at the beginning (pre-roll), middle (mid-roll), or end (post-roll) of a video stream, such as a YouTube video.

Mid-roll ads displayed in the middle of a video may cause the audience to be irritated as their viewing experience is ruined.

How Does Programmatic Advertising Work?

Programmatic advertising simply connects advertisers with relevant publishers.

These interactions are facilitated through:

• Demand-Side Platforms (DSP): where advertisers place their ad space requirements, such as Facebook Ads Manager.
• Supply-Side Platforms (SSP): where publishers register their digital ad space to find them the best deal, such as Google Ad Manager.

Let’s say an advertiser wants to promote their services or products through programmatic marketing campaigns.

The first step will be to place the requirements in a DSP which will automatically contact several SSPs to find the most relevant publishers for placing the ads.

SSPs already have a pool of publisher websites enlisted for renting out online ad space.

DSPs place the ads on several publisher websites and monitor the performance.

Using algorithms and data management, DSPs determine the best publisher websites where the target audience is most likely to visit.

While it may sound complicated, the programmatic media buying process happens in a matter of seconds.

The bidding is done automatically through the DSP after analysing real-time data and target parameters.

As soon as the impressions are sold, the ads are displayed on the publisher’s website, with their performance monitored in real-time.

The process is repeated when a visitor clicks on the ad and is redirected to the advertiser’s offer page.

Out-stream ads appear independently from video content.

They can be displayed within written content, as banner ads, or as pop-ups, ensuring they reach viewers even outside traditional video platforms.

DOOH Ads

DOOH ads are placed on digital billboards in high-traffic locations like city centres and shopping malls.

Animations, video ads, and interactive content can be displaced to the viewer using DOOH rather than boring traditional advertising which contains static content.

One drawback of DOOH Ads is it is difficult to precisely track the ad performance.

However, features like real-time changes and ad placements based on target audience demographics and peak hours make DOOH a lucrative ad format for advertisers.

Benefits of Programmatic Advertising

Precise Targeting

Programmatic targeting uses first-party data, cross-device programmatic ad campaigns, and real-time data analysis to make sure that your target audience sees the ad at the right time when they are using the right device.

Improve Efficiency

Even though what happens in the backend of programmatic advertising is complicated, the time required for placing ads on a publisher’s website is just a few seconds.

With programmatic advertising, there is no need to place quotes, negotiate prices, or monitor ads.

All these processes happen automatically and much more efficiently than through traditional ad-buying platforms.

Wider Reach

Features like cross-platform campaigns and real-time monitoring in programmatic advertising allow advertisers to display ads to more people quickly.

Access to more data, such as first-party signals and cross-platform user activities, makes it easier to reach more people and scale the business efficiently.

Cost-Effective

The cost of programmatic advertising is much lower than other types of traditional advertisement options like display ads, direct ads, and more.

It is suitable for businesses with a smaller budget to advertise their product and services to increase awareness and grow sales.

More Control

Programmatic advertising is very transparent with ad placements and other important metrics.

Advertisers know exactly on which publisher platforms their ads are being placed.

Having access to important data helps advertisers to pivot their strategy in case the results are not satisfactory.

How To Choose The Right DSP

We have listed down some essential factors that you need to consider before choosing a DSP for your programmatic advertising needs:

Ad Inventory

The purpose of running ads is to make sure that the target audience views them.

That won’t be possible if your DSP has a poor collection of websites and platforms in their advertising inventory.

There are some DSPs that focus on specific niches while others differentiate themselves by focusing on device types like desktop or mobile.

To run ads smoothly, your DSP has to have established servers in the target country.

The bidding happens in real-time and instantly, which is not possible without having local servers in your target country.

Targeting Options

One of the major benefits of programmatic advertising is precise targeting.

Most DSPs come with basic targeting features like device, website, and location targeting.

But, if your DSP doesn’t provide you with advanced targeting features, precision targeting won’t be possible.

For a DSP to be able to target specific audiences, it needs to have smart data processing and analysing capabilities.

The right DSP would be able to leverage first-party data to profile your ideal customer and find suitable publisher websites to run ads on to reach them.

Costs

Almost all DSPs require advertisers to commit a minimum spending.

If that threshold is not met extra service fees would be required to pay.

Some DSPs could have a minimum ad spent every month while others have a yearly requirement.

Pricing options are also an important consideration.

Ideally, a DSP offering CPM, CPC, and CPA pricing options is what you should be looking for.

Analytics Metrics

A major advantage of programmatic advertising is getting real-time analytics to ensure the ad budget is spent efficiently.

An ideal DSP has advanced tracking features to calculate total ad spending across different publisher websites and present data-driven insights in the end-of-campaign report.

With restrictions being placed on third-party cookies, it is crucial to choose a DSP that can overcome this limitation and still ensure that ads reach the ideal customers.

Support

Having a helpful support team always available is not only useful but helps to build a stronger relationship between your business and its chosen DSP.

Whether you’re looking for technical support, comprehensive onboarding, or campaign assistance, a DSP with a 24/7 support team and dedicated account manager is ideal.

Not having access to support in the time of need can lead to delays and revenue loss for your business.

Security

Any sensitive customer data must remain safe.

When choosing a DSP, make sure to enquire about their data security and privacy policies.

You also need to be aware of the type of websites your ad is being displayed on.

Publishers whose values don’t align with your brand should be avoided.

Different DSP Platforms

There are many DSPs available for programmatic advertising, making it a daunting task for advertisers to select the best one.

Let’s take a look at two of the best DSP platforms and what they offer:

Amazon Ads

You can display multiple types of ads on ads on Amazon like audio, video, display, and device-specific ads.

Amazon offers tools, such as a video creative builder, for advertisers to create customised ads for their target audience.

Amazon offers both managed and self-service options to advertisers.

If you opt for managed services, it will require a minimum spend of $50K which is variable depending on your location.

You also get features like audience insights, amazon-specific analytics, and A/B split testing with Amazon ads.

If you want to promote products to your e-commerce audience, Amazon is the best choice.

Amazon is one of the biggest retail giants in the world, offering you to strategically target its huge customer base.

You can also market your product to users of other Amazon-owned platforms, like Audible and Zappos.

Google Display And Video 360

Google has ad formats such as audio, video, display ads, TV, and other types of programmatic advertisements.

Google Display and Video 360 offers training to users to master their 5 modules.

Advertisers can run cross-channel campaigns allowing them to retarget high-intent buyers on the right device.

Analytics 360, YouTube, and other third-party integrations make running an ad campaign more efficient.

Google also provides audience management features to create audience lists from data collected by running targeted ad campaigns.

These lists can be used to retarget potential buyers for other similar products and services.

Choose BFJ Digital As Your Programmatic Advertising Agency

Programmatic advertising offers the chance to exponentially boost your sales—if executed correctly.

While there’s a learning curve to mastering programmatic advertising, the results are undeniably impressive.

However, integrating programmatic advertising into your marketing strategy can be complex and time-consuming.

So, wouldn’t it be easier to leave digital advertising to the experts?

As a premium programmatic advertising agency, BFJ Digital specialises in creating a unique, data-driven programmatic advertising strategy.

Our programmatic advertising services ensure your ads are reaching the right targets at the right time.

Partner with one of Brisbane’s top programmatic advertising companies and achieve your goals by running effective programmatic advertising campaigns.