Digital advertising is one of the most dynamic fields to follow. A steady stream of new technological developments is constantly transforming the way companies create and deploy online ads, offering cutting-edge ways to ensure your advertising reaches your audience. One such tool is programmatic advertising: a method that automates and optimizes the purchase of ad space, using machine learning to deliver the most effective ads to potential customers.

In the past, marketers had to juggle proposal requests, quotes and tenders by negotiating with multiple people along the line. The term “programmatic” refers to workflow automation made possible by technology that employs algorithmic artificial intelligence technology to optimize the delivery of ads based on a visitor’s behavior. Brands and agencies use a demand-side platform (DSP) to determine which impressions to buy and at what price, and publishers use a supply-side platform (SSP) to sell their ad space to brands. With this form of marketing, advertisers stop wasting money on delivering ads to poor quality leads

Programmatic advertising takes place in the blink of an eye, in the time it takes for a web page to load, making it one of the least understood forms of marketing. We’ll cover everything you need to know, including the benefits of programmatic advertising, the options available and how it works.

What Ad Formats Are Possible with Programmatic Advertising?

Programmatic covers the full range of possible advertising formats. If an ad can be placed on a web page, it can be done with a programmatic approach. The bulk of programmatic advertising is targeted to the following formats.

  • Display: The majority of programmatic ads are in the good old-fashioned display style. These banner ads come in standard sizes and are often static, but HTML5 has allowed display ads to incorporate animation and other eye-catching features to improve click-through rates (CTR).
  • Mobile: There’s no escaping the popularity of mobile. Mobile traffic increased by 222% between 2013 and 2018, making mobile advertising a key area for programmatic ad placement. These are the ads that appear while you’re scrolling mobile-formatted sites, and even on a number of free apps.
  • Native: Native ads rely on relevancy and audience targeting to blend in with a site’s normal content and structure. Programmatic buying helps advertisers maximize relevancy through analytics and AI. With this technology, advertisers get better performance by presenting the content to the right lead at the right time.
  • Video: In-stream video ads play before you start the video you clicked on, out-stream video ads play in the middle of online articles, and in-display video ads are those that top the “up next” column on your YouTube feed. Programmatic buying helps advertisers better capture elusive attention spans with segmentation and targeting.
  • OTT: Over the top (OTT) content is streamed through the internet directly to a smartphone, laptop, connected TV (CTV) or another device. It is similar to traditional TV advertising, but marketers have a greater ability to target audiences with programmatic OTT ads.
  • Interactive: An up-and-coming form of ad is interactive. These typically appear in apps and contain an element in which a user is invited to perform actions on the ad like clicking and/or dragging. It shows how an app or game may work, and programmatic buying helps make it more likely that the ad is served up to someone who will actually interact with it.

What is RTB?

While programmatic advertising is a term that encompasses all automation of buying and selling ads, most people use it to refer specifically to real-time bidding (RTB). RTB is the auction model through which advertisers buy ad space on an impression-by-impression basis. The typical steps that occur when someone clicks on a web page are:

1. The page’s publisher puts the ad impression up for bidding.
2. The ad marketplace conducts an almost instantaneous auction wherein multiple advertisers compete to win the impression.
3. The advertiser that bids the highest wins the right to display their ad in the available impression space.
4. The ad is retrieved and served to the website user.
5. The prospective customer clicks on the ad and the advertiser converts them into a sale.

Programmatic ads are significantly more cost-effective than direct buying. Programmatic ads typically cost about one-fifth of the cost of direct buying. You can choose from three models:

  • Cost per thousand impressions (CPM)
  • Cost per click (CPC)
  • Click through conversions (CTC)

The most popular choice is CPM. The price of a CPM depends on how intensely you’re targeting as well as the industry, ad format, placement on the page and the device. Programmatic ads are more cost-effective for small-to-medium sized businesses because direct buying with a DSP requires an upfront monthly budget in the tens of thousands. With programmatic advertising, marketers can also adjust CPM parameters on the fly based on how valuable impressions are from moment to moment, increasing ROI.

