Programmatic Advertising Beginner’s Guide
The eMarketer graph above presents the outlook of programmatic digital display ad spending in the US from 2019 to 2022. It shows that the spending on programmatic advertising has been increasing significantly since 2019. As the largest market of digital advertising, the United States market would be the representation of the whole advertising industry. This article will be explaining the surface of programmatic advertising and give a better sight of how brands need to go for programmatic advertising.
“Advertisers often see their ROMI (Return on Marketing Investment) increased by more than 200%.”
— Ted Sahlstrom, Match2One’s Co-Founder & CMO
What.
Programmatic advertising is an automated process of buying and selling online ad space through software. Machine learning and Artificial Intelligence help the process to be fast and accurate. It targets viewers based on search terms and browsing behaviors such as pages viewed, time, location, content browsed and watched, recency of visit, and many more. This automated process of programmatic software reduces the time and efforts to reach the targeted viewers.
Who.
There two major parties in programmatic advertising, buyers and sellers. Buyers are the advertisers, marketers, and companies who need to display their ads to the viewers. Sellers are the publishers and any website that shows ads to visitors.
How.
According to Match2One a programmatic advertising company, 90% of the programmatic buying process goes through the Real-Time Bidding process. How does the RTB process flow work? RTB processes the buying and selling ads through a real-time auction when a webpage is about to load which is around 0.1 second.
For example, as a visitor enters a website, a request is sent to an ad-exchange with information about the website along with the behavior data of the visitor. Then the information will match with the available advertisers in the RTB auction. In a blink of an eye, ads will be served to the visitor specifically for that visitor.
Programmatic advertising works on a CPM (Cost Per Mille) model. CPM is the price per 1000 impressions that serve on a site. Moran Brayer, Outbrain’s SEO Manager says that the average cost of CPM is between $0.5 and $2. The Interactive Advertising Bureau (IAB) provides a calculator that is useful for advertisers and publishers to accommodate their plan on programmatic ads.
Why.
Here are the top reasons why advertisers need to do programmatic advertising:
1. Targeted
AI and Machine Learning help the ads reach the right viewers at the right time and right place.
2. Real-Time Measurement
Programmatic advertising provides real-time performance of each ad served. Advertisers can modify and improve the ads immediately.
3. Transparent Process
Companies and brands will have full transparency over fees in the programmatic advertising. They would have all information about the budget that has been spent on what digital ads and how the performance is.
4. Endless Possibilities in the Future
With the rise of Artificial Intelligence, Machine Learning, and connectivity, the digital world will keep unveiling more possibilities of digital touchpoints and sophisticated way of programmatic advertising. Programmatic advertising would allow advertisers to reach viewers seamlessly across channels, mobile phones, PC, laptops, tablets, and on every device the viewer has with various format options.
Programmatic advertising will keep dominating all digital touchpoints and ad spending will also be expanding in the future. It will be interesting to see how programmatic will take us to even more engaging and captivating ad experiences.
