How to Use Programmatic Advertising in 2021 – Quite frankly, programmatic advertising is a smart and organized way to handle your ad campaigns.
Although it has been around since 2014, programmatic advertising has become increasingly popular as a digital marketing trend in 2021.
If you’re a buyer or seller of advertisements, by leveraging programmatic advertising, you can gain more conversions with data-driven advertisement campaigns.
That is exactly the point of programmatic advertising. In this article, you will gain knowledge of how to use programmatic advertising in 2021 to grow your business.
What Is Programmatic Advertising?
Because of the complex nature of the subject, programmatic advertising has often been regarded by some as the ‘black box’ of online marketing, composed of jargon and almost exponential in its growth.
Thus, it can be quite a difficult subject to wrap your head around. However, in its most basic form, programmatic advertising refers to the automated transaction of buying and selling advertising online.
In other words, it is the process of utilizing several platforms to sell inventory on publishing sites and buy inventory as well as place ads on a publisher’s site.
Another term used to describe it is programmatic marketing. Previously, it used to be a manual process involving requests for proposals (RFPs), human negotiations, as well as manual insertion orders.
Now, however, the entire transaction, from beginning to end, happens in milliseconds and involves various platforms.
Basically, programmatic advertising has become a more efficient data-driven method of purchasing highly relevant audiences at scale.
In fact, it is the most effective way to buy digital ads and have your ad live in the present advertising landscape.
How Programmatic Advertising Works
You’ve probably seen the term “programmatic advertising”, or “programmatic display ads” thrown around a couple of times as a digital marketer.
You’ve also probably already read up articles on how programmatic advertising can improve the overall ad performance for your business or brand.
It is quite alright if you haven’t fully grasped exactly how the programmatic process works.
Here’s a simple guide to the most popular formats of programmatic advertising from start to finish so you can better understand the process:
Now, the moment a particular viewer arrives on a website that utilizes programmatic marketing, the automated bidding set to deliver an ad to this viewer commences.
The publisher puts up the ad space for the current viewer on their supply-side platform (SSP).
The SSP poses as the seller for the publisher and lets advertisers understand the characteristics of the site, user, and ad space that empowers DSPs to make their bids. Fundamentally, they market the product (the ad space) for sale.
As soon as the SSP receives the information on the ad space, they get to work by analyzing the user’s cookies to ascertain factors such as their demographics, geography, interests, etc.
At this stage, the corresponding demand-side platform (DSP) scrutinizes the information on the user provided by the SSP.
DSPs act as a sort of representative for advertisers to select ad space that aligns with the advertiser’s budget and targeting parameters.
Essentially, it assigns a value to the ad placement based on the website and user’s characteristics.
Here, the DSP makes a bid on the ad placement on behalf of the advertiser. The entire process occurs in real-time and this is exactly why programmatic advertising can sometimes be referred to as RTB (real-time bidding).
The SSP, as soon as it receives the bids from several DSPs, instantly chooses the winner. Several bid strategies are out there for different SSPs.
They include client-side, waterfall bidding, and header bidding with the latter popularly considered the most efficient and fair.
After the winning bid is chosen, the SSP goes ahead to display that ad to the user on the publisher’s site.
As we reiterated earlier, the overall procedure of choosing a programmatic display ad happens in milliseconds, and at the same time the web page loads for the user.
Types of Programmatic Advertising
As against the regular media buying process, programmatic advertising hardly ever involves publishers and advertisers working on a one-on-one basis to serve ads to web visitors.
The type of advertisement and its format largely depends on the type of programmatic deal you choose.
Here are some well-known programmatic advertising types:
1. Real-Time Bidding (RTB)
Real-Time Bidding Ad type or RTB is an open auction marketplace for buyers and sellers of ads.
Due to the growing popularity of RTB, it has become synonymous with Programmatic advertising.
In Real-time bidding, ad slots are open to anyone through an open auction bidding system. Here, advertisers can select ad slots made available, and the highest bidder will get an ad slot.
Remember that this process happens algorithmically in a matter of seconds. The great thing about RTB is that it is quite simple to set up and optimize.
However, its lack of transparency from the advertisers’ viewpoint poses its only major downside.
Basically, this drawback means that advertisers are aware of the general category where their ads are placed but have no idea of exactly which publisher website.
2. Private Marketplace
The Private Marketplace programmatic ad type is not so different from the Real-time bidding( RTB).
