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Understanding Programmatic Advertising

Programmatic advertising is a method of buying and selling ad space that uses automated technology to place ads in front of the right audience. It leverages data and advanced algorithms to target specific demographics, ensuring that advertisers can efficiently reach their desired audience without the need for manual intervention.

Programmatic Advertising vs. Display Ads

You might be wondering how programmatic advertising differs from display ads. Simply put, programmatic advertising is a process of automated ad buying, while display ads refer to a specific ad format. Display ads, such as banners, can be part of a programmatic campaign but are traditionally bought through networks like the Google Display Network. In contrast, programmatic advertising often involves multiple platforms to manage a campaign, whereas display ad campaigns typically rely on a single ad network.

Pros and Cons of Programmatic Advertising

Before deciding if programmatic advertising is right for you, consider these pros and cons:

Pros:

  1. Advanced Targeting Options: Programmatic advertising offers sophisticated targeting options, including contextual and interest-based targeting, which helps pinpoint your exact audience.
  2. Utilization of Data: You can use first-party data for more precise targeting or rely on second party data or third-party data segments if your own data is limited.
  3. Scalability: Scaling your efforts is straightforward—simply increase your ad budget to reach a larger audience.
  4. Real-time Reporting: Programmatic platforms provide real-time insights and data, allowing for quick adjustments to improve performance.
an outline of programmatic advertising and what it does

Cons:

  1. Lack of Manual Publisher Selection: The automated nature of programmatic ads means you can’t always choose specific websites for your ads, potentially leading to placements that are not ideal for your brand.
  2. Risk of Traffic Fraud: While most networks combat invalid clicks and traffic fraud, there’s always a risk, which could affect your ad budget. However, some programmatic advertising platforms have ways to combat serving bot traffic, like the Untitled DSP.

How Does Programmatic Advertising Work?

Several platforms work together to facilitate programmatic advertising:

  1. Supply-Side Platform (SSP): Publishers use SSPs to sell ad space automatically, managing their inventory and connecting with demand-side platforms and ad exchanges.
  2. Demand-Side Platform (DSP): Advertisers use DSPs to buy ad impressions on publisher websites at pre-determined prices, managing all their ads in one place. You can learn more in our “What is a DSP” blog post.
  3. Ad Exchanges: These platforms enable the buying and selling of ad inventory through real-time bidding, connecting DSPs and SSPs.
  4. Ad Servers: Once an ad space is bought, ad servers display the ad on the publisher’s website.
  5. Data Management Platform (DMP): These platforms store and organize audience data to enhance targeting capabilities. With Untitled’s DMP, called Distilled, users can onboard data, build audiences, identify anonymous website visitors, and push audiences to destinations.
untitled's dsp that allows users to take advantage of programmatic advertising

Example of Untitled’s DSP for programmatic advertising

Example Workflow:

  1. A publisher lists ad inventory on an SSP.
  2. Advertisers bid for impressions through a DSP, using data from a DMP.
  3. The highest bid wins, and the ad is served on the publisher’s site via an ad server.

Types of Programmatic Advertising

Programmatic advertising encompasses various approaches:

  • Real-Time Bidding (RTB): An open auction where advertisers bid in real time for ad impressions.
  • Private Marketplaces: Publishers offer ad space to a select group of advertisers, allowing more control and potentially higher prices.
  • Preferred Deals: Publishers sell premium inventory to selected advertisers at a fixed price before it becomes available on open markets.
  • Programmatic Direct: Direct negotiation between an advertiser and a publisher for ad spots.
Programmatic Ad Formats

Programmatic ads can appear across multiple formats and media:

  • Display Ads: Banner ads displayed in various website locations.
  • Video Ads: Ads shown within video content or as standalone videos on websites.
  • Native Ads: Ads designed to blend seamlessly with website content.
  • Television Ads: Traditional TV commercials bought programmatically.
  • Digital Out-of-Home (DOOH) Ads: Ads displayed on digital billboards in public spaces.
  • Other Formats: Including over-the-top (OTT) ads, connected TV ads, and in-app ads.
Programmatic Ad Formats

How to Get Started with Programmatic Advertising in 5 Steps

Ready to dive into programmatic advertising? Follow these five steps to launch a successful campaign:

audience targeting in untitled dsp

1. Set Goals

Understanding what programmatic advertising is and setting clear goals is the first step. Determine whether your objective is to improve brand awareness, drive website traffic, generate leads, or achieve another specific outcome. Each campaign should focus on a single goal, enabling you to optimize your ads for the best results.

2. Segment Your Audience

Use your existing buyer personas to define your target audience for your programmatic advertising campaign. Depending on your demand-side platform (DSP), you may have various targeting options, such as:

  • Demographics: Age, gender, income
  • Location: Geographic areas
  • Interests: Hobbies, activities
  • Buying Intent: People looking to purchase specific products or services
  • Device: Desktop, mobile, tablet

Being specific with your target audience helps avoid wasting your ad budget on irrelevant users and allows you to tailor your ad messaging more effectively.

3. Choose the Right DSP

Selecting the right DSP is crucial for a successful programmatic advertising campaign. Here’s what to look for:

  • Extensive Targeting Options: Ensure your DSP offers the targeting capabilities you need to reach your audience.
  • Multiple Ad Formats: Choose a DSP that supports various ad formats, such as banner ads, video ads, and native ads.
  • Real-Time Analytics: Real-time reporting allows you to quickly respond to performance changes.
  • Responsive Customer Support: Reliable customer support is essential for resolving issues promptly.

4. Create Effective Ads

After choosing your DSP, set up your campaign and create your ads. Here are some tips for effective ads:

  • Choose the Right Ad Format: Consider your audience’s preferences and your available resources when selecting ad formats.
  • Use Personalization: Personalized, dynamic ad creatives can lead to better click-through and conversion rates. Utilize data points such as geographic location, interests, and buying intent for personalization.
  • Refresh Creatives Regularly: To combat ad fatigue, update your ad creatives frequently. Regularly refreshing your ads keeps them engaging and allows for split-testing to determine the most effective designs.

5. Launch and Monitor Your Campaign

Once everything is set, launch your programmatic advertising campaign. Monitoring is crucial—keep an eye on performance metrics and be ready to make adjustments. Watch for signs of ad fraud to protect your budget and ensure the best results from your campaign. By understanding what programmatic advertising is and following these steps, you can create a robust and effective campaign that reaches your target audience efficiently.

untitled dsp line items
Add Programmatic Advertising to Your Digital Strategy

Understanding programmatic advertising gives you the tools to start your own campaign. With its advanced targeting, scalability, and real-time insights, programmatic advertising can be a powerful addition to your digital marketing strategy. Start leveraging this technology to enhance your reach and effectiveness today.

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Kramer Caswell

Author Kramer Caswell

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