What is programmatic media buying and what are its advantages over traditional ad buys? Our comprehensive guide will walk you through it.
Automated ad placement helps you get your message to the right audience at the right time
Historically, advertising has been all about getting the most eyeballs on your ads. Advertisers would work directly with ad networks to place their ads while paying a fixed rate for impressions. However, that strategy came with risks; for example, you might pay for thousands of ad impressions that never reached your target audience. Even worse, for those in the traditional television advertising space, was the fact that you had no way of measuring exactly how many impressions your specific ad received — your rate was the same even if viewers switched to another channel when commercials rolled.
Advances in ad technology have made targeting specific audiences and tracking engagement much more feasible, but with that comes a complicated mix of networks, exchanges, and manual negotiating. Enter programmatic media buying, which allows advertisers to partner with publishers and ad platforms that use an automated, data-driven approach to ad placement. However, just because many of the manual processes are automated doesn’t mean you can put your campaigns on autopilot. Here’s everything advertisers should know about programmatic media buying to maximize their results.
Expand your knowledge of the programmatic ecosystem even further with our comprehensive resource, What Is Programmatic Advertising?
What Is Programmatic Media Buying?
Programmatic advertising refers to an automated, algorithm-driven method of buying ad space and running ads. In the traditional media buying process, an advertiser would connect directly with a publisher to buy ad inventory, agreeing to a specific rate for a total number of impressions. With programmatic advertising, advertisers and publishers can automate the bidding process using pre-set parameters and guidelines to ensure they’re each getting the best possible deal that suits their specific needs. Advertisers can decide the maximum rate they’re willing to spend for the audiences they want to reach; meanwhile, publishers can set minimum thresholds for ad rates. Bidding for inventory happens in a fraction of a second.
Programmatic media buying has several advantages over more traditional methods of advertising. Data-driven algorithms increase reach while ensuring that your ads reach the right audience at the same time. Meanwhile, programmatic platforms measure the performance of campaigns in granular detail, giving you a clear idea of what’s working and what’s not and providing an opportunity to make changes in real-time. Traditional ad buying is slower and harder to scale; it also gives advertisers less control over ad inventory and placement, making it more challenging to target specific audiences.
Programmatic media buying can connect advertisers with digital platforms from mobile to web, though connected TV is emerging as one of the most promising programmatic platforms. Connected TV content reaches about two-thirds of American households, and it’s an especially effective medium for connecting with the Millennial and Generation Z age groups. To learn more about how connected TV combines the targeting power of mobile with the creative potential of a bigger screen, check out our free ebook: The Essential Guide to CTV Advertising for Search and Social Marketers.
Key Features of Programmatic Media Buying
Getting the most out of programmatic ad campaigns requires advertisers to understand how they work. These are the defining features of programmatic advertising:
- Real-time bidding: The actual buying and selling of programmatic ads and ad space is called real-time bidding (RTB). RTB essentially works as an auction in which advertisers bid on a publisher’s inventory, with the winner’s ad being shown to the viewer. Though it sounds like a lengthy process, it happens almost instantaneously.
- Supply-side platform: The supply-side platform (SSP) is what facilitates real-time bidding. SSPs enable publishers to sell ad space and connect them with multiple ad networks in order to find the best yield.
- Demand-side platform: On the other side of programmatic media buying is the demand-side platform (DSP). DSPs allow advertisers and ad networks to buy ad space and find publishers based on the advertiser’s goals and targeting objectives.
Think of the supply-side and demand-side platforms as two sides of the same programmatic coin. Together, they enable real-time bidding, automating what was previously a tedious process and matching the advertiser’s intent with the most appropriate outlet, all while netting the best possible deal for the publisher.
Programmatic Media Buying Best Practices
Like any other type of advertising, programmatic media buying requires a thoughtful, informed strategy in order to deliver favorable results. You’ll spend less time finding publishers and brokering deals, which means you can re-invest some of that effort into maintaining programmatic advertising best practices.
Know Your Audience
You can’t hope to reap the benefits of programmatic media buying if you don’t know who you’re trying to reach. The first thing to do is determine your audience; is it young adults? Older parents? People in a specific geographic area? Those with certain interests? Once you’ve defined that, leverage any internal and third-party data you have to get an idea of what kind of messaging will be most effective. For example, Zoomers value sustainability and inclusivity, so they’ll respond better to companies that share the same values. From there, take advantage of your advertising platform’s targeting capabilities to create a hyper-targeted ad campaign.
Track Your Progress
How can you tell if your initial efforts are working? By knowing which metrics to track. One of the most important is impressions, or how many people have actually seen your ad. Programmatic advertising typically functions on a cost-per-mille basis, meaning advertisers set the rate they want to pay for every 1,000 views. This type of performance pricing ensures that advertisers aren’t spending money on unused or unviewed ads.
Of course, garnering impressions is often the first step; the end goal is usually conversions. Specific conversion details will vary depending on the advertiser and product or service; it might mean making a purchase, signing up for a free trial, or downloading a free report. You can compare this to your impression data to get an idea of what percentage of those who view your ads take action. If your conversion rate is low, it might be time for a new creative approach.
Finally, keep an eye on return on ad spend, or ROAS. The importance of ROAS isn’t limited to programmatic campaigns; in any form of advertising, you need to know that you’re getting back more than you’re putting in. A good ROAS indicates that you’re budgeting wisely and your campaign strategies are paying off; on the other hand, if your ROAS is low, it’s time to adjust your pricing, switch ad networks, or go back to the drawing board.
Experiment With Different Ad Formats and Creative Strategies
If you’re not getting the results you want right away, don’t panic. Sometimes ads need some creative optimization — and a dose of trial and error — in order to figure out your winning strategy. For static ads, this might mean using bolder color choices; video ads that aren’t performing may be too lengthy or hard to view on a mobile platform. You can try adding interactive elements or simplifying the call to action with a QR code; the right advertising platform will offer a variety of formats, making it easier to find the right fit for your audience.
If you’re focusing primarily on mobile and web programmatic advertising and not seeing results, it could be time to branch out into the world of connected TV. At tvScientific, we’ve designed a highly sophisticated performance TV platform that increases reach, lift, and ROAS — making it a perfect fit for programmatic media buying. Our founders have deep roots in programmatic advertising and digital media, so we understand the challenges of the modern advertising landscape. With over 15,000 targeting segments, you’ll have no shortage of options when it comes to reaching specific audiences. Meanwhile, our platform gives total data transparency and makes it easy to track performance.
To find out how tvScientific can take your programmatic media buying efforts to the next level, get in touch to set up a demo.