Programmatic Advertising 101: Everything You Need to Know to Build a Successful Campaign Strategy

You may not have realized it, but you’re seeing programmatic ads every time you visit a website, listen to a podcast, or log into an app. In the past, marketers and agencies would have to negotiate each ad buy and rates separately—a very time consuming and tedious process. Today, programmatic Demand Side Platforms, or DSPs, take the manual work out of the equation. Programmatic advertising automates the ad buying process, making it faster and more efficient. Instead of manual negotiations, programmatic platforms use algorithms to purchase ad space in real-time, allowing for precise targeting and optimization.

In this article, we take a deep dive into programmatic advertising, including strategies for getting the most out of your campaigns. First, let’s get familiar with terms and acronyms associated with programmatic advertising.

Just like most things in marketing, programmatic comes with its own specific language. Let’s begin by understanding the different terms you will need to know.

• Demand-Side Platforms (DSPs): Tools used by advertisers to purchase ad space and manage campaigns.
• Supply-Side Platforms (SSPs): Platforms that help publishers sell their ad space.
• Data Management Platforms (DMPs): Systems that collect and analyze data to enhance targeting.
• Ad Exchanges: Digital marketplaces where DSPs and SSPs trade ad inventory.

Types of Programmatic Advertising

There are two primary types of programmatic ads:

• Real-Time Bidding is an auction-based model where ad impressions are bought and sold in real-time. This method involves:
  • How it works: Advertisers bid for ad impressions as they become available, with the highest bid winning the impression.
  • Benefits: RTB allows for highly targeted advertising and efficient budget use, as advertisers can bid based on the specific value of each impression.
• Programmatic Direct involves buying guaranteed ad impressions directly from publishers without the need for an auction. This method includes:
  • How it works: Advertisers and publishers negotiate terms in advance, securing a fixed amount of inventory at a set price.
  • Benefits: Programmatic Direct offers greater certainty for both advertisers and publishers, ensuring that ad space is reserved, and pricing is predictable.

Secondarily, some marketers may also be able to purchase ad inventory on private marketplaces at a fixed price even before it’s available on public DSPs or at closed auctions on an invite-only basis. These opportunities are less common and usually only available to exclusive partners.

Why Use Programmatic Advertising?

Programmatic is ideal for targeting specific audiences, interests, behaviors, and locations. That leads to highly personalized ad experiences that increase relevance and engagement.

• Efficiency and Automation: Streamlined ad buying and selling processes with real-time bidding.
• Precision Targeting: Data-driven targeting for specific audience segments.
• Scalability: Access to extensive ad inventory across multiple platforms.
• Real-Time Optimization: Instantaneous adjustments to improve performance.
• Cost Efficiency: Optimized spending and reduced waste.
• Enhanced Measurement: Comprehensive analytics for informed decision-making.
• Flexibility and Control: Customizable and adaptive campaign strategies.

When to Turn to Programmatic Advertising

The beauty of programmatic is that it can be deployed at multiple touchpoints throughout the consumer journey.

• Awareness: Utilize programmatic ads to reach a broad audience and increase brand visibility. Example: A new product launch campaign targeting demographic and interest-based segments across display networks.
• Engagement: Focus on retargeting and personalized ads to engage users who have previously interacted with your brand. Example: A campaign using DCO to show tailored product recommendations based on browsing behavior.
• Conversion: Drive conversions by targeting users with high purchase intent. Example: A retargeting campaign offering special promotions to users who have added items to their cart but haven’t completed the purchase.

For most brands, programmatic is an economical option to reach scale within budget while reaching your target audience.

• Scalability: Easily scales campaigns across multiple platforms and channels, expanding your reach and maintaining consistent messaging.
• Precision Targeting: Uses data to target specific audience segments based on demographics, interests, and behaviors, ensuring your ads reach the most relevant people.
• Real-Time Optimization: Allows for immediate adjustments to improve performance, maximizing the effectiveness of your ad spend.

Developing a Programmatic Strategy

Here’s where we get into the nuts and bolts of your campaign. It’s important to address each step to ensure that your strategy is on point.

Set Clear Objectives: Define clear goals for your campaign, such as increasing brand awareness, generating leads, or driving conversions.

