Did you know that programmatic advertising accounted for 91% of total digital display ad spend in 2023?
This is because it enables businesses to achieve precise targeting, real-time optimizations, and cost-effective ad placements, which in turn results in higher engagement and conversion rates.
However, many advertisers face challenges in executing programmatic advertising effectively.
If you also feel overwhelmed, worry not! This guide will walk you through the entire process in detail.
We’ll cover:
- Brief overview of programmatic advertising
- Its benefits and types
- Step-by-step guide on running programmatic ad campaigns
- Cost of programmatic advertising
- Real-life case studies
P.S: Struggling to implement programmatic advertising strategies that deliver results? inBeat Agency can help. We specialize in crafting tailored strategies and optimizing ad performance using data-driven insights to drive measurable success. Book a free strategy call now!
TL;DR:
Programmatic Advertising Overview: Automates ad buying using AI and machine learning, enabling precise targeting and real-time optimization.
Key Benefits:
- Cost-effective with improved ROI through real-time bidding.
- Broad and precise audience targeting across platforms.
- Increased transparency with detailed performance metrics.
- Supports cross-device campaigns for consistent user engagement.
Types of Programmatic Advertising:
- Open Marketplaces.
- Private Marketplaces.
- Preferred Deals.
- Programmatic Guaranteed Deals.
Step-by-Step Campaign Guide:
- Define objectives and KPIs.
- Identify and segment audiences using AI and first-party data.
- Choose suitable programmatic platforms (DSPs, SSPs).
- Set budgets and bidding strategies.
- Optimize creatives with A/B testing and dynamic content.
- Monitor for ad fraud with tools like ads.txt.
- Use analytics for real-time performance monitoring.
Cost: CPM for programmatic ads ranges from $1-$5, while direct ads cost $10-$20 CPM.
Real-Life Success Stories:
- Kellogg’s: Achieved a 70-80% viewability increase.
- The Economist: Gained 650,000 prospects and a 10x ROI.
- The Amanda Foundation: Used targeted ads to improve pet adoptions.
FAQs Addressed:
- Google, YouTube, and Facebook ads include programmatic elements.
- SEO and programmatic advertising are distinct strategies.
- Programmatic ads appear across websites, apps, and video platforms.
Actionable Insight: Programmatic advertising drives measurable success with real-time optimizations, audience precision, and tailored strategies. Tools like inBeat's free mockup ad generators and expertise can enhance campaign ROI.
What Is Programmatic Advertising?
Programmatic advertising is a powerful digital advertising tool that automates ad space buying and selling using advanced technologies, such as artificial intelligence and machine learning algorithms.
It enables you to precisely target audiences through real-time bidding on programmatic advertising platforms like Demand-Side Platforms (DSPs) and Supply-Side Platforms (SSPs).
This data-driven approach revolutionizes the traditional methods of manual insertion, which results in efficient budget allocation and optimal campaign performance.
Benefits of Programmatic Advertising
Programmatic advertising has emerged as a powerful tool in digital marketing by offering several advantages that drive campaign success.
These include:
- Cost-effectiveness: Programmatic ad buying allocates your budget toward relevant advertising spaces through real-time bidding. This focus on high-quality inventory maximizes return on investment (ROI) while reducing wasted spend. In fact, that higher ROI is exactly why 19% of advertisers are increasing their programmatic advertising budgets.
- Broad and precise targeting: You can reach a wider audience across websites, mobile apps, and digital platforms through programmatic advertising. Also, the ability to incorporate first-party data allows precise targeting, which is useful in creating personalized content that resonates closely with potential customers.
- Increased transparency: When using programmatic advertising, you can benefit from full transparency in campaign performance. Programmatic platforms offer insight into metrics like ad placement, engagement rates, and costs to enable measurable outcomes and efficient budget management.
