Programmatic advertising consists of automatically buying advertising space.
Very effective, provided you choose your platform and initial settings well, it can give a real commercial and marketing boost to your business.
A quick overview of this very trendy practice!
What is programmatic advertising?
Programmatic advertising, widely used in the digital world, relies on a real-time bidding system.
It uses complex algorithms that detect matches between the data companies provide about their target audience and the advertising spaces offered by various media at a specific moment. In other words, it is a semi-automated system where advertising space is purchased through auctions.
Thus, when an internet user visits a web page or uses an app, an ad impression is put up for auction on a marketplace.
The highest bidder whose profile matches the user's target audience will have their ad displayed.
Of course, everything is automated. The advertiser is not actually sitting at their computer to “buy” the space. Everything works through parameters configured in advance.
The technology at the heart of programmatic advertising
Programmatic advertising became possible thanks to major technological advances and the rise of Big Data, which allow us to better understand and track user behavior.
It all starts with Supply-Side Platforms (SSPs) that allow publishers to sell their ad space. And through Demand-Side Platforms (DSPs), these spaces are bought by advertisers via a bidding system.
Between the two, there is an Ad Exchange, a kind of “market” that works like an ad stock exchange. This environment provides the space where the purchase is optimized and automated.
Indeed, publishers set minimum bids to determine a starting price for their available ad slots. Advertisers, for their part, also define bidding criteria (maximums, in this case), as well as formats and targeting elements.
The Ad Exchange platform handles, in real time, matching demand with the best offer.
This infographic provided by Ionos clearly explains how programmatic advertising works:
Targeting methods in programmatic advertising
Programmatic advertising operates according to several distinct targeting models that you can use depending on your needs or objectives. Here are the 4 most used methods:
Keyword targeting
As an advertiser, you determine specific terms and keywords used by your prospects and customers, or related to your activity. Thus, when these phrases appear on a website offering dynamic ad slots, your ad will be shown to their audience.
Semantic targeting
If keyword targeting aims at specific terms, semantic (or contextual) targeting takes into account the associated vocabulary. The programmatic algorithm will extend the display of your ads to websites that include synonyms of the specified keywords.
Behavioral targeting
In this targeting method, programmatic advertising is shown to an audience that has taken an action you predefined. For example, you can target visitors to your website, those who interacted with one of your Facebook posts, or those who have visited competing sites/blogs.
Geotargeting
As the name suggests, this model targets audiences based on their location. A relevant strategy if you have branches or local shops. You can reach people likely to visit your establishments.
Programmatic advertising statistics
According to a report by eMarketerAmerican advertisers spent 41.2% more on programmatic advertising in 2021 than in 2020. It was the largest annual increase since 2016. And even if growth is expected to be weaker in 2022 and 2023, it remains significant, with record investments, as this chart shows:
Good to know: among the trends shaping 2022 and 2023 is video. This format will play a dominant role in programmatic advertising. Indeed, according to the same report, video will account for 51.1% of all automated display spending.
About 90% of all video advertising spending will be conducted programmatically by 2025.
And in France? According to the 26th edition of the e-pub Observatory, conducted by SRI and UDECAMprogrammatic advertising is also making strong progress here! It grew by 56% between the first half of 2020 and the first half of 2021. It went from €245 million in revenue (2020) to €382 million in revenue (2021)!
Furthermore, programmatic advertising is increasingly favored by companies, since its share of Display and Social represents 84% (it was 81% in 2020).
And just like in the United States, video is on the rise! In France, programmatic video ad revenues jumped 68%, rising from €140 million in 2020 to €235 million in 2021.
What explains this success?
First and foremost, there are private marketplaces. Also known as Private Deals, they offer highly targeted audiences to advertisers. They are often able to give companies access to niche markets.
These private marketplaces are increasingly appealing to advertisers who see an opportunity to better control their budget and ensure the quality of the audience offered.
Among the most important Private Deals are Lagardère, Boursorama, France Télévisions, TF1 Publicité Digital and Caradisiac.
But that's not all! Programmatic advertising offers other advantages for businesses, which we will review right away.
The top 5 benefits of programmatic advertising
Programmatic advertising provides a number of benefits for your business, as well as advantages over traditional advertising. Let’s examine its five main strengths:
1. Infinite display potential
One of the biggest advantages of programmatic advertising is that, thanks to technology and Artificial Intelligence, you can place your ads across an almost limitless number of media, websites, blogs, and more.
What was previously difficult or even unthinkable! Now, in just a few clicks, an audience made up of millions of qualified internet users opens up to you.
2. Precise targeting
Big Data has enabled the collection of extensive user data. The result: many targeting criteria have emerged, allowing you to launch advertising campaigns to an audience that mirrors your buyer personas down to the smallest detail.
Where traditional advertising offers you a predefined (and sometimes mixed) pool of internet users, programmatic advertising helps you target only your potential customers.
And audience criteria are varied: user type, location, interests, online behavior, previous visits or searches, and so on.
3. Greater optimization capacity
Unlike traditional advertising, where the cost is fixed and unchanging even if traffic varies, programmatic advertising adapts to the market in real time. Advertisers can monitor campaign performance, know the cost per click or conversion, and also view average market prices.
With this information, it’s possible to quickly optimize some ads and abandon others.
4. A more natural display that improves the user experience
Thanks to programmatic advertising, you can virtually personalize every ad so users only receive ads that interest them. This level of personalization significantly reduces ad rejection online and improves the user experience.
And a better experience means a higher chance of conversion.
5. Time and efficiency savings
Programmatic advertising is fully automated. Through a process where you define targeting criteria and bids, the Ad Exchange platform connects various interconnected players without your intervention. Once the basic setup is complete, you have nothing more to do to reach a large qualified audience.
Which saves you a lot of time… and money!
3 tips to optimize your programmatic advertising
Whether you choose an open or private marketplace, there are best practices to optimize your automated campaigns:
Set goals
Programmatic advertising offers so many possibilities that advertisers can easily get lost.
What do you expect from your campaigns: Sales? Awareness? Traffic to your website?
By clearly defining your objectives and the metrics associated with them, you can then take steps to improve your campaigns.
Test multiple platforms
Internally, take the time to study the different options available to you and choose the most suitable solutions and platforms. Select 3–4 marketplaces to start with to analyze the results. You can narrow this number later, or test others.
Focus on the customer
Don't focus on the advantages of programmatic advertising for your business, but ask yourself how to improve theexperience of your customer.
The key to success lies in your ability to capture their interest by delivering added value.
Our tip
Programmatic advertising is ideal for improving your company's visibility and profitability. Thanks to audience qualification, you'll be able to optimize your ROI. Think about it!
If you want help creating your first campaigns, post your ad on Codeur.com !