What is a Trading Desk?

Trading desks are a relatively new concept within the world of programmatic advertising. A trading desk can be defined as the technology that facilitates real-time bidding, or as the managed service layer on top of a DSP. A trading desk is also the team that offers the managed service and facilitates the buying model for the agency’s clients.

The greatest benefit of trading desks is access to multiple DSPs. All DSPs have their own advantages and disadvantages, but most of them require very large monthly minimums that prevent smaller companies from utilizing their services. A trading desk like AUDIENCEX offers you access to multiple DSPs, allowing you to get the best out of each one without the budget drain of monthly minimums. These are the terms to know when it comes to trading desks:

  • Demand-Side Platform (DSP): Demand-side platforms automate the purchase of ad impressions. AUDIENCEX gives you access to more than 18 DSPs.
  • Supply-Side Platform (SSP): A supply-side platform automates the sale of a publisher’s inventory, removing the need for a large sales team.
  • Data Management Platform (DMP): A data management platform collects data, allowing for audience segmentation and effective targeting of specific users in your ad campaign.
  • Ad Exchange: Ad exchanges are platforms that work directly with publishers by purchasing their impressions and then selling them through real-time bidding by connecting to DSPs and SSPs.
  • Ad Server: An ad server enables the cycle of deciding what ads to place on a website and then serving that ad to the user. Ad servers are sometimes called “campaign management platforms.”

Programmatic advertising with a trading desk has several benefits for marketers. Here are five of the reasons to upgrade to a trading desk:

  • Enhanced control: You can see exactly where your ads are being placed and the type of customer looking at every ad. It’s easy to make quick, effective changes when you can see each piece in the bigger picture.
  • Real-time reporting: There’s no more waiting for a campaign to be over before you can gain valuable insights. You can see what’s working and what’s not immediately.
  • Efficiency: The optimization offered by trading desks cuts out waste by targeting customers with pinpoint accuracy.
  • Targeting: You can choose from multiple segmentation criteria, like geo-location or contextual keywords. You can also recapture customer attention with retargeting via cookies.
  • More conversions:

Data-based optimization means that programmatic advertising delivers more relevant ads to users, increasing the likelihood of them turning into conversions.

Put simply, programmatic advertising is perhaps the most efficient way to cut down on the labor involved in advertising while maximizing the effect of your ad content.

 

Concerns About Programmatic Advertising

What keeps so many marketers from diving into programmatic advertising? Here are a few of the concerns that can make marketers hesitate.

1. Viewability

When you’re putting your content on the web, you want to know where it’s going. Programmatic advertising lets you set parameters based on whether the ad inventory is above-the-fold (ATF) or below-the-fold (BTF). If your current campaign is centered around branding, you could save money by bidding on BTF ads. If you’re looking to maximize leads and conversions, investing in ATF ads can maximize your content’s visibility.

2. Ad Fraud

It’s important to remember that not all internet activity comes from legitimate human sources. In fact, more than a third of all internet traffic is fraudulent. Fraudulent web traffic is created by viruses that program computers to visit websites. For marketers, fraud is a huge problem as it means a significant portion of the ads they’ve paid to display are being served to users who aren’t actually users at all.

Programmatic advertising platforms leverage their extensive analytic capabilities to evaluate the quality of leads by monitoring user behavior. The tech can keep learning what activity marks illegitimate traffic, continually refining lead quality and steadily improving ROI over time.

3. Brand Safety

Brand safety is paramount for any company, and some marketers get nervous that programmatic advertising will lead to their ads being placed next to inappropriate content. Responsible programmatic advertising providers like AUDIENCEX partner with third parties to measure and verify brand safety with the use of AI. One effective method involves the use of cognitive computing to codify keywords into brand sentiment signals, allowing for the identification of brand safety risks.