- Real-time optimization of data: Platforms for programmatic advertising use machine learning to analyze campaign performance and user behavior in real-time. This allows for instant optimization of bidding strategies, audience targeting, and creative elements to keep campaigns relevant and effective.
- Supports cross-device campaigns: Programmatic advertising allows campaigns to adapt dynamically to user interactions across digital touchpoints. It simply means that the campaign will always stay aligned with their interests whether users engage through websites or mobile apps.
“Some people go for ‘good enough’ marketing – delivering mass instead of class – but good marketing is about providing quality content for your audience.” – Rolf Hammerstein, marketing manager for EMEA and APAC
Types of Programmatic Advertising
Programmatic advertising encompasses the following methods:
1. Open Marketplaces
Open marketplaces, also known as open exchanges, are platforms where digital ad inventory is available to all advertisers through real-time bidding.
In this environment, you have to bid for ad placements in real-time, and the highest bid wins the impression.
This method offers a broad reach, which allows you to access a wide array of websites and digital platforms.
However, it may present challenges related to brand safety and ad placement transparency.
2. Private Marketplaces (PMP)
Private marketplaces are invitation-only platforms where premium publishers offer their ad inventory to a selected group of advertisers.
Such marketplaces provide more control over ad placements and ensure higher-quality inventory.
In addition, you can benefit from enhanced brand safety and the opportunity to target specific audience segments.
While PMPs offer a more controlled environment, they may come with higher costs and limited reach compared to open marketplaces.
3. Preferred Deals
Preferred deals involve direct agreements between publishers and advertisers, which allows you to access specific inventory at a fixed price before it becomes available in the open marketplace.
This arrangement provides first-look opportunities and the ability to secure premium placements without competing in an auction.
The major benefit of preferred deals is predictability in pricing and inventory access, but to leverage this, you must have a strong relationship with publishers.
4. Programmatic Guaranteed
Programmatic guaranteed deals, also known as programmatic direct, are agreements where specific inventory is reserved for an advertiser at a fixed price.
This method combines the efficiency of programmatic buying with the certainty of direct sales to ensure secure desired placements and impressions.
Guaranteed deals offer predictability and control but may lack the flexibility of real-time bidding environments.
Programmatic Advertising vs. Traditional Display Ads
You must understand the key differences between programmatic advertising and traditional display ads to choose the most effective method for achieving your marketing goals:
Step-By-Step Plan to Run Programmatic Ads in Digital Campaigns
Now, let’s learn how to set up, optimize, and measure programmatic advertising campaigns effectively.
Our experts at inBeat have crafted a detailed guide that will help you execute your programmatic ad campaigns like a pro:
1. Define Campaign Objectives and KPIs
Before launching a programmatic advertising campaign, a clear roadmap is crucial to define your goals and key performance indicators (KPIs).
Let’s see how to set a strong foundation:
- Clarify campaign goals: Identify what you aim to achieve through your programmatic advertising efforts. Align these goals with your overall marketing efforts to ensure consistency and optimized results. Common goals include:
- Increasing click-through rates
- Improving engagement rates
- Driving conversions
- Enhancing brand visibility.
“Take the time to really understand your growth levels to date. If you run a popular blog and traffic has increased by 8-10% for the last four months, you know that a 12-15% month-over-month increase in blog traffic is a challenging yet attainable goal. Don’t be the startup that shoots for 20% or the startup that considers anything above 8% a win.” (Shanelle Mullin, Customer Acquisition Program Manager at Shopify)
- Choose relevant KPIs: Select KPIs that correspond to your goals. For example, focus on conversion rate and cost per acquisition if your goal is lead generation, or prioritize click-through rates (CTR) and engagement rates for awareness campaigns. These metrics will help track campaign performance and allow for immediate adjustments.
- Define benchmarks for success: Use historical campaign data or industry standards to set realistic benchmarks for primary KPIs like CTR, engagement rates, and return on ad spend (ROAS). Having clear standards allows you to measure progress and identify areas for improvement easily.
