Programmatic advertising allows brands to place advertisements on platforms their target audience will most likely visit. It is fast, cost-effective, and enables smarter strategies than direct advertising.
According to a Programmatic Digital Display Advertising report by eMarketer, Over 90% of all digital display ad dollars transact programmatically.
What is Programmatic Advertising?
Programmatic advertising allows digital marketers to purchase advertising space using automated technology and machine learning, typically through a demand-side platform (DSP). It enables marketers to identify the best combination of site real estate for their product ads.
Programmatic advertising is also known as real-time bidding because the process takes only a few milliseconds.
Programmatic also enables effective and economical use of the budget by offering many targeting choices and the option to merge them into a single campaign.
Brands can use various programmatic advertising platforms to sell ad inventory to advertisers on publishing sites. To buy the stock and set their ads, advertisers place bids.
Here is how the process works:
- An automated bidding process begins displaying ads to visitors who have arrived on a website that uses programmatic ads. The publishing site develops the ad space for the viewer on the supply-side platform.
- It serves as an indicator for demand-side media to place bids on the product, representing the website and the user’s attributes. DSPs assess the data and assign a distinct value to the advertisement placement based on the site’s and user’s characteristics.
- Supply-side platforms (SSPs) determine which advertisers can place ads on the publishing site, while DSPs solicit bids for ad placement.
Says a Statista study on Programmatic Advertising Spending,
“The United States spent USD 167 billion on programmatic advertising in 2021. By 2026, programmatic ads will account for 86% of all digital ad revenue.”
Programmatic advertising simplifies purchasing ad inventory across a wide range of platforms.
Additionally, it offers advertisers more precise control over creative assets, budgets, and placements. With programmatic advertising, marketers have access to a variety of targeting options.
Here are the steps to make programmatic advertising successful.
Targeting Strategies for Programmatic Advertising
Here are the top six prevalent targeting strategies for efficient programmatic advertising:
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Behavioral Targeting
Marketers can show ads to specific people on different devices based on their demographics, behaviors, intentions, or interests. This is called behavioral targeting. Demographic information could include things like gender, age, income, or level of education.
Interests consist of things like fitness, cooking, or gardening. For behavioral targeting, marketers can use the data they collect by tracking what people do on their websites.
It’s important to remember that very soon, there will be no third-party cookies for advertisers to use for behavioral targeting. So, marketers must use more privacy-friendly targeting methods, like first-party behavioral targeting.
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Custom Site Lists
One effective tactic is website or app targeting, which accurately identifies the websites or apps you want your ads to appear on.
Marketers frequently combine inventory types within a single campaign when utilizing the available targeting options.
Using behavioral targeting, for instance, you can apply the desired audience segments to a subset of the sites you wish to target- the (website or application) you have compiled.
Unlike private marketplace transactions, custom site lists typically have more affordable prices and help guarantee that the ads will be served on the most beneficial sites.
However, there is a small price to pay for this advantage. You lose some control over where and how much money is spent on ads on your website when you run custom site lists programmatically.
A private marketplace agreement is preferable for advertisers who require greater control.
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Private Marketplace
A private marketplace (PMP) grants access to prepackaged deals, in which providers and publishers combine the best combinations of ad inventory.
These deals typically have a higher CPM and ensure that the best ad placements on a website are awarded to the highest bidder.
PMPs are among the most effective ways to get your brand in front of qualified traffic in highly visible placements. It is not very economical but delivers a good deal for marketers.
PMPs are great for campaigns where a brand wants premium placements and high-quality traffic. Moreover, PMPs are a safe and private method to reach specific, high-quality audiences.
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Retargeting
Depending on the product, it may take several visits before an online shopper decides to buy. Retargeting lets marketers keep customers interested by bringing them back to a website to keep their interest, offer more information, or keep their brand in people’s minds.
How does it operate?
Advertisers can target specific segments with tailored messaging. These messages go into audience pools based on website interactions like particular page visits, cart abandonment, or button clicks.
Retargeting is, in general, a crucial tactic for retaining and acquiring conversions from consumers who have previously expressed interest.
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Geotargeting
Marketing greatly favors geotargeting and geofencing, which target individuals within a defined geographic perimeter, or “fence.”
These virtual boundaries are constructed around particular points of interest, like a competitor’s location or a gathering spot for your target audience.
Geotargeting enables teams to effectively and discreetly engage with audiences situated in strategic locations. Marketers can personalize and target ads based on first-party data (such as a zip code entered at checkout) or location-based data.
Also Read: Programmatic Advertising Best Practices for 2024
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Contextual Targeting
Contextual targeting is another privacy-conscious targeting option that advertisers can use in their programmatic campaigns. Contextual targeting displays advertisements based on the content of a particular website, page, or channel.
Programmatic targeting can help achieve high accuracy by targeting distinct content categories on individual web pages.
Targeting is one of the areas where the impending cookieless future will have the greatest impact.
Fortunately, some targeting strategies, like contextual targeting and PMPs, are either already privacy-friendly or can be made so by using first-party data.
However, this shift requires advertisers and marketers to test and adopt new technologies and strategies for effective programmatic targeting.
Advertisers should change the mix of their targeting strategies to find relevant audiences while being mindful of privacy concerns. It will help to focus on developing direct relationships with consumers and using their first-party data.
Wrapping up:
Programmatic ad targeting ensures that advertising budgets are allocated to deliverables intended for relevant audiences.
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