Programmatic Advertising: What the heck is it?

Have you ever heard marketing people talk about “Programmatic Advertising” and wondered what they’re talking about? If you have, you’re not alone. Jargon confuses people and us marketers are some of the worst offenders. Programmatic Advertising doesn’t have to be confusing and if we drop the jargon and explain it in layman’s terms, you’ll probably be pretty excited about it. Because it’s so cool! Programmatic is basically just buying digital ad space automatically, with computers using data to decide which ads to buy and how much to pay for them.

How is this done? Well, the technical answer is really long and boring. So, we’ll go ahead and leave you a link to a more technical article here.

But for the average reader, the best way to explain it is this:

Programmatic ads are placed by computers bidding on ad inventory in real time, based on targeted demographics and prices that advertisers are willing to pay for inventory.

Since computers can analyze millions of data points in seconds, they’re able to bid on ad space that makes the most sense for your brand immediately when the space is available, which allows them to serve millions of ad impressions to qualified users who are more likely to be interested in your ad message, at significantly less cost than you’d pay if you were to buy ads from a publisher directly.

There are a couple ways that we can target the demographics you want to reach.

  • First-party Data- this is your own data on your customers. This can be done by placing a pixel* on your website, importing social media data, or using internal demographic information that you keep about your customers and their psychographics
  • Second-party Data- data collected by someone other than you, who shares that data with you to help structure the programmatic strategy
  • Third-party Data- is available to anyone at a cost. Typically adding between $1 to $2 to the CPM (cost per thousand).

 *Hold up, what’s a pixel?!

A pixel is a piece of tracking code that you add to your website to track users who visit your website. Pixels allow us to gather information about the users’ online behaviors which helps us serve them (or people like them) ads later.

Ok, so that sounds interesting, tell me more…

We’d love to! Programmatic Display advertisers have the power to deliver personalized, always-on, highly relevant digital ads to consumers through Retargeting and Prospecting.

What’s Retargeting? Retargeting is serving ads to users who have visited your website. Ever shop at Nordstrom.com or Homedepot.com and have a pair shoes or a ladder that you looked at follow you for a couple days? That’s Retargeting.  Past site visitors will see ads specifically selected for their interests after they leave your website to read their favorite blog, news site, etc. on their desktop and mobile.

Ok, cool. So, what’s Prospecting? Prospecting uses pixel data (1st party data) or other data (2nd and 3rd party data) to find “Look Alike” users. Look Alike users are users who behave similarly online to your current customers. Identifying these Look Alike users allows us to serve ads to users who are similar to your current customers.

For instance, say I view a pair of shoes on Nordstrom.com. My behavior online may be very similar to another woman like me. So, Nordstrom would serve an ad showing those shoes to my “Look Alike” online. By doing this, it increases the likelihood that these prospected users will be interested in your ads. It helps increase the ROI and engagement by spending your advertising dollars where they can be most effective rather than the old school “shot gun approach” where advertisers would just spray ads all over the web hoping they hit some of their demographic. That old way led to a lot of wasted ad dollars…

In Programmatic Advertising we can use zip code targeting to narrow the ads to the ideal demographic or we can use a Geofence. What’s a Geofence? A Geofence or Geofencing is a location-based digital marketing tool that allows us to send messages to smartphone users in a defined geographic area. This can be done in real time or with historical data. Why is this awesome? Well, if you serve a user an ad for a store they’re physically near or actually shopping in, you’ll have a better chance at converting them into buyers. But even cooler than that, in our opinion, is the use of historical data. Historical data gathered from Geofencing can help sellers of high ticket items sell their products. For instance, a home builder could define a Geofence around their competition. Any user who has visited that competing housing development could be served an ad for your home development! We can go back up to a year! So, we could actually serve ads to all users who have visited the competition in the past 12 months! Amazing, right?! This works well for car dealerships and many other businesses too!

Programmatic Advertising is simple when it’s explained in layman’s terms. It doesn’t have to be complicated. Our job is to translate marketing jargon from confusing to simple and to deliver ROI producing ad campaigns to our clients. There are hundreds of companies who say they offer Programmatic Advertising. Most of them have enormous markups and crappy DSPs*. We’ve found the best DSP available that delivers fantastic results with a huge emphasis on Artificial Intelligence. They invested their research money into the AI not into their sales efforts. Therefore, they deliver a superior product without smoke and mirrors.

*What’s a DSP? A demand-side platform (DSP) is software used to purchase advertising in an automated fashion. DSPs are most often used by advertisers and agencies to help them buy display, video, mobile and search ads.

Want to get started? Give us a call. You can call me personally. I’ll talk you through Programmatic or any other type of advertising you’re interested in. Did you know we’re experts at digital and traditional advertising? It’s a great combination. Being able to understand and recommend the best advertising mix is one of our most valuable assets. There’s lots of agencies who are great at digital and lots who are good at traditional. But finding one that knows both inside and out?! That’s our competitive advantage. We’d love to chat with you! You can email me directly Robin at thriveadvertising dot com.

Robin

seattle media buyer seattle advertising agency media planner programmatic advertising