Programmatic advertising has become the new king of digital advertising. In the space of a few short years, many business owners have turned to programmatic technology to facilitate their ad buying and displaying process. By 2023, it is said more than 90% of total digital display expenditure will go towards programmatic ad buys.
This is no surprise. Compared to the alternative, where a human is solely accountable for purchasing and placing ads across media platforms, programmatic advertising technology has massive advantages in terms of efficiency and accuracy.
However, to truly benefit from this form of digital marketing, it is recommended you utilize the services of a specialist programmatic advertising company. There’s just one question: If technology effectively takes over the role of humans with programmatic advertising, what does an external agency actually do?
Programmatic technology explained
As you will know, programmatic advertising is where technology is utilized to automate the purchasing and selling of ad impressions across media platforms. Impressions come from an assortment of ad types, including:
- Display ads
- Video ads
- Mobile ads
- Digital audio ads
- Paid search ads
- Paid social ads
- Geo Targeted and geofenced ads
As far as ad buying goes, programmatic technology’s main purpose is automating the bidding process. This is for real-time auctions that occur when users visit websites featuring ads. Real-time auctions work in two directions. For advertisers, it allows them to purchase ad impressions that provide results. For publishers, they can sell their advertising space with efficiency and at scale.
How programmatic technology automates the bidding process
Ad buying platforms, aka demand-side platforms (DSPs), use programmatic technology to dynamically serve ads to users. They account for the personal interests and browsing habits of individuals – utilizing data management platforms (DMPs) to do so – to determine which ads display for each user.
For instance, when a person visits a web page, a whole host of information is sent to the aforementioned platforms that deal with programmatic ad impressions. Along with sending data about the person (online behaviors, demographic information, etc.), it also includes data pertaining to the webpage (subject matter, page topics, etc.).
Once these platforms receive the information, they commence an auction to decide the ads which are displayed on the webpage. Buyers at these auctions are brand advertisers. Working in conjunction with their tech and media partners, they will set a specific budget to determine how much they’re happy to pay for their ads to be displayed for specific audiences.
The auctions are conducted with “real-time bidding.” Yet they are concluded slightly quicker than your traditional auction – they are handled by ad buying platforms in milliseconds. This means the auctions are done in the time it takes for a user to click on a webpage URL and for the page’s content to load. These platforms handle billions of these auctions on a daily basis.
The role of a programmatic advertising company
Programmatic advertising tech utilizes algorithms to ensure your ads are dished out to the right users at the right moments. As a result, why do you even need to enlist the services of a programmatic digital advertising company?
Well, think of ad buying platforms as a guitar. Inexperienced players can hit a couple of notes after a bit of practice, yes. Still, an expert guitarist – in this case, a programmatic agency – is someone capable of stringing together a memorable song that people want to hear. They can take the complexity of ad buying platforms and use their proficiency to maximize results.
If you’re new to the programmatic creative and data analysis side of things, it’s fair to say you will quickly become overwhelmed. There are millions of data sets to use for targeting specific audiences. This includes each viewer’s location, interests, demographic, behavior, purchasing funnel stage, time of day, and more. Heck, you can even utilize the real-time weather in their exact location.
Furthermore, you need to optimize for many different data points , along with testing and learning from targeting strategies. In theory, programmatic presents the opportunity to create the perfect advertising campaign. You can target users that are most likely to be converted into customers, displaying your ads in the right place, at the right time, and with the creative that has the best chance of resonating with them. Yet this ‘perfection’ is only possible if you have the right people behind your programmatic ad campaign.
This is where a programmatic ad company comes into the equation.
Simply put, most brands don’t possess the in-house expertise, time, or resources to conduct their own programmatic-based ad campaigns. They cannot commit to the demands of optimizing day-to-day campaigns, producing effective creatives, or tackling endless data drives. However, they also don’t have to. By outsourcing to a specialist programmatic ad technology company, they can go down a more cost-efficient and effective route for their programmatic ads.