What is Programmatic Marketing?

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Other than developing exceptional products and services, organizations have to determine the best way of creating awareness. Otherwise, the sales generated will not match the projections and potential of the products. As the entrepreneurial landscape becomes more competitive, the need for advertising is even greater.

In our ever-expanding digital world, many products and platforms are competing for the viewer’s attention. However, reaching your target audience and eliciting the desired reaction is not just about advertising, but doing it correctly. Fortunately, digitization has also come with new and more effective methods of advertising. One such method of marketing that is increasingly becoming popular is programmatic marketing.

According to the Programmatic Marketing Forecast report by Zenith, spending on programmatic ads will reach $98 billion in 2020. As a result, programmatic ads will account for 68% of digital ad spend globally. As technologies like machine learning, artificial intelligence, and 5G are introduced to programmatic marketing, its effectiveness will increase significantly, making it even more appealing to advertisers.  

Read on to find out what programmatic marketing is, how to use it, and why it should be part of your marketing strategy.

What Is Programmatic Marketing?

Programmatic marketing is a marketing strategy that involves buying and selling of ad inventory. The process relies on an automated bidding system to execute the trades for you in real-time. Such ads are hyper-targeted and very effective as advertisers can target specific audiences in specific contexts.

Despite being around for roughly a decade, it’s only recently that programmatic marketing has become a mainstream advertising method. Its share of digital advertising has risen from 10% to over 60% in a decade long period.

How Does Programmatic Marketing Work?

Artificial intelligence is one of the main technologies that make programmatic marketing unique and effective. AI technologies use advanced algorithms to analyze the behavior of page visitors. The insight drawn from such data facilitates real-time campaign optimizations targeted to users who have displayed particular interests. This hyper-targeted approach to advertising increases the chances of converting significantly.

Companies can collect such audience data on their own to use targeted ads on their users, or they can source it from third-party providers.

Programmatic advertising uses an ad impression auction system. When a page that is set up for programmatic advertising receives visitors, an auction for ad space is put up for interested companies to bid.

Depending on the data drawn from the visitor, relevant companies are entered into the auction. Such auctions usually have many advertisers competing for ad space, but only one can gain the spot, the company that submits the highest bid.

With AI, the data that makes programmatic marketing possible is collected. However, what makes this strategy efficient and convenient is that it is automated. The entire process of analyzing a user, bidding for ad space, selecting a suitable company, and displaying the ad takes place in milliseconds.

Therefore, advertising companies are required to set their maximum bid in advance, as do their competitors. Any time an advertisement space is available, the bids for suitable businesses are compared. When the page loads, the user will see the ad as if it were pre-loaded.

With programmatic advertising, your ad will only be displayed to individual users as opposed to all the visitors of a site. Though it may seem like a company gets little exposure, the impressions made on the individual users are much more valuable.

Think of it this way. When an ad is displayed to the general audience online, not all are interested in your products or brand, or are in a position to buy. With programmatic advertising, the ads will be displayed to users who have shown interest in your or related products and are close to making a buying decision. This increases the likelihood of making sales per impression.

To ensure the ads displayed are relevant to a user’s needs, the algorithms use the following metrics to analyze the user:

  • Behavior
  • Level of engagement
  • Location
  • Social engagement
  • Time per visit

The simplified version of how programmatic advertising works is as follows:

  • User clicks on page
  • Based on analyses, an auction to bid for an advertising spot is put up by the page owner
  • Advertisers compete for the spot through an auction in the marketplace
  • The advertiser that submits the highest bid wins the advertising space
  • The winning ad is displayed on the page
  • Users click on the ad to gain more insight about products and purchase

Why Use Programmatic Marketing?

The primary goal of advertising is to increase sales. In this regard, programmatic advertising has benefits that can help you achieve revenue targets.

1.      You Can Determine the Frequency

Depending on your target audience, they may be available online to view your ads at specific periods of the day. With programmatic ads, you can choose when you want the bids to be submitted and at which frequency. This not only puts you in front of potential clients but also ensures your ads are displayed when they’re most likely in a position to follow up with it.

2.      Price Flexibility

Instead of paying a predetermined price for advertising, you can set the bid amount to whatever is suitable for your business. Depending on circumstances or results, you can adjust the bid amount. Along with this, programmatic marketing offers you advanced targeting, which gets your brand more relevant impressions.

What are 3 Key Strategies to Ensure Good Performance?

The benefits and convenience of using programmatic marketing are unquestionable. However, without the right strategy, you will not gain the desired results.

1.      Know Your Target Audience

The first step in launching a successful programmatic advertising campaign is determining who your ideal client is. You can subdivide target audiences into different segments and develop ads with messages customized for each.

2.      Set a Flexible Budget

Though you can set the maximum amount for your bids, your strategy’s success is also dependent on the amounts set by competitors. As such, depending on the performance of your ads, there may be a need to adjust the bid amount.

3.      Choose Your Ad Tech Vendor Wisely

For your programmatic ad campaign to be successful, you should work with an ad tech vendor. Their industry expertise and knowledge in different strategies will be invaluable. However, you must choose an ad tech vendor with experience, matches your budget, and is equipped to help you achieve your goals.

Do you want to take your marketing game to the next level? ATTN Agency offers full-funnel marketing services to help increase conversions and amplify your brand’s value. Reach out to us today to find out how programmatic marketing can boost your company’s growth.     

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