Pro Tip: Experts at inBeat keep campaign objectives and KPIs scalable. If a pilot campaign boosts conversion rates by 10%, they evaluate how the same strategies can be applied to new audience segments or regions to maximize campaign success.
2. Identify Target Audience Segments
The second step in a programmatic campaign is to identify and segment your target customers.
Know-how of your intended audience allows for precise targeting, which directly improves engagement and conversion rates.
For this, you should follow the below strategies for this step:
- Leverage the latest technology: Technologies such as AI and machine learning allow programmatic platforms to analyze user behavior and content preferences effectively. For example, Google Display & Video 360 use natural language processing (NLP) to categorize users based on their interests, which ensures ads are only delivered to interested audiences.
- Use first-party data: Existing customer data provides valuable insights for creating custom audiences. This data-driven strategy identifies user behavior patterns to target potential customers more effectively.
- For example, an e-commerce brand can use purchase history to build audience segments that align with campaign goals like improved sales.
- Identify psychographic trends: Go beyond basic demographic data and incorporate psychographic insights, such as values, interests, and lifestyles. This approach provides a deeper understanding of your audience and helps you design Display ads that resonate emotionally, which increases the likelihood of conversions. Here are 5 awesome research tools for psychographic insights.
Pro Tip: Use cross-device tracking to gain a comprehensive view of user behavior across platforms like desktops, mobile apps, and tablets. This allows for dynamic audience segmentation, which ensures your ads adapt to the evolving preferences and habits of your potential customers.
3. Choose the Right Programmatic Platform
You must also select the right programmatic platform.
Basically, it decides the quality of your ad placements, your ability to manage the ad-buying process, and, ultimately, the campaign’s effectiveness in achieving its goals.
To choose the right platform, follow these tips:
- Demand-Side Platforms (DSPs): DSPs are automated systems that allow you to purchase digital ad inventory through real-time bidding, which allows precise audience targeting. To use DSPs effectively, you should leverage their advanced features, like audience segmentation and predictive analytics, to refine targeting strategies.
- Supply-Side Platforms (SSPs): SSPs are tools publishers use to manage, sell, and optimize their advertising space to achieve maximum revenue and visibility to advertisers. To attract quality buyers, you should prioritize integrating it with premium DSPs.
- Multi-channel support platforms: Opt for platforms that provide multi-channel support so you can manage Display ads, Mobile advertising, and video campaigns in one place. Google Display & Video 360 can simplify managing multiple campaign types and ensure consistent messaging to maximize user engagement across different digital spaces.
Pro Tip: At inBeat, we use programmatic platforms that allow for integration with third-party analytics tools.
This enables deeper insights into campaign performance, such as audience engagement patterns and conversion pathways for data-driven optimizations.
4. Set Your Budget and Bid Strategy
A clear, well-thought-out budget and bidding plan is necessary for efficient use of resources while maximizing programmatic campaign performance and ROI.
Some expert tips to achieve this goal are:
- Select a bidding strategy: Choose the appropriate bidding model depending on your campaign’s KPIs. For example, use:
- Cost-per-click (CPC) for campaigns that prioritize engagement
- Cost-per-impression (CPM) for brand visibility
- Cost-per-acquisition (CPA) to maximize conversion rates
- Monitor bidding in real-time: Advanced programmatic platforms integrate machine learning algorithms that enable real-time optimizations. They analyze data from live campaigns to adjust bidding strategies automatically, which ensures competitiveness in real-time auctions without exceeding budget limits.
- Define your advertising budget: Set a realistic budget based on your campaign objectives to focus spending on high-quality inventory. Platforms like The Trade Desk and MediaMath help allocate resources effectively to minimize waste and target placements that align with your ideal audience.
Pro Tip: Implement a tiered bidding strategy by prioritizing audience segments based on their likelihood to convert. Allocate higher bids to high-intent users, such as those who have abandoned carts or spent significant time on product pages, while using lower bids for broader awareness campaigns.
