Automation in digital marketing is a key tool for effective advertising. Programmatic advertising is a technology for buying and selling advertising space in real time using algorithms and artificial intelligence. Thanks to this, brands get the opportunity to accurately target audiences, and advertisers - to optimize budgets and increase ROI. One of the leading solutions in this area is SmartyAds ad tech stack, which offers comprehensive tools for automated advertising placement, ensuring maximum efficiency and transparency of purchases. If you want to learn more about how programmatic advertising works, then this article is for you.
What Is Programmatic Advertising?
Programmatic advertising is an automated approach to purchasing advertising spots (display locations) based on the required price, audience, and other metrics.
Programmatic platforms, like SmartyAds ad software, accumulate audiences, segment them by various criteria, conduct an automated instant auction between advertisers for the right to show a specific audience an advertising message, and immediately show a particular user an advertisement on the site they are currently on.
With the help of programmatic, a business can solve a range of advertising problems: from image-related (getting coverage, increasing recognition) to lead generation (traffic, conversions).
The most famous platforms with a programmatic approach include social networks, advertising networks of large search engines, and alternative programmatic platforms.
Some accumulate knowledge about the audience through social mechanics and behavior patterns that affect the habit of using social networks and search engines, while others are forced to combine information from different sites or databases.
How Does Programmatic Advertising Work?
The general principle of operation is similar to contextual advertising. You set the price per click on the ad, and the system distributes impressions in an auction format: it will be shown in the upper or lower block, or, if the price is not competitive, it will not be shown at all. The main feature of the programmatic approach is that the ad is shown only to a specific target audience.
The main concepts for understanding the principle of programmatic:
DSP (Demand-Side Platform) is a platform on which demand is generated or an auction organization system.
DMP (Data Management Platform) is a data management platform.
SSP (Supply-Side Platform) is a platform that provides placement space.
The algorithm of interaction between these platforms:
The advertising campaign is set up and launched on the DSP.
A user matching the target audience of the advertising campaign appears on the service connected to the SSP.
The DMP identifies this user, and the DSP organizes an auction between advertisers to find out whose ad to show.
The ad with the highest bid is shown to the user on the site connected to the SSP.
What Are The Methods For Buying Advertising?
The following methods for buying programmatic advertising exist:
RTB auction (Real Time Bidding) is the most popular and well-known method of purchasing. The terms RTB and Programmatic are often equated with each other, but buying advertising by algorithm is possible without an auction.
Closed auctions (private marketplace, PMP), in which participation is available only by invitation. Platforms provide advertisers with access to unreserved advertising spaces. Prices at such auctions are usually higher than at open ones. Their advantage is that the brand has the opportunity to buy places from premium sites that do not participate in the open auction.
Programmatic direct. This method does not have an auction, the CPM price is fixed. The choice and reservation of places, and the volume of placements are on the advertiser's side. The price with this model can be higher than in open auctions, where there are bids for the placement. This method also differs from classic direct placement, since programmatic will show ads only to the required target audience.
Benefits and advantages of programmatic:
automation of actions and minimization of manual work;
quick management and launch;
transparency and a single interface for displaying ads on thousands and millions of sites;
lack of direct negotiations with sites.
Disadvantages:
a number of programmatic systems are available only to agencies and their clients;
with automation, it is necessary to monitor the quality of the purchased traffic.
How to Launch Programmatic Advertising?
The process of launching programmatic advertising is not complicated, but it is necessary to take into account all the nuances:
Target audience
The first step is an in-depth study of the target audience, without which targeting will not be effective. Potential clients are divided into segments and the needs and interests of each group are studied. It is necessary to assign the goal of the advertising campaign and develop a strategy.
After compiling a portrait of the target audience, it must be transferred to the DMP. Then you need to assign content and specify the budget and additional settings. The advantage of programmatic advertising is that it will take only a few days to prepare. This time is needed to upload data, agree on terms, and check the order with a moderator.
Programmatic platform
When choosing a platform, you need to look at what sites are in its database. Their subject matter, as well as quantity and quality, are important. Special attention is paid to the settings. The following matters:
target accuracy;
principle of site selection;
cost and guarantee of impressions;
availability of detailed and transparent analytics.
Targeting settings
Targeting is configured in two ways. The first is by context, that is, in accordance with the subject of the sites and keywords. The second is by the target audience. Advertising is seen only by users who match the specified portrait. These can be:
banners;
rich media;
videos;
native ads;
interactive developments.
KPIs, such as the popular metrics CPA and ROI, will help evaluate their effectiveness. It is enough to integrate programmatic with call tracking and analytics.
End-to-end analytics
Promotion does not end with the launch of advertising. Programmatic advertising as a marketing tool creates new demand and requires constant optimization. It is necessary to track the effectiveness of advertising of all formats on each site depending on the selected segment.
Analytics are built in before the launch of ads. Content for programmatic advertising is created with the expectation that it will be tracked later. Statistics are placed in a cloud service and then transferred to a program for visualizing information.
Conclusion
Programmatic advertising opens up vast opportunities for businesses to scale and personalize their marketing campaigns. Using cutting-edge technologies like SmartyAds ad solution, advertisers can access extensive audience data, analyze user behavior, and launch highly effective campaigns in real time. If you are looking for a reliable component provider, SmartyAds is worth checking out.
