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What is Programmatic Advertising? – A Beginner’s Guide to Programmatic Advertising.

by | Updated on: Aug 22, 2023 | Digital Marketing Guides, Digital Marketing 101 | 0 comments

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Definitive Guide to Programmatic & Marketing & Programmatic Advertising – Technology is transforming the entire marketing industry. Programmatic advertising has changed the entire online advertising landscape. As per reliable available data, it’s rising about an additional 10 billion dollars every year in the USA alone. 

Programmatic advertising has been launched around 2009 and revolutionized the digital paid marketing industry since its inception. 

In this article, you’ll get a complete beginner’s guide to programmatic advertising – what programmatic advertising really is, types of programmatic advertising, why it’s important, and many more. 

Before we get started discussing everything about programmatic advertising in detail, it’s important you clearly understand that programmatic advertising is a paid online marketing process. If you’re looking for only free marketing methods, perhaps it won’t fit your needs. You can check out SEO marketing strategies that don’t require any ad investment. 

So let’s get started. 

What is Programmatic Advertising? 

Programmatic advertising is an ad space buying process that works automatically with the help of a software tool and its collected data. Due to its data-driven functionality, programmatic advertising is much more targeted, efficient, time-saving, and result-oriented. 

In programmatic advertising, you don’t need any human activities like price negotiations, order insertions, etc. The process of programmatic advertising is automated, therefore, faster than other traditional advertising systems. It’s a form of paid online advertising and works well in different ad exchanges. 

However programmatic advertising is a generic term for buying online media through several ways using digital tools and data. 

Why Programmatic Advertising is Important 

There are several reasons programmatic ads are popular in the internet marketing industry. Here’re a few important reasons it’s rising day by day – 

  • Targeting options – you can laser target your prospective customers depending on available data. 
  • Reporting and insights – you can track analytics of your campaigns to make data-driven and proven strategies to reach your marketing expectations faster.
  • Performance and ROI – you can engage with your audience personally by an automated dynamic ads process according to their interest, education, job profile, and more. Dynamic and automated ads perform better and the return of investment (ROI) is also obviously higher. 
  • Inventory quality – in programmatic ads, inventory quality is much better. In programmatic direct, the quality of inventory matters a lot.    
  • Pricing – programmatic ads cost less than traditional ads and at the same time perform far better. Machines eliminated the human-driven pricing hassles and made it more transparent. 

Types of Programmatic Advertising

Mainly 3 types of programmatic advertising are available on the internet market – Open marketplace Real-time bidding (RTB), private marketplace (PMP), and programmatic direct. 

Let’s dive deep to know more about these types. 

Open Marketplace Real-Time Bidding (RTB) 

Open marketplace Real-Time Bidding (RTB) is an automated auction-based programmatic ad buying and selling process. Auctions of online ad impressions happen automatically and instantly through ad exchanges. 

In an open marketplace, these RTB impressions are open for all similar advertisers or bidders. The highest bid wins the advertising space and its ad is displayed on the website. 

Programmatic advertising
Programmatic advertising

Private Marketplace (PMP) 

Private marketplaces are customized for selected advertisers or groups of advertisers. This is fundamentally an RTB auction, but not open for all, a selected number of bidders can take part in this bidding process only by invitation. 

Private marketplaces eliminate mediums like ad exchanges, and supply-side platforms (SSPs). PMP ads cost a little bit higher as big publications offer this type of private bidding in the premium range of price.  

Programmatic Direct Ads

Programmatic direct is the most expensive type. Premium ad placements with fixed CPMs (cost per thousand impressions) are sold manually. Negotiations may take place for finalizing the deals. Once space is sold, then the rest part of the advertising process happens automatically. 

Programmatic direct helps you choose your preferred ad placements with an ensured number of impressions. Therefore, you’ll need a certain ad budget to avail of this premium service.  

How to Create a Programmatic Ad Campaign 

Like every online marketing campaign, you need to have an in-detail plan with a clear concept of the purposes of your campaign and how programmatic ads may help you fulfill your purposes. You have to clearly understand how you can fit your programmatic advertising into your marketing funnel. 

From the top of your marketing funnel to the bottom, your programmatic ads may fit in several steps like lead capture, lead nurture, or sales. Having an in-detail plan will help you understand where your programmatic ad fits your funnel best. 