In fact, the only thing that sets it apart is that the private marketplace platform is available as an “only invite basis.”
In this platform, private or closed auction publishers put aside a premium ad inventory which is reserved only for a special selection of few advertisers.
Depending on publishers’ huge benefits, private marketplaces are patronized by websites that have a wide readership.
Also, unlike the conventional RTB programmatic type, advertisers here actually know the websites where their ads are placed.
This way, they can instantly analyze and check the status of their return on investment (ROI).
3. Preferred Deals
The preferred deals type of programmatic advertising involves advertisers choosing the ad inventory at a fixed rate.
This action is done right before the deal is made available to the private marketplace with an open auction to follow afterward.
Preferred deals, in terms of programmatic advertising, can also be called “spot buying.” The method here has to do with both marketing parties agreeing on specific terms like targeting, pricing, etc., beforehand.
In this variant of programmatic advertising, the traditional approach of media buying is employed.
Also referred to as automated guaranteed or programmatic direct, programmatic guaranteed involves the ad buyer and seller negotiating terms on a one-on-one basis.
Benefits of Programmatic Advertising
In case you’re wondering exactly why your brand or business needs to utilize programmatic advertising, here are five good reasons why you should consider it.
1. Smart way to spend your advertising budget
Programmatic display advertising lets you easily target users on a grand scale. Since you have access to incredible amounts of GDPR-compliant data, you get the opportunity to target viewers with the perfect message, in the right place, and at the right time.
Thus, you’re basically using your ad budget more intelligently, cutting off waste on viewers who are unlikely to be interested in your offer or product.
2. Real-time analytics
In programmatic marketing, you can measure the performance of each ad in real-time. Basically, advertisers don’t have to wait for an excel sheet from their media agency several weeks after the ads go live as it would be too late to optimize a live campaign.
With programmatic marketing, advertisers can conveniently adjust and optimize ads while it is live.
This means you get to optimize and adjust ads while also testing and improving results as well as have clear oversight on each ad spend.
3. No middleman required
Previously, before programmatic advertising became a thing, brands were forced to rely on agencies and third parties to handle their ad spend.
However, by leveraging programmatic advertising, brands now have full transparency over fees. Also, you’ll get to know exactly where and how much of your money is being spent on what.
4. Contextual targeting using keywords
Although you have access to relevant user data, programmatic marketing doesn’t necessarily have to involve knowing everything about a user.
This is where contextual targeting comes in as it provides a smooth – and much less intrusive – way of reaching your desired audience.
With this method, you can target users based on certain keywords and the contextual relevance of a page.
5. Wide, multi-channel reach
As the number of digital touchpoints of your average user continues to soar, your advertising should also work towards keeping pace.
Now, this is where programmatic marketing takes preeminence. It lets you reach audiences across several devices be it on mobile, tablet, desktop, in-app, TV, etc. – the possibilities are remarkably endless!
The Different Forms of Programmatic Advertising
Today, programmatic advertising or marketing now covers a diverse range of advertising formats. Barely 10 years ago, it was usually just plain display advertising but now there’s a variety of different and growing options. Some of them are discussed below:
It is only logical for us to start with the oldest form of programmatic advertising – display. However, rather than being just static, ads have evolved to be more dynamic.
Frequent technological developments, mobile optimization, as well as better use of data have seen new opportunities sprout.
As technology continues to develop, a lot of marketers have welcomed programmatic creative strategies that focus on viewers, with the right offer and at the best time.
The buying and serving of digital video programmatically across various channels is now a major strategy being employed by many marketers.
A programmatic advertising video comes in two unique forms. These are the instream and the outstream video ads.
On some occasions, however, in-banner video ads are often categorized as a variant of the outstream ad.
3. Native and social
The native and social programmatic ads sync into the content either on a website, social network, or other application.
For instance, it could be for sponsored content. Thus, setting up contextual targeting in tandem with tailoring your ads is very crucial.
In addition, DSPs now give advertisers the chance to buy programmatically. Basically, you can do this across the main social ad networks, and unsurprisingly, social video appears to be particularly quite popular.
With the rise of technologies such as Amazon’s Alexa and the increase in streaming applications like Spotify, programmatic advertising has quickly seen the emergence of another format – voice.
The great thing about voice is that it offers a massive source of both contextual and user-focused targeting.