4. Lack of Education

If the number of acronyms involved in programmatic advertising has been making your head spin, you’re not alone. Programmatic ad buying is a complex and nuanced technology that does come with a steep learning curve if you’re trying to pick it up by yourself. AUDIENCEX takes the hassle out of learning programmatic advertising by presenting an easy-to-use interface that’s intuitive and simple to learn. We do the hard work for you, and you simply see results.

5. Budget Concerns

For the first few years after its invention, programmatic advertising was only a viable option for very large businesses. Working directly with a single DSP costs tens of thousands of dollars monthly, which was beyond the budgets of most small-to-medium-sized businesses. With an independent trading desk, you’re one of multiple customers accessing the DSPs, so you share the cost without having to reach a monthly minimum. AUDIENCEX is an affordable option that allows smaller businesses to receive the same quality of service and technology as their larger counterparts. Another benefit of programmatic advertising through a trading desk is scalability: Your marketing campaigns will easily grow with your business.

What Industries Can Use Programmatic Advertising?

Programmatic advertising provides a powerful set of tools for marketers in any industry. A few factors can boost the impact programmatic has on certain industries. Retail companies, for example, benefit from the ability to push specific products through cookies and retargeting. Travel companies can harness the power of geolocation to target customers within a set distance of the place they’re advertising for. The pharmaceutical industry can use programmatic ads to segment and target healthcare professionals. The possibilities are endless. Five success stories demonstrate how AUDIENCEX has transformed the way market companies.

1. Travel/Tourism

LivItaly, a travel company, had gotten as far as it could go with Facebook ads, even though it wanted to attract new customers. To make this happen, we used a combination of display ads, retargeting, third-party data and lookalike prospecting to draw in potential customers.

In the end, LivItaly achieved a 12:1 return on advertising spending (ROAS), which far exceeded the initial goal of a 2:1 ratio.

2. Car Dealerships

Southern California Ford wanted to attract Spanish-speaking consumers to California dealership sites. To achieve this goal, AUDIENCEX targeted 30-second ads to in-market Spanish speakers on desktop, mobile devices and tablets. The campaign resulted in triple the site activity on each website and boosted the visibility of weekend sales events.

3. Retail

American Apparel, a well-known retail company was looking to increase the exposure of its brand relaunch as well as drive an increase in online sales. For this campaign, we focused on custom creatives that were served to individual customers through dynamic creative optimization (DCO) ads for promotions and online sales. The campaign generated $1.25 million in revenue with an average order value of $75.50. The ROAS was a significant 20:1.

4. Technology

To help ASUS promote a new laptop, AUDIENCEX created a full-funnel omnichannel campaign to target the right consumers. We identified early adopters and tech enthusiasts whose behaviors showed they were in-market for laptops or tablets, and engaged them with a robust campaign.

Our approach resulted in 32 million impressions served, 70,000 clicks and an 81% reduction in CPC.

5. Floral Retailer

1-800 Flowers wanted to draw in Generation-Y consumers who have historically been uninterested in flower delivery services. We created a data-driven social strategy that integrated the hashtag #justbecause into organic social conversations, bringing the content to Generation-Y.

Our approach garnered a 78% increase in unique site visitors and introduced a whole new demographic to the company’s products.

Programmatic Advertising with AUDIENCEX

With programmatic advertising, your business can streamline the buying process and generate unprecedented ROAS. AUDIENCEX is here to help. Our independent programmatic trading desk offers you access to more than 18 enterprise-level platforms to increase your audience reach and improve marketing performance. Our strategic guidance will help you make the most effective choices in areas like budget allocation and delivery format through a 250-point evaluation that reveals the DSP or platform that will serve you best.

Unified reporting and easily customizable dashboards make it easy to generate clear insights from vast pools of data and use them to refine your campaigns to the highest degree. Whether you want to be hands-on and keep direct control of your campaigns or you’re looking for more significant support, AUDIENCEX has a service model for you.

When it comes to achieving your marketing goals, programmatic advertising is a game-changer. If you’re ready to elevate your advertising, contact AUDIENCEX. We’re happy to answer your questions and explain how our independent trading desk technology and support can help you exceed your targets.

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