Programmatic Advertising – Complete Guide For 2022

Programmatic advertising is a way to automate the negotiation process when agreeing on advertising space. It also allows for machine learning, providing companies with the ability to track their ad progress and keep an eye on customer habits and trends.

The use of these automated advertising platforms is increasing year on year. It reached around 81% of all advertising space being purchased over a programmatic platform in 2021.

How Does Programmatic Advertising Work?

Programmatic advertising is the process of finding advertising space that will work best for your business based on previous data and conversion within those particular slots.

A buyer can bid on advertising space against other advertisers and secure the best ad positions through an interactive platform without having to negotiate prices, analyse data or set up meetings with the seller.

The Different Types of Programmatic Advertising

Audio Advertising

Audio advertising space gives you the opportunity to advertise on podcasts, music streaming services and live radio. This advertising method is increasing in popularity as the listenership for podcasts grows each year. It’s also a great option for advertising as you can tailor ads for specific audiences based on their interests. If you’re selling a specific product, you can add your ad to podcasts related to that target audience, meaning that you reach an audience that you know will be interested.

Alternatively, you could advertise on live radio, targeting a specific area based on where your business is located, or reach a more generalised audience to pull in customers. Using a slot on the radio that usually has a high listener take up (for example, at commuting times while people listen in their cars) is likely to give you more uptake. Whereas podcast adverts will only be heard by people listening to the podcast, but they might be a more tailored audience.

Programmatic advertising allows you to determine which method and ad slot will be the most effective.

Video Advertising

Video advertising allows you to target your audience through YouTube, TV, or other streaming app services. You can purchase ad slots based on the programme that the potential customer is viewing to tailor your service to people that you know may be interested.

Programmatic advertising will allow you to view the normal conversion rates and viewership of each advertising slot and will give you figures based on the number of people who are likely to see your ad.

The downside here is that most of these ads are skippable. So although the audience is large, it’s unlikely that all of those people will watch your full advert.

Social Advertising

Social media is growing, and the platforms are developing all the time. With social media, you can boost adverts to specific target audiences and buy space depending on the clicks and impressions usually created from certain combinations of audiences.

This is a fantastic way to view ad success. Although these ads can be scrolled past, it measures the advert’s conversion based on clicks and impressions, not just people who have seen it.

Billboard Advertising

Billboard advertising comes in two forms – traditional and digital. Digital billboard ads usually show a video advertisement just like a TV, or can be interactive, so passersby can touch the screen to achieve a desired effect.

These are a great option for high traffic areas such as city centres, especially if you’re looking to capture the attention of a local audience.

However, these are more complex when it comes to success measurements, as you can’t really determine which customers were converted by the advert.

Ways to Use Programmatic Advertising

Real-time Bidding

Real-time bidding is the process where advertising space is offered on specific websites or audio streaming sites. Businesses can then bid for the space that they’d like against other companies and the highest bid wins the space.

These platforms offer data on traffic that sees or hears information on a particular ad space historically to give buyers accurate insight into which spaces are likely to achieve the best conversion.

Private Bidding Platforms

A private bidding platform works in the same way as a real-time bidding platform except it is exclusive to guests or people who request to be part of the bidding process. This is often because the ad space that’s on offer

targets a specific type of audience, meaning that certain businesses will be more interested than others.

Ad Networks

Being part of an ad network means that you’ll get to view potential advertising space for a select few websites that are related to your target audience. This way you can ensure that any advertising space you purchase will reach the people who are likely to be interested in what you have to offer. These usually work as private bidding platforms where you’d have to request to be included and this may cost a small fee as you’ll have access to the space before people outside the platform.

Ad Exchange

An ad exchange is a wider platform that offers access to multiple ad networks, meaning you can bid for ad space across a more diverse range of audience metrics.

To launch on an ad exchange, you’ll need to use a demand-side platform (DSP) or a supply-side platform (SSP).

Demand-Side Platform

To qualify to bid for certain types of ad space, the business will need to let the demand-side platform know what products they’ll be selling so they can be fitted with the most appropriate ad networks. When a suitable placement comes available, the DSP will alert the advertisers that they can bid on the space.

Supply-Side Platform

A supply-side platform allows advertisers to access multiple ad spaces and it would be their responsibility to reach out and bid for the space. It more closely mirrors traditional ad space selling where the advertiser would approach a space seller.

How Can Programmatic Advertising Benefit Your Business?

Programmatic advertising can benefit your business massively in a number of ways.

Cost-effective

Purchasing advertising space traditionally means that you’ll need to set up a meeting with the company who sells the space to negotiate a reasonable price. This often means that you’ll pay over the odds as the buyer has no comparator regarding how much the space is worth.

With programmatic advertising a bidder will understand how much other people are willing to pay for that same space and allow them to pull out when the price gets too high. It also benefits the seller of the space as they’ll still get a higher price for the space if it’s more valuable.

Data Insight

Programmatic advertising allows you to view previous successes from each advertising space, looking at audience trending slots and times available. This allows you to determine the more beneficial slots for the ad.

Time Saving

Without the traditional negotiation meetings and research into best times to launch your ad, you’re saving the business a whole lot of time and resources.