And with Google offering advertisers the opportunity to buy programmatic audio ads through its DSP, voice as a format is rapidly maturing.
5. Digital out-of-home (DOOH)
5. Digital out-of-home (DOOH)
Gradually, programmatic is sifting through the world of out-of-home advertising following the adoption of digital signage.
What this entails for the cumbersome production process of advertisers, agencies, media sellers, and printers is inevitable extinction.
In its place, however, integration over the several existing programmatic platforms is presenting the possibility of real-time DOOH ad optimization and reactivity.
At the moment, programmatic television ad spend is not really prominent. However, top industry players, including Google, Netflix, and SKY, are setting up the foundation required to pave the move to programmatic TV.
Regardless of this, of all the programmatic forms mentioned here, the television format is still in need of more development.
How to Buy Programmatic Advertising
How to Buy Programmatic Advertising
Before you start with programmatic buying, it is pertinent to ask the right questions and have a clear strategy in place for what you actually want to achieve with it.
Thus, the three major questions you need to ask yourself first are:
- Can programmatic advertising help me reach our target audience?
- Should I utilize programmatic advertising for brand awareness or to drive conversions?
- How will leveraging programmatic advertising enhance my bottom line?
As soon as you can figure out the answers to these questions above, it becomes much easier to determine the main points you should prioritize in terms of budget and ad placements for your programmatic advertising strategy.
Also, after selecting the perfect strategy, you must choose the right DSP for your brand as well. There are tons of providers out there so be sure you are asking the most relevant questions from your DSP too.
Major Factors to Consider When Choosing a DSP
You’ll need to start by first considering the audience you are trying to reach. Which DSP delivers the highest reach, segmentation, and channels relative to your target market?
Keep in mind that SSPs are better than others in some nations. So, be sure to choose the DSP that aligns most with your markets.
Also, ensure you pay attention to what publishers your DSP associates with in each target market.
How are you charged by your DSP? Are you charged on a cost-per-thousand (CPM) or cost-per-click (CPC) basis?
Generally, DSPs that charge on CPM are actually more transparent in relation to their cost margins.
Consider what support facilities your DSP provides. You may want a DSP with an agency-style set-up.
This way, you’ll be able to completely take advantage of the support you require in launching and optimizing your campaigns.
In addition, try to find out if your DSP can run an effective cross-channel strategy in case you require it.
Check whether a DSP can synchronize with your chosen data management platform (DMP) or creative management platform (CMP). However, smaller DSPs should be more flexible in terms of integration.
Lastly, do your own research on what you really need, especially in terms of targeting, optimization, and control.
Remember, nothing good comes cheap, so if you want excellent quality, be prepared to pay for it. (If the price is too low, don’t be surprised to expect hidden fees)
Following your strategy hand-in-hand with the right technology, your programmatic marketing should work similarly in the same way any other digital marketing campaign should.
Don’t forget to test different messaging and creatives, target various personas, and experiment with new placements as well as bid strategies.
How to Create Programmatic Display Advertising
There are two unique ways marketers can employ to create programmatic display advertising. These are by using a creative management platform (CMP), or not using one.
With a CMP
By using a creative management platform, CMPs are in charge of any coding and can initiate fast mass production of dynamic display advertising.
In addition, CMPs help you save time, deliver better ads, and are more favored by marketing teams that do huge, creatively ambitious, and precisely data-driven display campaigns.
Advantages of Using a CMP
In truth, a creative management platform significantly lowers the time it takes to create, measure as well as put up a programmatic ad campaign.
With a CMP, you can conveniently enable quick A/B testing of campaigns as well as the real-time optimization and control of published ads.
In addition, CMPs emphasize display ad production mainly on design. There are lots of companies offering CMP services with some of them integrated with all the major programmatic networks thus, making publishing to your favorite network simpler.
Without a CMP
You can create programmatic display advertising entirely on your own without the need to hire a CMP.
However, you will have to manually design and then code display ads on your own. If you like to do stuff by yourself, then you should have no problems finding tutorials and templates online that’ll show you how to do this.
But keep in mind that this process is extremely slow. And if coding isn’t one of your major strengths, then be ready to hire a professional who possesses knowledge of HTML5 and CSS, as well as, the creative skills of a designer.
Coupled with this, the whole process without a CMP is repetitive and highly difficult to scale.
In addition, it involves a large number of manual tasks, several stakeholders and is ultimately time-consuming. Simply put, it is basically unworkable for modern programmatic advertising.