You can create your programmatic ad campaign by simply following these steps – 

Establish expectations 

With a programmatic advertising campaign you’ll need to measure the performance and it’s crucial to know what the ultimate expectations are. You might want to attract more traffic to your website, or you want to increase your sales.

You should clearly figure out your expectations of what you’re trying to do by your programmatic ad campaign. 

Define your target audience 

You can’t create impactful and appealing content for your ad campaign unless or until you define your target audience. You need to define clearly whom you’re trying to connect with, what are their interests and activities on the internet, how do they engage with your content, and many more. 

Creating a buyer persona will help you define your target audience more efficiently. Once you define your target audience, it’ll be easy to create relevant content that will engage your audience effectively

Set your budget 

As programmatic ads are paid marketing, it’s fair to determine your budget from its inception so that you can make your overall strategy accordingly. 

Some factors may influence your programmatic ad campaign budget, such as – 

  • How many channels you want to cover 
  • How fast you want to get the results 
  • Resources and tools required in your campaign

Decide tactics and channels 

Which channel or platform do you want to use for your programmatic ads? In programmatic ad campaigns, digital technology combines the data and decision making into one place, but tactics may vary depending on channels while your audience may use different channels as per their individual preferences. 

Find your KPIs (key performance indicators)

It’s very important to identify Key Performance Indicators (KPIs) that could matter your programmatic ad campaign. 

Some KPIs you may consider – 

  • New leads 
  • Total sales 
  • Response rates 

Build your landing pages 

New visitors first come to your landing page. Landing pages encourage your visitors to take specific actions and gradually convert them into loyal customers. 

Your landing pages should be – 

  • Visually appealing 
  • Fully mobile responsive 
  • With clear CTAs (call to actions)
  • Relevant with your business 

Response as soon as possible 

No matter which contact procedure you’re using for your campaign, it should be immediately responsive. When someone is trying to connect you, make sure your business is always ready to respond quickly. The quicker you respond, the better. 

Track analytics of your campaign

Though programmatic reduced a lot of manual tasks, you still need to monitor your KPIs to improve your campaign over time. You may face some hard situations, don’t be afraid of experimenting new things. Always try to optimize your campaign and be patient, you’ll definitely win the game.  

Learn from other advertisers

If you want to leverage programmatic ads seamlessly, you’ll have to learn from other programmatic winners as well as losers. You have to learn from practical experiences of other programmatic advertisers. 

Thousands of case studies are available on the internet nowadays. If you can learn by looking at others, you can avoid a lot of pitfalls in this industry. 

How Much Do Programmatic Ad Campaigns Cost? 

Typically, programmatic costs are calculated based on CPM (Cost per mile) or cost per thousand impressions. Costs may widely vary depending on many cost influencing factors such as platforms, devices, ad placements, etc. 

In general, programmatic costs range from $ 0.50 to $ 2 per CPM. You should also consider some additional costs like writing ad copy, designing, tracking analytics, among others. 

Final words 

Programmatic advertising is an interface of advertising and artificial intelligence. It’s the future of ad buying processes. Embracing it right way could help you dominate the online ad buying spaces in the coming future.  

Programmatic advertising is an important facet of digital marketing strategies in the section of paid ads and PPC. For more details you can connect us.

Author:- Debajyoti Banerjee is the Founder, Director & CEO of Seven Boats - A leading digital marketing agency & digital marketing training institute in India since 2011. He is a TEDx Speaker, Google & LinkedIn Certified Digital Marketer & Trainer, Brand Strategist, Consultant & Entrepreneur. B. Tech in computer engineering & post graduate diploma in Marketing, Debajyoti has 18+ years of domain experience and successful track records in digital marketing services & digital marketing training with 500+ clients & 100K+ students in 165+ countries. He has been invited & felicitated by 25+ Top B Schools & universities including London Business School, AICTE ATAL FDP, UGC-HRDC, IIM Shillong, IIM ROHTAK, IIT KGP, IIT Guwahati, Calcutta University, Ranchi University, St. Xavier’s, Brainware, Techno India, JIS Group, Jaypee Group, Shikshayatan Foundation, IIEST Shibpur, Bhavan’s, ICFAI Business School, GITAM Deemed University, Swami Vivekananda Group of Institutions & many more. He has been awarded with more than 20 national awards and he has received notable media coverage. Learn more



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