What is Programmatic Marketing and Why Do I Need It?
By Ben | Feb 7, 2023 (5 min read)
We’ve all heard the term “Programmatic Marketing” thrown around in the digital marketing space. It’s become an all-encompassing term since its inception in the early 2010s. Since programmatic has entered the digital space, its capabilities have grown to meet the demand for data-driven marketing. While traditional media allows for vast reach in specific points of a marketing journey, it requires more planning up front and larger budgets with additional negotiations.
Programmatic Marketing allows advertisers to introduce media more quickly to the market at less expensive CPM rates. This lowers media costs and allows advertisers to evaluate performance in real-time.
At Brandastic, we recently added Programmatic Marketing to our list of services, meaning it’s the perfect time for a deep-dive on all things programmatic and how it can help shape your advertising strategy.
What is it?
We’re going back to basics for a sec. Top level, Programmatic Marketing refers to the use of an automated bidding system that facilitates the buying and selling of digital advertising. This bidding system allows programmatic advertisers to control how much they’re paying for media and track results based on their optimizations.
While programmatic started out with the most basic media types such as display, this method of purchasing ads has greatly expanded to different types of media that you can buy via automated bidding. Banner ads on the internet, YouTube, Connected TV’s (CTV), Out-of-Home advertising (OOH) – you name it and it can be bought via Programmatic Marketing platforms. This bidding system only scratches the surface of what can be done with Programmatic Marketing overall.
A Deeper Dive
It’s easiest to think about programmatic campaigns as a story with a beginning, middle, and end. Programmatic Marketing campaigns begin with initial setup in the DSPs (Demand Side Platforms). DSPs communicate with SSPs (Supply Side Platforms) via an ad exchange. SSPs notify the DSPs about available inventory that they’re selling based on the parameters outlined in DSP campaign setup. All these acronyms just to say that DSPs are for buying and SSPs are for selling.
It’s kind of like buying Taylor Swift tickets on Ticketmaster, except Taylor is the seller, you’re the buyer, and Ticketmaster is facilitating the transaction – if you’re able to get tickets, even better. A few examples of some of the largest DSPs out there today are Hulu, Spotify, The New York Times, and CNN.
Campaign setup is straightforward in the DSP. Once budgets and flight dates are inputted along with any additional audience and performance rails, these campaigns are ready for launch. After a programmatic campaign starts spending, traders are able to access the DSP platform and make optimizations based on the campaign’s KPI goal.
This is where programmatic advertising gets interesting, as traders are able to customize bids and budgets against specific audiences, increase or decrease frequency, and modify other parameters that affect campaign performance. Programmatic reporting allows for advertisers to do a deep dive and track performance down to the last dollar.
Let’s back up for a minute and talk about optimizations. A key differentiator between programmatic and other types of media is that advertisers are able to adjust campaigns in real-time. Traders pull levers in the DSP that then signal the algorithms to align campaign performance closer to the KPI goal. This is especially helpful when refreshing audiences or when working with publisher partners and evaluating performance.
Cost Effective Potential via Real-Time Bidding
We’ve discussed that programmatic’s biggest claim to fame is the use of real-time-bidding, making it an effective alternative or complement to traditional media tactics. Real-time bidding is the process where advertisers manipulate the CPM bid to win on an impression that reaches the right person at the right time.
Buying traditional media allows for great reach and effective messaging, but while those campaigns are in flight there isn’t a lot of room for optimizations. What makes programmatic so cost-effective is the ability to optimize in real-time via the DSP bidding system.
Advertisers are able to adjust CPM bids and target specific audience segments so that no media dollar is wasted. Traders can react to the performance data and make budget shifts between campaigns and DSPs accordingly. This leads to better results at a cost-effective CPM price – the control is in your hands and not at the mercy of the market.
Growing Your Business
There’s a ton of ways to grow your business using Programmatic Marketing no matter what your business goals are. Programmatic is great to use in tandem with traditional media because you can retarget people who have seen the traditional media ad to add another touchpoint in their consumer journey. If you have existing assets for CTV or social, you can repurpose them to create brand recognition between media types.
The biggest asset of programmatic is performance tracking – with the use of first party data and pixels, you can use programmatic campaigns to directly track ROAS to see how effective your ad dollars are at driving a specific action.
Other Cool Programmatic Considerations
- Data Privacy and Security
- Data providers use secure methods for storing and collecting data on the consumer end
- Data partners like DoubleVerify and IAS provide additional security against issues like fraud and brand safety
- Access to Audiences and Data
- Advertisers can choose specific audience segments from any data provider they want, meaning you can vet data segments in advance to ensure they align with your target audience
- Advertisers have access to audience data from walled gardens like Google
- Programmatic Marketing DSPs give advertisers full access to reporting in real-time, making it easy to perform A/B tests, make optimizations, and shift media dollars
- Accessing website reports is a unique way to learn where your consumers are visiting online
Programmatic Marketing is an essential tool for any advertiser in today’s landscape. It is the most effective way to reach specific audiences while spending efficiently across all different media types, and it’s a great way to take advantage of data-driven measurement and results to ensure your media plan is reaching the right people.
If you are interested in learning more about this new service, please reach out and contact Brandastic.