Essential Programmatic Creative Technologies
When paired with programmatic buying, programmatic creative technologies allow marketers to reach their customers at the best possible time. They are also able to present the customers with the most relevant message.
When data is analyzed from these processes, you’ll be rewarded with even bigger relevancy via personalized messaging. Hence, letting marketing teams deliver improvements in performance using ad customization.
Generally, programmatic customization is now considered standard practice for most marketing teams.
According to Econsultancy’s Nikki Gilliland, “vast amounts of data mean[s] that advertising creative can dynamically change to be more relevant to customers, with ads adapting to factors like location, device, weather, time, and demographics”.
But what steps can we take to achieve this?
Below are three vital programmatic creative technologies display advertisers have to utilize:
1. Creative management platforms (CMPs)
As discussed earlier, CMPs allow marketers to quickly create and post high-quality programmatic display advertising across a variety of formats.
It also helps marketing teams in using data to customize images and messages based on real-time ad analytics.
By utilizing a CMP, every member of the in-house digital marketing team can be an ad factory.
Through smart automation, teams get to create near countless display ad variations for multi-audience, multi-market campaigns.
In addition, CMP makes the use of other programmatic creative technologies like dynamic creative and dynamic creative optimization more convenient.
These would otherwise have been too complex or impossible to undertake without CMP. The reason is that both dynamic creative and dynamic creative optimization (DCO) require tricky HTML5 coding in addition to certain repetitive design procedures.
Fortunately, CMP performs all of these automatically.
2. Dynamic creative
Increasingly progressing in adoption and sophistication, dynamic creative’s ad tech infrastructure is designed to complement programmatic media buying.
Its more adaptive use of audience data, optimized bidding strategies based on analytics, segmentation, and targeting strategies has seen dynamic creative continue to soar.
This programmatic creative strategy works by utilizing key factors such as a viewer’s location, what they are reading, the device they’re using, the weather, and several other information to pick the most suitable pre-built display ad to show the customer.
Furthermore, dynamic creative also leverages data feeds in a display ad that is set to deliver the most relevant or up-to-date information for a specific user.
That’s why a sports betting company based in France can use dynamic creative to retarget a customer based in the UK with the latest odds and ad creative for an English Premier League game across both mobile and desktop devices.
But before a dynamic creative can be achieved successfully, you must have the right programmatic creative technology in place.
Thus, to build the ad variations needed, easily and rapidly, we recommend combining CMP, data management platform (DMP), and demand side-platform (DSP).
3. Dynamic creative optimization (DCO)
Considered as the next level of dynamic creative, dynamic creative optimization (DCO), is presently the best combination of programmatic creative technologies available to marketers in the business of display advertising.
With DCO, marketers can optimize and customize the best creative combination for a specific section of an audience.
When you make use of CMP, these ad variations can be conveniently designed and optimized in real-time via a series of A/B testing hence, improving ad performance as well as relevancy.
DCO, however, has various forms. For instance, there’s the template-based DCO which is coded manually and pre-programmed.
What this means is that although ads can be rendered in real-time, what adapts to user data consists of only elements like text and images.
While there’s no problem with doing this, it can, however, give you boring ads having just product feeds with a handful of personalized text only.
Ultimately, the most effective form of programmatic creative is DCO combined with CMP. You can get more creative ad concepts with the use of a selection of alternative ad variations when you fuse CMP with a DCO platform.
DCO and CMP, when used together, deliver higher creative control and impact via creative ad designs.
Programmatic Advertising in 2021 and Beyond
Indeed, programmatic marketing isn’t something new, however, it is consistently changing.
New technologies, best practices, and regulations make this a promising element of digital marketing.
That said, what exactly should you be looking out for in programmatic advertising in 2021 and beyond?
1. The never-ending battle over privacy: personal data and how advertisers can leverage it
The General Data Protection Regulation (GDPR) transformed the European marketing industry in 2018 placing restrictions on the usage of third-party data.
It also gave instructions on how advertisers are expected to use personal data for targeting.
2. Cookie-less tracking
As a result of the growing difficulties being faced with different browsers when it comes to tracking, cookies are slowly becoming ineffective and less reliable for targeting.
In 2021 and beyond, we expect to see the emergence of deterministic and probabilistic tracking. Get more information on those subjects here.
3. AI’s influence on media buying and programmatic creative
Artificial intelligence is relevant in several fields today and programmatic advertising is not left out.
