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2 minute read

What is Programmatic Advertising?

Have you heard of programmatic advertising? While this type of advertising may seem difficult and "tech trekkie." Not to worry! We are here to help you understand this advertising strategy and how it can be beneficial for you. In layman's terms, instead of buying directly from providers, programmatic advertising enables you to purchase and improve digital campaigns programmatically.

Programmatic advertising is a sophisticated way to place advertising as it relies on traffic data and online display targeting. This practice has been proven to have great results for big and small brands.  Traditionally, when a business wanted to list an advertisement, you were tasked with setting up and reporting on any advertisement. This process is streamlined through programmatic advertising, making it more effective and efficient. 

Who uses programmatic advertising?

Programmatic advertising is one way for businesses to advertise on digital screens. With this technology, businesses are able to reach more of an audience, optimize their advertisement, and improve based on campaign success. 

Why should you use programmatic advertising?

It is expected to continue to grow over the years in 2021, it was projected to account for 86.5% of all digital display advertising spending. It provides a faster and smarter alternative way to digital advertising.  With this advertising style, you can rely on an algorithm to tell you where your ad money is best spent.

How much does programmatic advertising cost?

Simply put, this sort of advertising can cost as little or as much as your budget allows. Programmatic ads are typically bought on a cost-per-thousand-impressions (CPM) basis. This can cost from $0.50 to $2.00, however, can be higher based on a few different factors. Such as, which demand-side platforms you choose, your target audience, and the level of competitiveness for a certain market. A rule of thumb would be the nicher your audience is, the higher you will pay in CPM. 

What are the types of programmatic advertising platforms?

There are many types of programmatic platforms, however, the three main types of these platforms are 

Sell-side platforms: We have also heard this coined as a supply-side platform, this platform allows publishers to sell their ad impressions to advertisers in real-time. It acts as a publisher’s inventory. This option consists of both DSPs (demand-side platform) and ad exchanges. An SSP allows publishers to filter ads by the advertiser and other criteria. 

Demand-side platform: This platform allows advertisers to purchase ad inventory across multiple platforms at once. Advertisers make their bids to a DSP and the platform makes the decision for them. It stores user profiles and third-party data and combines information with bids from advertisers. 

Ad-exchangers: This is how sell-side platforms flow their ad inventory to demand-side platforms. DSPs connect to an ad-exchanger where ad prices fluctuate based on the competitiveness of that inventory.

What are the benefits of this type of advertising?

There are many types of benefits when incorporating programmatic advertising into a marketing strategy. Some of these are:

  • Large-scale audience reach - We see this as the biggest benefit of programmatic advertising. It is the best way to buy an ad inventory to reach a large group of people.
  • Efficient and low-cost awareness - With the current CPM rate, even with a small budget, your marketing dollars can go far.
  • Real-time data and analysis - This data allows you to make faster decisions and pivot as needed. It puts you in a proactive role.
  • Ability to utilize first and third-party data - This allows for a business to open the door and find new customers similar to current ones
  • Opportunity for cross-device campaign strategies - Allows you to capture initial awareness to uses through the advertisement and revisit them down the line to make a purchase.

All in all, programmatic advertising is intended to replace traditional methods and provides a new outlook on digital advertising. It is an effective way to increase revenue while staying on top of a growing trend. 

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