Programmatic uses different types of audience data to target:

• First-Party Data: Information collected directly from your audience (e.g., website analytics, CRM data).
• Second-Party Data: Another company’s first-party data shared through a partnership.
• Third-Party Data: Data aggregated from various sources, often purchased from data brokers.

Using detailed buyer personas to understand your target audience’s needs and preferences can help further refine your targeting.

• Behavioral Targeting: Based on users’ online behavior.
• Contextual Targeting: Based on the content users are viewing. (much of this uses AI to help analyze content in and place ads in real time)
• Geographic Targeting: Based on users’ location.

Include programmatic in your integrated marketing strategy: Programmatic advertising should complement other marketing efforts, such as search engine marketing (SEM), social media, and content marketing.

• Brand Awareness: Use programmatic ads to reach a broad audience and increase visibility for new products or services.
• Audience Engagement: Retarget visitors who have shown interest in your brand with personalized ads to keep them engaged.
• Conversions: Focus on high-intent audiences with tailored offers and promotions to drive sales and conversions.
• Cross-Channel Integration: Complement your existing marketing efforts by ensuring your message is consistently delivered across all digital channels.

Fill gaps in your media plan by:

• Extending Reach: Targeting additional audience segments not covered by other channels.
• Retargeting: Engaging users who have interacted with your brand but haven’t converted.
• Cross-Channel Integration: Ensuring a consistent message across multiple touchpoints.

Ensure creative best practices:  Engaging and relevant ads capture attention and drive higher engagement. Follow these best practices:

• Ad Design: Use eye-catching visuals and clear, concise messaging.
• Consistency: Ensure your ads align with your brand identity and messaging across all platforms.

Select the right formats and channels. Ensure that you’re creating the right media mix to reach your consumer. Ads can be placed on:

• CTV (connected TV)
• Video
• Display
• DOOH (digital out of home)
• Audio
• In Game

Use dynamic retargeting creative: this uses data to automatically generate personalized ads for different audience segments. It allows for real-time adjustments based on performance and audience behavior. Benefits include:

• Personalization: Tailors ads to individual users, increasing relevance and engagement.
• Efficiency: Saves time by automating the creative process.
• Performance: Often leads to higher engagement rates and ROI.

Measuring Programmatic Success

Once your campaign has launched, monitor key metrics to evaluate the success of your campaigns. Here are the metrics that you should be tracking to determine how well your campaign is working.

• Click-Through Rate (CTR): Measures the percentage of users who click on your ad.
• Cost Per Click (CPC): The cost of each click on your ad.
• Cost Per Acquisition (CPA): The cost of acquiring a new customer.
• Return on Investment/ Ad Spend (ROAS): The revenue generated compared to the cost of the campaign.

It’s important to regularly conduct A/B tests while your campaign is in market to compare different ad creative, targeting strategies, and bidding methods. Analyze the results to identify what works best and implement changes for continuous improvement.

Emerging Technologies and Innovations

Two of the most talked about innovations are coming to programmatic, AI and audio. AI and machine learning will enable marketers to enhance targeting and optimization by analyzing vast amounts of data and predicting user behavior. This will allow marketers to see faster results and make better targeting decisions. Further, programmatic TV and audio channels will expand the reach of programmatic channels to include podcasts and other connected channels.

Privacy and Data Protection

The growing focus on data privacy has led to stricter regulations like GDPR and CCPA. Advertisers must stay compliant while leveraging data for targeting. To do so, we recommend implementing systems to obtain and manage user consent and clearly communicating any data policies to users–transparency is always the best policy. Even before you begin gathering data, ensure that you have robust security and data protection measures in place and have systems to quickly communicate with consumers in the event of a data breach.

Today, marketers have more options than ever before to build relationships with consumers along the buyer journey. At Inspira, we take an integrated marketing approach to ensure that we’re creating those touchpoints when and where it matters most. Reach out today to learn how our team of marketing strategists can help your brand to grow and thrive.

This article has been published in the Association of National Advertisers (ANA) Marketing Knowledge Center. Click here to visit their blog.

Written By: Alexa Sorensen