As a matter of fact, there’s already a massive impact in personalization and optimization of creative following the emergence of dynamic creative optimization (DCO).
In addition, IBM’s AI Engine, Watson, has proven that it can significantly lower CPC by leveraging AI technology.
4. In-house programmatic advertising
As transparency in digital marketing is a crucial consideration, it shouldn’t come as a surprise to see many brands taking ownership of their programmatic ad production and buying.
As we hinted at before, programmatic advertising is consistently evolving thus, staying ahead of the trending technologies and strategies is a major aspect of an effective programmatic strategy.
What is programmatic creative?
Programmatic creative refers to the automated process involved in the creation, publishing, and optimization of display advertising.
Basically, it is an umbrella term used to describe a collection of strategies and technologies which are geared at including scale, speed, performance, and relevance to display campaigns.
Also, programmatic creative comes following the adoption and development of several programmatic marketing technologies.
And it should not be confused with programmatic advertising which succinctly has to do with the automated transaction of ads buying and selling online.
Why you should consider using programmatic creative
In our digital world today, programmatic advertising is the most prominent way display advertising is served.
Thus, it is hugely unlikely that a marketer would be unwilling to buy inventory programmatically. This is why it remains the default method of publishing display advertising.
As of 2019, the total spend on programmatic advertising in the US was over $59billion of which over 84% of it consisted of display advertising.
It is predicted that by 2021 and beyond, it will account for over 88% of all US display advertising with spend reaching as high as $81billion.
Programmatic creative technologies like CMPs allow marketers to take advantage of this growth.
Thus, marketers can hugely benefit by mixing ad automation, data, and creativity to improve their display ad performance.
Why the “creative” aspect of programmatic creative is so important
Programmatic creative, when done the right way, is a highly effective method marketers can use to stand out in a hugely saturated niche.
In fact, it has become increasingly important as a lot of advertisers are leveraging programmatic display. Thus, the cost of entry is getting lower.
However, what makes the “creative” aspect of programmatic creative so important?
Firstly, understand that the “creativity” in programmatic creative doesn’t literally mean design alone.
It denotes exactly how marketers utilize programmatic buying to target (as well as retarget) customers.
Hence the popular trope the average media buyer will tell you – “you can utilize data creatively to reach the right customer at the right time, with the right message.”
Secondly, marketers need to keep in mind that behind every ad is a real consumer, not a bot.
So, to be seen and be impactful, merely “having the right message, at the right time,” will no longer be enough.
You’ll have to also reach your target audience by making use of the best “creative” combination.
That’s why GoCompare’s CMO, Zoe Harris explains it in Marketing Week – “a poor story can’t be helped in any channel, no matter the spend that’s put behind it”.
Programmatic Display Advertising Glossary
Below are some important display advertising terms you may encounter as you begin your journey through programmatic advertising:
This refers to the organization in charge of distributing digital publications. They include New York Times, Facebook, Sanoma, Schibsted, etc.
Supply-side platform (SSP)
The SSP is a platform for publishers to sell their inventory. SSPs provide access to several networks and exchanges over a single interface.
Demand-side platform (DSP):
The DSP is an interface where you can purchase advertising inventory. Typically, DSPs have access to several SSPs or ad exchanges.
Demand-side platforms leverage algorithms to analyze bid requests. Also, they reply with bids and creatives in real-time auctions.
Ad tags are used by marketers to direct the browser to a specific ad. They are also used to determine the type, size, and URL of every single ad.
In addition, ad tags also gather campaign data and verify some metrics like clicks and impressions.
The ad server is responsible for aggregating the entire campaign information covering publishers, social, search, ad networks, etc.
Furthermore, the ad server verifies and checks to see if the impressions were served sufficiently and assist with creative optimization.
Basically, the affiliate network is a program that connects affiliate marketers and advertisers. Affiliates get paid the moment an ad successfully converts a viewer or leads to sales on their website.
The ad network represents a broker between a group of publishers and advertisers. In addition, the ad network also accumulates unsold inventory from publishers and sells impressions cheaper, albeit usually at a much lower quality.
Programmatic advertising has emerged to help businesses and brands target the right audiences at the right time and over the right medium.
Through adjusting and optimizing advertising experiences based on real-time data, brands get to avoid overspending while simultaneously drawing the attention of users with the highest potential to be converted.