Programmatic Advertising Overview
Programmatic advertising is a sector of paid advertising that has been growing rapidly and shows no signs of slowing down. According to Statista.com, in 2020 – programmatic advertising accounted for roughly $126 billion dollars, accounting for roughly 30% of all advertising spend.
Programmatic advertising is the process of automated purchase of display and/or video advertisement slots through the utilization of data, new technology, and mediums. Programmatic advertising has quickly grown into a wide range of channels, including display, mobile, video, social, audio, and connected TV. However, for simplifying things and to make things not too confusing, we’ll limit programmatic advertising to display ads.
So what is a display advertisement? Anything that attracts a user to a website, typically done through visuals like an image or video. Yes – Google and Facebook are forms of display advertising, in fact, they are the most popular forms of display advertising. However – since they don’t have any competitors other than each other, they are able to charge a premium for their own inventory.
In short, we can think of programmatic advertising as placing ads on the rest of the internet. Any website you can think of, ranging from weather.com, nytimes.com, espn.com, allrecipes.com, and anything that falls in between.
Differences between programmatic and pay-per-click advertising
Cost savings – the average cost per click on Facebook and/or Google is between $3-15, meaning your advertisement has only been shown to a handful of users. The cost per click of programmatic advertising is usually $0.05, meaning that your advertisement is shown close to 1000 times for the cost of one click on the other two platforms.
Data driven – since the backbone of programmatic advertising is built on technology, you are able to leverage “the rest of the internet’s data to create segments. Most websites that don’t fall under Google or Facebook send all of their data to DMPs (data management platform) to analyze and aggregate the data. From there, the DMPs create user-friendly segments, similar to Facebook to be used on the DSPs (demand-side platforms).
By utilizing DSPs (demand-side platforms), you can create, manage, and optimize a programmatic campaign. Yes, Google AdWords and Facebook can be considered DSPs, but because of how specialized and unique they are, the industry does not view them as such.
Programmatic products and offerings
Segment targeting – target users in certain behavioral categories created by DMPs like Oracle, BlueKai, Adobe.
Contextual targeting – target users based on a category of websites potential new customers would typically browse.
Placement targeting – target users based on a list of websites potential new customers would frequent.
Geo-targeting – target users based on identity and behavior, layered on with a specific geographic area, down to zip code, or GPS location, depending on the DSP.
Well, there you have it! This was our basic guide to help you get a better understanding of paid advertising through Facebook, Google, and Programmatic, and why it’s important for your business!