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Programmatic Advertising 101: Basics You Should Know

Programmatic Advertising 101
April 30, 2021

Programmatic Advertising 101: Basics You Should Know

Apr 30, 2021
Devyani Paliwal
Devyani is an ACJ graduate with a bachelors in English Literature. A voracious reader since her school days, cinema aficionado and music enthusiast, she has been doing content writing for some time now.

The next big thing in advertising, programmatic advertising has been on the minds of all the people in the industry. Many have heard about it owing to the roaring success it has been in the US. Currently, there are estimates that 88% of the display ads are going to be bought programmatically in the States by the end of 2021.

To all those who still haven't been able to figure out what it really is, we have simplified programmatic advertising for you. 

What is Programmatic Advertising?

Simply put, buying digital advertising using software is called programmatic ad buying. Traditionally, this is done with tenders, quotes, negotiations, and so on while programmatic buying purchases display space by using machines and algorithms.

But just because it has ‘programmatic’ in the name, it doesn’t mean that the entire process has been automated. The traditional process includes preparing ad tags or insertion orders, and this is a pretty tedious and labour-intensive task. Programmatic advertising gives humans more time to optimize and enhance the ads. 

How Effective is Programmatic Advertising?

Programmatic advertising has a lot of benefits that work together to make it so effective. Some of these are:

  • The reach it provides is tremendous as it supports several ad exchanges as well as networks. This helps advertisers in getting to a wider ad space, as many as thousands of websites simultaneously. It is affordable and much less tedious.

  •  As it provides advertisers and publishers with real-time access to all the data on ad placements and all related activity, transparency is maximized. This has proven to be a key issue in the industry.

  • As mentioned in the last point, because of the access to real-time data as well as advanced reporting on ad placements, advertisers and publishers can easily optimize their campaigns.

  • As it provides access to a massive ad inventory to advertisers, that includes several ad exchanges as well as networks just a click away, programmatic ad buying ensures that the relevancy of the ads for their target audience is maximized  

What are SSP and DSP?

There are several platforms out there that help advertisers and publishers with programmatic advertising. There are various types of platforms such as Demand-Side Platform (DSP) and Supply-Side Platform, Ad exchange, and Data Management Platform. 

SSP works on maintaining the publisher’s inventory. After submitting the webpage which acts as the source for the ad when everything is agreed upon the Ad Exchange, the publisher then puts a pixel on their page to monitor the behaviour of visitors. 

Similarly, DSP is for the advertisers. This type of platform is dedicated to expediting the advertisers' process. They make their bids on the platform and following that, the decisions are made by the platform for them. The decisions include deciding which ad will be placed where so that it gets the most number of clicks. 

How is Programmatic Advertising done?

To make the most of programmatic advertising, the following steps need to be kept in mind:

1. Understand your marketplace

This is the first step in all formats of advertising and still can’t be stressed enough. Since this is a new zone in the advertising world, acclimating yourself to the whole process becomes necessary once again. 

A lot of new ideas and terms will come your way and you need to be prepared. You should properly look into each and every term so that you’re not caught off guard later on in the process. 

2. Set Goals

Another prerequisite, knowing your objective going in is vital to advertising. Go over the data that is already there to choose the type of advertising awareness you'll require and then select a strategy that fits it. 

This will prove to be extremely helpful when you work on setting your short as well as long-term goals. You should only choose to do programmatic advertising when you clearly know why you'll be needing it. Don’t just do it for the sake of doing it.

3. Factor in Human Involvement

Programmatic advertising does not mean that in between all the algorithms and machines, human investment will not be required. Since there are many types of platforms, some that offer fully managed services while others offer half, there will still be work to be done.

Further, many just provide technical assistance which means that the job of running the programmatic buying activities will fall on you only. Also, the work doesn't just end here. 

You'll need to appoint skilled people that will plan, control, and work on the optimization. The bottom line is, to make the most of programmatic advertising, you need to find the right balance between automation and human involvement. 

4. Secure the Brand

Contrary to what we like to believe, even programs can go wrong. Sometimes programmatic ads end up being displayed in the wrong place due to their reliance on algorithms. 

To make sure that such a mistake doesn't happen, the demand-side blacklist needs to be continuously updated and tracked for inappropriate sites. There are platforms that let you exclude entire categories from your ad spends and this has proven to be very helpful. 

Another option is to take the help of a whitelist. This provides a list of sites that have been approved, instead of denied and will ensure that your ads don't end up where they are not supposed to be. 

5. Be Wary of Fraud

According to reports, these types of ads are viewable anywhere between 44%-55% but bot fraud costs digital advertisers a significant amount each year. 

However, having said that, when compared to other display ads, their standard 16% is much lower. But you should still always monitor your campaigns, just to be sure. 

Conclusion 

Some of the most well-known names that are effectively using programmatic advertising The Economist, IHG, and Audi. Gradually, more and more names will be added to this list and people start gathering how it functions and how it should be used to make the best use of this technology. Hope the points listed above bring some clarity about programmatic advertising.

For more such content, don’t forget to check out Digital Ready’s Blog section. Further, go over the various digital marketing courses that we offer and take your first step towards becoming a digital marketer. 

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