5. Create and Optimize Ad Creatives
Ad creatives are the foundation of user engagement in programmatic advertising.
A well-optimized creative has a huge role in capturing attention and driving relevant audiences to take desired actions.
You can follow the below tips for creating optimized ad creatives:
- Tailor ads to the platform: Ensure your display, mobile, and video ads are designed to match the specifications of the programmatic platform and the user’s device.
The below table can help you with it:
- Incorporate dynamic content: Use predictive analytics to deliver personalized ads tailored to individual user behavior. Dynamic creative optimization (DCO) can help you with it by enabling the automatic adjustment of ad elements based on audience segments and contextual targeting, such as:
- Text
- Images
- Call-to-actions
This can dramatically increase your campaign's CTR and conversion rates.
Pro tip: Run A/B testing on various ad formats, color schemes, and messaging styles to identify which combinations resonate most with your audience. For programmatic ads on social media, you can leverage mockup ad generators.
For example, inBeat Agency provides free mockup ad generators to help you create and test engaging programmatic ad designs with ease.
6. Stay Vigilant Against Programmatic Ad Fraud
Ad fraud, such as domain spoofing, bot traffic, click fraud, etc., poses a significant challenge in programmatic advertising that can threaten your campaign performance and waste valuable resources.
Therefore, it’s crucial to stay vigilant of such issues.
Let’s see how:
- Work with verified platforms: Choose reputable programmatic platforms that integrate advanced fraud detection and brand safety measures. It’s better to opt for private marketplaces to access high-quality inventory with reduced risks associated with fraudulent ad space.
- Monitor suspicious activity: Use real-time data analytics and machine learning algorithms to detect anomalies in metrics such as impressions, clicks, or conversion rates. Abnormal spikes or patterns can indicate potential ad fraud, which you must address immediately to protect your programmatic campaign's integrity.
Pro tip: inBeat experts advise you to use industry-standard solutions like ads.txt to ensure the ads are purchased from authorized sellers. Moreover, anti-fraud tools integrated into programmatic advertising platforms, such as DoubleVerify, also help us block invalid traffic and improve campaign performance.
7. Monitor Performance with Analytics
Programmatic platforms offer real-time data and actionable insights, which help you refine your strategies and optimize campaign success.
To monitor the campaign performance effectively, make sure to follow these strategies:
- Generate detailed reports: Obtain comprehensive reports from programmatic platforms to assess performance across audience segments, digital spaces, and creative variations. Use these insights to refine your digital marketing strategies and improve the efficiency of future programmatic advertising campaigns.
- Track KPIs consistently: Regularly evaluate metrics such as CTR, engagement rates, and CPA using specialized tools. For instance, you can use platforms like Google Analytics, Adobe Analytics, and Tableau to leverage their comprehensive tracking and reporting capabilities.
- Set custom alerts: Use analytics tools like Google Analytics or your programmatic platform’s dashboard to set custom alerts for significant changes in key performance indicators (KPIs). This helps you quickly identify issues like sudden drops in engagement rates or increases in cost per acquisition and take corrective action promptly.
Pro tip: We experiment with different attribution models, such as last-click or data-driven attribution through tools like Google Analytics, for your campaigns. This assists us in determining which interactions along the customer journey contribute most to conversions to help in smarter budget allocation.
Cost of Programmatic Advertising
Programmatic advertising costs are typically measured using the CPM model, which represents the cost per thousand ad impressions.
On average, programmatic ads have CPMs ranging from $1 to $5.
In contrast, direct ads, which involve direct agreements between advertisers and publishers, usually command higher CPMs, i.e., between $10 and $20.
Real-life Examples of Programmatic Advertising
The following brands have successfully leveraged programmatic advertising to expand their reach and achieve better ROI:
1. Kellogg’s
In 2014, Kellogg’s adopted programmatic advertising to address the challenge of linking online ads with offline sales.
