Understanding Programmatic Ads and What They Can Do for Your Business

Don’t let the name scare you away. While this is a very powerful marketing tactic, it’s not as complicated as it might sound, and – with current market prices – it’s a tactic that is within budget for most businesses.

So What Are Programmatic Ads?

Programmatic advertising, often just called programmatic, is a system of buying ads using software-driven technology combined with large sets of data. As a recent Marketing Land article explained, programmatic ads allow businesses to “figure out how to deliver the right ad to the right person at the right moment.” It’s no wonder they’re so popular with marketers. In fact, eMarketer estimates that programmatic will account for 67 percent of all display buys in 2016!

And How Do Programmatic Ads Work?

Programmatic advertising combines the efficiency of a fully-automated system with the kind of precise targeting that is only possible when huge data sets are used. The software behind programmatic ads gathers many thousands of pieces of data about each user online. This information includes demographics, interests, online behaviours, past purchase history and much, much more – up to 70 million data points in some cases.

Where does the data come from? Apps and websites use logins and little pieces of code called “cookies” to track what a user does online. The information includes the content they read, the topics they search for and the items they look at and purchase. There’s also a wealth of information available in social media profiles. This is then combined with any data a company already has about its existing customers and their buying habits. And on top of that there are several companies that are data aggregators, gathering and segmenting all kinds of information for sale.

Programmatic advertising allows businesses to access all of this information and use it to send very targeted ads. For example, if you run a hotel in London you could choose to have your ads show up on a travel website when a person starts searching for flights to London or when they’re on Google searching for “things to do in London”. Instead of showing your London hotel ad to travelers going all over the world, you’d only pay to show it to the people who are most likely to book a hotel in your city. You could also place your ad on an article about visiting London, so you could reach a potential customer before they’ve even begun searching for their flight.

How Are Programmatic Ads Different from Google Display Ads?

Programmatic ads work so well because they place your ad creative in front of the person most likely to make a purchase. Programmatic ads use many more data points to deliver a more relevant customer for your ad. In Google display ads you’re bidding on a specific set words and demographic parameters. For example, you might be trying to reach mothers with preschool-aged children. With programmatic ads you bid on a set of demographics and keywords and customer behaviour and interests and past purchases all rolled into one. So now you could target mothers with preschool aged children who live within a 20-minute drive from your store, like to buy local products and have been on your website in the last two weeks.

How Can Programmatic Ads Help Your Business?

Programmatic has two main advantages over other forms of ad buying: relevance and efficiency. Traditionally the main focus in purchasing display ads was on where the ad would be seen. With programmatic the focus shifts to who will see the ad.

Relevancy

In traditional online ad buying businesses buy a certain number of ad impressions in a given space and every visitor to that page sees the same ad. With programmatic ads businesses can show different ads to different visitors on the same site.This works particularly well for companies with a large product offering.

Imagine you were a kitchen supply company who wanted to advertise on a food magazine’s website. Instead of displaying one ad to everyone you could tailor your programmatic campaign so each visitor saw an ad for the product they were most likely to buy.

Efficiency

The second advantage of programmatic advertising is its efficiency. Instead of placing an order for ads manually, programmatic ads are bought automatically at speeds much faster than humans could achieve. This way they’re able to input and react to the large amount of data that is constantly being collected, often from multiple sources at the same time, in real time.

Furthermore, as the campaign runs it gains more and more data about the type of customer, location and time of day that works the best. This information is then fed back into the software making adjustments in real time that makes the campaign more efficient and even more accurate over time.

Ad Creative

It’s important to remember that no matter how good the ad buying technology becomes there’s no replacement for great ad creative. Programmatic, like other ad buying strategies, has the option to upload multiple versions of an ad and use real time tracking to discover which ads are the most effective. Take the time to develop excellent creative and review it regularly. No ad campaign is “set it and forget it”, even one as sophisticated as programmatic.

How Much Do Programmatic Ads Cost?

Programmatic advertising can be more expensive than other forms of online advertising but it offers results that no other form of online marketing can match. Actual costs depend on the campaign, the agency you choose to manage your ads, whether or not you use a data aggregator and other factors, but it’s not out of reach, even if you’re just getting started. With the kind of efficiency and relevance that this type of ad buying offers, it’s money well spent.

How Are Other Companies Using Programmatic Ads?

The Amanda Foundation is an animal rescue shelter in Los Angeles. They won last year’s Masters of Marketing Award for Programmatic & Performance Marketing and it’s easy to see why. They created a series of ad creatives that took advantage of the way programmatic can segment the audience. The ads, which you can see below, showed potential future pet-owners exactly how their new best friend would fit into their life. Each ad design appeals to a very specific group of people. It’s a perfect example of showing the right ad, to the right person at the right time.

Image courtesy of Chris Mead

The Economist combined their most popular content with a programmatic campaign to show ads that looked like Economist headlines to consumers who might subscribe to the magazine. The ads went to custom landing pages that included the article featured in the ad creative along with strong CTAs to encourage readers to subscribe. The results? The campaign lead to 650,000 new prospects, 3.6 million people taking action and an ROI of 10:1.

Ready to Get Started with Programmatic?

Getting started with programmatic advertising can be a little intimidating, especially for small- and medium-sized business but it doesn’t need to be. If you’re new to programmatic advertising the easiest way to integrate this type of campaign in your marketing plan is to hire an agency to take care of it for you.