programmatic advertising is a way to automatically buy and optimize digital campaigns, rather than buying directly from publishers.
It’s designed to replace human negotiations with machine learning and AI-optimization. The goal is to increase efficiency and transparency for both the advertiser and the publisher.
This is done through real-time auctions where ads are bought at the same as a visitor loads a website.
Who uses Programmatic Advertising?
Programmatic advertising exists in a wide range of digital channels, including display, mobile, video and social.
Traditional offline channels are well way on their way to become digitized too.
We’re starting to see out-of-home channels advertise programmatically through digital screens on bus stations, shopping malls, and billboards.
Previously, programmatic has been reserved for larger budgets and media agencies, but the rapid rise of self-service tools (like Match2One) gives smaller brands increased access to the technology and offers them the ability to compete with larger brands without going through expensive middlemen.
The use of Artificial Intelligence and machine learning to buy advertising in real-time, instead of going through human negotiations and pre-set prices.
What is Real-Time Bidding (RTB)?
RTB is a way of buying and selling ads through real-time auctions, meaning transactions are made in the time it takes to load a webpage; around 100 ms.
As a visitor enters a website, a request is sent to an ad-exchange with information on the website along with visitor data.
This information is then matched against available advertisers and a real-time auction takes place between the advertisers that match the criteria.
For instance, let’s say you visit a website that sells organic dog food, but you don’t make a purchase. Later you visit your favorite news site, and suddenly you see ads about organic dog food everywhere!
These ads are placed in front of you with the help of Real-Time Bidding.
The company selling dog food has simply stated: “I want to show my ads on these websites – but only to visitors who previously visited my site and didn’t make a purchase.”.
During the time it takes you to load the website an auction takes place between the organic dog food brand and everyone else who’s also interested in showing you ads.
The winning bidder gets to display its ad to you on the publisher’s website.
Historically, advertisers would place ads on websites they believed matched their target audience – so a company selling motorcycle helmets would maybe single out blogs about motorcycles, and manually buy placements on these sites.
Their banner ads would then be displayed to all visitors of that website, regardless of whether they’re relevant customers or not.
Real-Time Bidding allows for better and quicker targeting, enabling ads to be bought and sold on a per-case basis, where visitors who are in your target audiences will be subjected to the ad.
What is Programmatic Targeting?
There are a number of ways you can choose to target your ads with programmatic advertising, to achieve better accuracy and results.
These are the most common ways advertisers use to target their ads:
Contextual Targeting
Contextual targeting aims to show ads based on the context of a website. For instance; a fashion brand might choose to be seen on Vogue Magazine’s site, but a company selling financial services may have better luck with Forbes.
Keyword Targeting
A type of contextual targeting that focuses on serving ads based on specific keywords. For instance, if you sell bicycle spare parts you could supply a list of keywords based around that subject. You might want to be seen in articles mentioning cycling or bicycle safety, but not motorcycle gear or electric bicycles.
Your list of keywords is matched to the keywords used in the article to provide the best match for your ads.
Data Targeting (Audience Targeting)
Ads can also be shown based on user’s cookies rather than the context of a website – meaning that a user who’s previously visited your financial services site could be served an ad for your brand even if they’re visiting Vogue next, since they have already shown an interest in what you’re offering.
Geo-Targeting (Location-Based Targeting or Geo-Fencing)
Brands use geo-targeting to reach customers that are relevant to their locality. If you run a physical clothing store in Paris, it might not make sense to show ads to people who are based in Rome.
For international brands or online services, geo-targeting can be used to serve language-specific ads tailored to audiences in a certain country.
Retargeting
On average 2% of visitors convert when they visit your site. Retargeting is aimed at bringing back the other 98%.
Whenever a potential customer visits your site a cookie is placed on their computer. This information can later be used to target ads to this specific person, increasing the chances of them returning to buy from you.
Retargeting is a highly efficient way of re-engaging people with your brand since they already have a relationship with you.
Conclusion
The future is bright for programmatic advertising and right now is an excellent time to get in on a rising trend.
Accessibility has never been better, especially for smaller brands, and hopefully, this article has given you a better view of what it’s all about.
If you’re excited to try programmatic and see what it can do for your display campaigns,
Luxe Agency is an excellent place to start!
We offer a self-service programmatic platform with no minimum spend and you can be set up with your campaign in minutes.