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An Introduction and Guide to Programmatic Advertising for Marketers

Programmatic Advertising is everywhere, from online ads and video content to streaming and voice, and may even come to play in print and television. It’s an understandably daunting task to discover and apply every aspect of this emerging technology. In order to grasp the benefits and implications of this type of advert, it’s important to define it in simple terms. The best definition of programmatic advertising is that it is the process of buying and selling media using automation. Buying, placement, and media inventory optimization are all carried out through a bidding system, whereby the highest bidder receives the ad space. Everything is accomplished in real time and provides marketers with valuable data used to determine the effectiveness of a campaign. To further understand programmatic advertising, and why it’s good for marketers as well as their customers, one must learn the principles that form its foundation.

Traditional Versus Programmatic

In the past, marketing involved telephone calls, emails, and other communication between people. There were meetings to attend, conference calls to participate in, negotiations to undertake and agreements to be made. Once a consensus is reached, the contract was drawn up, everyone signed and the marketer paid the sum requested. The adverts were displayed at a specific time and frequency each day for a set amount of time and the process was repeated for each new campaign. The entire process required a great deal of time and other resources, such as support staff, facilities, and equipment, not to mention capital.

Programmatic advertising, on the other hand, eliminates the human factor and instead relies on computers and software to manage the entire process. Ad buying, campaign tracking, and placement are all done automatically, with no lag time, no lengthy discussions and no need for any real human interaction. What’s more, the software has the ability to alter the strategies at any point in the campaign, autonomously, based on performance criteria, rather than waiting for a human response. In this sense, it is more agile and responsive than previous marketing methods and it comes with a much smaller price tag.

Beyond Human Abilities

Information overload is prevalent in every aspect of modern day life. We’re bombarded with images, sounds, smells and ideas in a never-ending stream. Marketers have all of that to manage, plus, wading through massive volumes to determine how best to use it to drive their campaigns. Analyzing data and putting it into action in real time is impractical and, indeed, nearly impossible for a mere mortal. Yet marketers that are manually managing their ad campaigns are trying to do just that. The results are predictably less than stellar, leading to even more analysis and further experimentation, which inevitably leads to more information overload.

Programmatic advertising relies on machine learning and artificial intelligence (AI) technology that is capable of analyzing huge amounts of data instantly. This is made possible through the use of specialized algorithms. The machine is theoretically able to think and react in real time to market changes. Decisions to drive campaigns, based on hard data and the ultimate goal of increasing ROI. Sounds a bit Sci-Fi, but it isn’t meant to replace humans, at least not completely. What it does do is enhance the likelihood that the message will reach real, potential customers. In other words, those that are most likely to convert to a sale based on data that is collected from three primary sources.

Data Analysis

Data is broken down into three tiers, first-, second-, and third-party. First-party refers to data owned by the advertiser, or brand, regarding their customer’s preferences and behaviors. Second-party data is sourced from an agency who shares data with brands to help them structure and optimize their programmatic advertising. Finally, third-party data is readily available information that brands can purchase on a rate card basis, which gives further insight into the customer’s online behaviors. By cross-referencing this information, brands can better understand their customer base, who they are, what they want, and where they are, among other factors.

Data is, in essence, the current and prospective customers of any given brand. For instance, current customer’s buying habits give clues as to new products they may be interested in purchasing. Manually sorting customers by the type of product or service they’ve purchased, the frequency of purchases, amount of purchases, or any other factor, is tedious at best. Programmatic allows brands to continue to focus on customer retention, as well as move towards attracting new customers simultaneously. This is accomplished by way of lookalike modeling, or, looking for those with similar behaviors to the existing customer base and then directing advertising towards them.

Improved Targeting

Marketing is, and always will be, a numbers game. The more eyes you can get on your content, the more likely you are to convert that impression into a sale. However, quantity most certainly will not make up for quality in this case and unqualified leads and clicks are basically worthless. Manual campaign strategies use the majority of the advertising budget on trial-and-error methods, looking for the market that will respond to their offer. The idea is to gradually narrow in on the right target for the message. This involves analyzing copious amounts of data to determine which strategies are working and how best to proceed, which is time-consuming and tedious.

Conversely, programmatic campaigns are based upon the brand’s key performance indicators (KPIs). These data points reveal a great deal about the efficacy of campaigns, response rates, and a myriad of other information about visitors. A basic predictive analysis using historical data gives a general, yet targeted direction for the campaign to begin. Each new analysis collects vital data that is used to determine the best course of action at that point, and the campaign is adjusted accordingly. The process takes mere minutes, versus the countless hours manual analysis takes, and it’s infinitely more accurate.

The Ultimate Assistant

Giving up control of their advertising campaign optimization is enough to make any true marketer queasy. After all, it takes a great deal of hard work, talent and dedication to create a stunning campaign that captures the brand message perfectly. They also understand that it’s necessary to tweak a campaign from time-to-time, and they believe they’ll make the time to do it. The problem is, marketers are people, and people tend to forget, they get distracted, they procrastinate, and they make mistakes. Instead of producing measurable results, they find their campaigns under-performing while their time and money are drained.

The truth is, programmatic advertising reacts more quickly to changes in the market than any human possibly could. It uses real-time data to make adjustments to the campaign when it matters most, at the moment. It works non-stop, every day of the year, constantly measuring campaign performance, always poised to make a quick change to optimize the results. It never takes a holiday, won’t call in sick, always completes the task, and never complains. It is the ultimate marketer’s assistant. In fact, it’s so efficient at what it does, you can literally set it and forget it while you focus on other important aspects of your campaigns.

Getting Started With Programmatic

By far, the most common method of incorporating programmatic advertising is to go through a media agency. Agencies use either a demand-side platform (DSP), or an application programming interface (API), which allows marketers and buyers of digital advertising to manage multiple accounts from ad exchanges and data exchanges through a single interface. This allows companies to scale their marketing efforts using the expertise and technology of the agency, thus benefiting from its experience. What’s more, it helps brands manage their advertising budgets to increase ROI while attaining higher brand visibility.

In some cases, organizations may wish to keep their company and customer data private, therefore, are unwilling to work with an agency and therefore, must create an in-house team. With the proper knowledge, technology and resources, it’s a completely viable option. A marketing team can certainly start buying programmatic ads with a company credit card, focused on the perfect execution of a given campaign. However, one must consider the ambitions of the campaign, logistic feasibility of an in-house operation with regard to your current operations. Scaling campaigns requires investment in infrastructure, hardware, software, and of course trained staff to pull it off.

Programmatic advertising isn’t the marketing technique of the future, it’s very much a part of today’s marketing world. It promises to give marketers access to highly qualified leads through complex data analysis that translates to real-time actions. Not only does programmatic make smarter advert buying decisions based on accurate, real-time data, than a human could, it’s always on duty without pay or complaint. If the results you’ve been getting from your manual advertising campaigns aren’t producing the results you want, consider implementing programmatic advertising into your marketing mix. Experts agree that doing so will improve efficiency, reduce costs and produce a higher ROI than manual ad buying and placement. In other words, you will have more time, money and other resources available for what really matters, creating new campaigns and growing your business.

An Introduction and Guide to Programmatic Advertising for Marketers
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