They launched a hyper-targeted campaign by focusing on KPIs like viewability (measuring if users see an ad) and frequency (tracking how often users see an ad).
As a result, they were able to achieve the following milestones:
- 70-80% increase in viewability rates
- 2X to 3X improvement in audience targeting
2. The Economist
The Economist used programmatic advertising to analyze subscriber data, such as cookie and content insights, to identify distinct audience preferences. They then segmented audiences based on topics like finance, politics, and careers and tailored campaigns to resonate with these interests.
Consequently, they enjoyed the following benefits:
- 65% better brand awareness
- Generated 650,000 new prospects
- Achieved a tenfold return on investment
- Increased engagement and subscriptions
3. The Amanda Foundation
The Amanda Foundation, a non-profit organization supporting animal adoption, successfully leveraged programmatic advertising to match pets with potential adopters.
They created highly targeted ads that helped individuals identify the ideal pet based on their preferences by analyzing audience browsing history and lifestyle data.
Connect with inBeat Agency to Optimize Programmatic Advertising Performance
Programmatic advertising is a powerful tool for modern digital marketing that offers precision targeting, real-time optimizations, and data-driven insights.
It uses advanced technologies and platforms to streamline the ad-buying process, which results in enhanced audience engagement and efficient campaign goal achievement.
Key Takeaways:
- Programmatic advertising automates ad-buying while ensuring precise targeting and efficient budget allocation.
- Real-time bidding optimizes ad placements across DSPs and SSPs for better campaign performance.
- Types of programmatic ads include open and private marketplaces, preferred deals, and guaranteed ads.
- Define objectives and KPIs to set a clear foundation for programmatic campaign success.
- Audience segmentation using AI and first-party data improves relevance and conversion rates.
- Optimize ad creatives with tailored content, dynamic optimization, and A/B testing tools like inBeat.co.
If you are still wondering how to run a successful programmatic ad campaign, inBeat Agency can assist.
With years of expertise in paid media, we offer end-to-end solutions tailored to amplify your ROI. From seamless campaign setup and ad account integration to producing high-impact creatives, we handle every step with precision.
Book a strategy call with us now!
Frequently Asked Questions (FAQ’s)
Why is it called programmatic advertising?
It is called programmatic advertising because it uses automated technology, algorithms, and real-time bidding to buy and place digital ads. This process eliminates manual negotiations and streamlines ad transactions, making it more efficient and data-driven.
What is the difference between digital advertising and programmatic advertising?
Digital advertising encompasses all online advertising efforts, including display ads, social media promotions, and email marketing. Programmatic advertising is a subset of digital advertising that automates the buying and selling of ad space using algorithms and real-time bidding, enhancing targeting precision and efficiency.
Is Google Ads programmatic?
Yes, Google Ads offers programmatic advertising through its Display Network, allowing advertisers to use automated systems for ad placements across various websites and apps.
Is Facebook Ads programmatic?
Facebook Ads operates its own advertising platform, which includes programmatic elements like automated ad placements and targeting. However, it functions within Facebook's ecosystem rather than through open programmatic exchanges.
Is SEO programmatic advertising?
No, Search Engine Optimization (SEO) is not a form of programmatic advertising. SEO focuses on optimizing website content to improve organic search rankings, whereas programmatic advertising involves automated purchasing of ad space.
Is YouTube considered programmatic?
Yes, YouTube offers programmatic advertising options through platforms like Google Ads, enabling automated ad placements within videos and across the platform.
Is programmatic advertising cheap?
Programmatic advertising can be cost-effective due to its efficient targeting and real-time bidding processes. However, costs vary based on factors like audience targeting, ad formats, and competition.
Where do programmatic ads show?
Programmatic ads can appear across various digital channels, including websites, mobile apps, video platforms, and social media, depending on the targeting and platforms used.
