Digital channels are all around. Many promise access to apt audiences and show engagement numbers that seem attractive enough. But this is a competitive market with high stakes riding on each decision. That’s why advertisers often find themselves pushed for space or money to figure out how to optimize their ads for each platform and placement. Also, ad tech companies find it challenging to agree on a common language, affecting spending efficiency velocity.
The bottom line is this – these marketing agencies are in a whirlwind of decisions. Therefore they need to look into programmatic advertising options.
What Is Programmatic Advertising?
Programmatic advertising is all about using smart modern tech to buy and sell media on multiple platforms. It’s a way for advertisers to automate buying and placing ads, making it possible for agencies to expand their impact by purchasing more inventory smartly.
Programmatic advertising lets advertisers buy ads through real-time auctions between buyers and sellers. This allows access to more inventory at lower prices than they could through traditional methods. And the method is now all around. In fact, by 2026, programmatic advertising is projected to generate 86% of overall digital ad revenue.
How Does Programmatic Advertising Work?
Programmatic advertising is a targeted online ad-buying process that uses algorithms to determine which ads to display on which sites.
The process typically starts with a media buyer with a budget and a list of target audiences. The buyer then uses third-party sources like Facebook and Google data to identify the websites that best match their target audience. They then use programmatic software to buy space on those websites in real-time auctions, as prices fluctuate based on each site’s inventory available at any given moment.
Why Programmatic Advertising?
Programmatic advertising is not just the future of digital-focused brands. It’s here now.
1. Better Campaign Performance Overall
Programmatic advertising is a better way of reaching an audience, which means a brand can communicate its message more effectively. It also lets advertisers monitor and optimize their campaigns in real-time. Therefore, they won’t need to wait until the campaign ends to determine if it was successful or not—they can check its progress immediately and make changes as needed.
2. Real-Time Optimization
There’s no room for error while running an ad campaign. Every moment counts, and every change can mean the difference between success and failure—and this is why programmatic advertising is so important for agencies. Agencies can use real-time data to optimize a campaign as it’s happening, so there are no wasted resources or wasted time spent trying to figure out what works best for each persona within a group who all fit a certain profile (which is what traditional media buys often entail).
3. Less Wastage
Wastage is a massive problem in the advertising world. Many advertisers are frustrated by their current advertising because they feel like they are paying for ads that are not getting any return on their investment. Programmatic advertising can help solve this problem by allowing advertisers to be more specific about where their ads appear. This means there is less chance of wasting money on ads that don’t perform well, leading to better ROI for advertisers.
4. Contextual Campaigns
Programmatic advertising also allows for contextual campaigns, where the ad is targeted towards a specific audience based on what that person has been looking at or reading about recently. Suppose a brand is trying to sell something related to travel. In that case, Google or Bing searches related to travel should include your ad in the results.
Benefits of Programmatic Advertising for Agencies
1. Scalable and Flexible Spending
With programmatic advertising, agencies can adjust their budget on the fly based on their campaign’s performance. Here’s how: if a specific ad performs better than others, one can increase that ad’s budget while reducing spending on other ads. This allows planners to scale up or down as needed without worrying about paying too much or too little for ads that aren’t/are working.
2. Programmatic Reach Is Huge
Programmatic reach is huge. Agencies can buy “space” as small as a single impression or as large as a million impressions in one auction. In other words, agencies are not limited by ad size or placement, so they can precisely target any audience they want to reach.
3. You Are in Control
The other significant benefit of programmatic advertising is that agencies can have complete control over their ads’ appearance and placement. This means agencies can choose whether or not they want their ad to appear on certain sites or apps and when and where it will appear within those sites or apps. This allows for more precise targeting without sacrificing creativity or messaging—which means higher engagement rates for everyone involved.
4. Transparency
Programmatic advertising fosters transparency. Since everything happens automatically behind the scenes (even without human intervention), there’s no need for manual oversight or approval process, which means faster turnaround time and less overhead costs.
5. The Targeting Possibilities Are Endless
The possibilities are endless regarding the types of people and places agencies can target with programmatic campaigns. Demographic segments like age, gender, and location can all be targeted. Also, agencies can drive more profoundness by targeting based on interests like “cooking” or “home decoration.” And if they’re looking for a specific type of person, like a homeowner in the Midwest who likes gardening, there’s probably an audience group out there that matches that description that can be approached through the right programmatic platform.
Challenges
1. Viewability & Impression Fraud
Fraudulent impressions can include bots, invisible ads, and low-quality inventory, which can hurt the brand’s reputation. The challenge is that these fraudulent impressions are sometimes hard to identify and track. That said, this is a challenge not specifically made worse with programmatic methods but is a general issue the digital medium is struggling with.
2. Lack of Knowledge/Expertise
Understanding the landscape of digital advertising can be difficult for the uninitiated. This can lead to agencies missing out on opportunities or not maximizing their ROI from programmatic ad campaigns.
3. Inventory Quality
It’s easy to end up with low-quality inventory that will hurt the brand reputation and lead to wasted impressions and clicks that do not convert into sales.
4. Brand Safety
As programmatic advertising becomes more common, brands are becoming more concerned about their ads appearing next to inappropriate content. This has led to the rise of brand safety tools that allow advertisers to exclude certain sites and types of content from their campaigns.
5. Creative Forms for Programmatic (variety of sizes/formats)
For programmatic advertising to be effective, advertisers must ensure that their ads are placed on websites where they fit well. Otherwise, they can look like abrupt ads. For this reason, there is a demand for creating forms that can be used in different sizes and formats.
Final Word
If you haven’t already realized the prominence of programmatic advertising and how it can help your portfolio of brands grow, then it’s time to take notice. It is possible to reach the right audience at just the right time using programmatic technology while warding off all the challenges. That’s where Aroscop can help. For more information, connect with us today.
