What Is Programmatic Advertising?
Programmatic advertising is an algorithmic process of buying and selling ad inventory in real-time across a network of media, information, and entertainment websites and apps. Rather than a direct buy, where an advertiser places an insertion order with a publisher, programmatic enables advertisers to place many buys across many sites and apps, all in real-time.
This buying style is made possible with demand-side platforms (DSPs). These platforms use complex mathematical formulas that evaluate advertising goals, inventory data, third-party consumer data, ideal ad formats, bidding preferences, and consumers’ online behavior patterns to create an efficient, cost-effective buying strategy.
January Spring invests in these platforms making this technology available for our clients and partners to reach the right audience, at the right time, with the right message.
Real-Time Bidding: What’s That?
Just like it sounds, real-time bidding automates the buying of ad space in real-time based on information gathered about the page and the user. This information is passed to an ad exchange, where ad inventory is sold to advertisers via auction.
How Real-Time Bidding Works
It’s as easy as 1, 2, 3…:
- Publishers make their ad space available to the ad exchanges.
- Advertisers decide which audiences they want to target with their ads based on audience data, existing customers, or new prospecting audiences.
- When a website user visits a web page, information about that visitor is reported back to the ad exchange.
- If the website user matches the target audience defined by the advertiser, the advertiser will then enter an auction, competing against other ads for the same audience.
- The ad with the highest bid is then shown to that website user on the site during that visit.
- Publishers get paid for the ads they show on their sites.
- The advertiser’s ad is served to the user.
This whole process occurs in milliseconds, millions of times a day all across the web, mobile and in-app.
Hyper-Targeting Powered by Data
Programmatic advertising allows advertisers to reach a relevant audience with greater precision due to automated bidding based on real-time data. This kind of data-driven targeting is not possible with traditional or linear advertising that’s bought direct, or ahead of the user’s action.
Smart marketers leverage multiple targeting tactics for each campaign in order to meet the goals of the program. Our go-to tactics include:
- Geo Fencing
- Competitive Conquesting
- Addressable Geo Fencing
- Geo Targeting
- Keyword Retargeting
- Contextual Targeting
- Site Retargeting
- Custom, Curated Audiences based on demographics, interests and buying behavior
These tactics translate into placing the right message in front of the right person:
- Target them once they visited their website
- Target them based on the keywords they searched
- Target based on articles and content they read
- Target them based on a location they visited
- Target households based on demographics, interests, and buying behavior
- Target them during and after events they attend
The more targeted and thoughtfully the campaign is built, the more engagement and better performance for the advertiser. January Spring consistently delivers performance above the industry average. Read our blog post on CTRs for more details.
The Future of Programmatic Advertising
Programmatic advertising is projected to account for 86.5% of all digital ad spend in the US in 2021 according to eMarketer. We will likely see it take over TV and radio. We anticipate sharp growth in OTT/CTV streaming ad placements this year from partners and advertisers with existing broadcast assets. According to Borrell Associates, businesses are finding new ad dollars in their budget for OTT/CTV. Local advertisers are finding $20,000+ in new spending to test this new channel. From our own cache of campaigns, we see great engagement, with users figuring out how to click or use the QR code within these broadcast/display ads to learn more about the business.
It won’t take long to see programmatic ads in the Metaverse too.
Mark Zuckerberg is crazy like a fox, with his company’s re-brand. Meta. The future of programmatic will follow consumers wherever they go online. And someday in the not too distant future, brands will find a way to reach us in another universe. Imagine playing shuffleboard with your family spread all over the country, playing via your Oculus googles. Now imagine as you laugh and shuffle, ads are imposed on your court. Or, imagine a more integrated experience could be that you are drinking the newest, hippest micro-brew super-imposed into your avatar’s hand.
When people ask us the next big thing after programmatic, we shake our heads and say, “programmatic is here to stay.” It’s the infrastructure that will open new opportunities for new advertising that we haven’t even yet considered.