Blog Post

Programmatic Advertising Explained: A Beginner’s Guide for Brands

August 18, 2020 - Liz Murphy

Placing ads in the best place, at the best price, to the best audience is the crux of digital advertising. Creative and personalized messaging are also critically important. But if your ad never is seen by the intended audience, you can quickly fall into the trap of poor performance. For brands, programmatic advertising has quickly become one of the most efficient solutions to driving performance without the risk of wasted spend. In 2020, programmatic is estimated to make up 69% of all digital media spend, and it’s expected to continue to rise in 2021.

To help you start benefiting from more efficient and better-performing advertising campaigns, you can find programmatic advertising explained in the sections below.

What is programmatic advertising?

Programmatic advertising is the automated buying and selling of digital advertising inventory. 

How does programmatic advertising work?

  1. A visitor lands on a website, and the website owner/publisher communicates with a Supply-Side Partner (SSP) to list ad inventory up for sale.
  2. SSP provides inventory and site visitor information to a Demand Side Partner (DSP) to make ad inventory available for advertisers to bid on. 
  3. Advertisers automatically place bids on ad inventory based on a predetermined budget.
  4. The highest bidder wins the ad
  5. The ad creative is served to the visitor on the website

All in .100 seconds.

 

With programmatic, advertisers and publishers use Demand Side Platforms (DSPs) to buy and sell digital advertising inventory across digital channels like display, social, digital out-of-home (DOOH), Connected TV (CTV), and more. DSPs make it possible for advertisers and publishers to buy and sell digital advertising using automation instead of the traditional process that requires human negotiation and buying impressions in bulk. 

Using a DSP, brands can buy impressions dynamically, on an automated, one-on-one basis. Additionally, DSPs allow for greater transparency – brands can track advertising impressions throughout digital advertising campaigns to generate insights and optimize performance. This saves brands valuable time and money while also providing greater accuracy of ad placements and audience targeting.

Saving time means you need fewer people (often media buyers and sellers) to execute your digital advertising campaigns. While programmatic advertising isn’t 100% automated, it does allow brand marketers to spend less time on execution and more time focused on building smart digital strategies. Some brands do this in-house, while others work with outside partners like media agencies or media partners that are experts in programmatic. 

Early on, programmatic channels were limited to display, social, and video. Today, more and more programmatic channels are emerging: digital out-of-home (DOOH), Connected TV (CTV), podcasts, and more. 

Why are brands turning to programmatic advertising?

1.Better Targeting

Target digital advertising campaigns based on thousands of data points, including interests, contextual, sentiment, behavior, income, location, job title, IP address, app downloads, purchase intent, CRM data, and more. Using robust sets of data to inform audience targeting, brands can serve ads to specific audiences online across all digital channels. With personalized messaging, traditional has not been possible through direct publisher buys. 

2. More Scale

Programmatic advertising allows brands to estimate reach before campaign launch and scale audiences as needed to hit desired reach and conversion goals. To scale target audiences or identify new audiences, brands can use lookalike modeling. With lookalike modeling, brands can model new audiences based on existing customers’ attributes and high intent prospects. This can be done at the start of a campaign or continuously to detect new audiences.

3. Real-Time Optimization

Brands can optimize digital advertising campaigns in real-time and throughout campaigns, which can’t be done with traditional digital ad placements. Because execution and reporting for programmatic ad campaigns are automated, brands can use performance data and insights to inform shifts in media investments towards highest performance audiences and channels.

4. Greater Return-On-Investment (ROI)

Advanced targeting capabilities and access to campaign performance data throughout campaigns help brands eliminate wasted impressions and budget. By quickly identifying poor performing audiences, tactics, or channels, brands can change course without wasting media spend. Similarly, brands can double down on audiences, tactics, and channels, driving the highest ROI.

5. Opportunities to Test and Learn

Access to real-time performance data gives brands the unique opportunity to test new marketing messaging and creative, targeting tactics and channels with lower risk than direct buys. Insights can be applied to campaigns as they are running and future marketing strategies, both online and offline. 

How Digilant is helping brands with programmatic advertising

Because brands have to make media dollars work harder than ever, they have to identify the digital advertising campaign performance drivers and detractors quickly. With the benefits of programmatic advertising explained above, we’ll now get into some real-world examples of brands doing it well.

Johnston & Murphy’s programmatic strategy

Footwear and apparel brand Johnston & Murphy wanted to capture online customer activity to better assess the influence paid media had on in-store purchase behavior. 

To do this, Johnston & Murphy turned to programmatic advertising to close the loop across channels and create a personalized customer journey online and offline. Working with Digilant, Johnston & Murphy onboarded first-party CRM data and matched it with online consumer data to get a complete view of all online and offline customer activity. This expanded view enabled Johnston & Murphy to activate current and future customers 1:1 through programmatic media channels.

The results? A 30% lift in sales for the audience exposed to media through CRM-enabled programmatic. Additionally, Johnston & Murphy has been able to attribute 2X the number of sales to programmatic initiatives with an attribution model that recognizes online and offline purchases.

PopCorners’ programmatic strategy

PopCorners wanted to raise awareness of its snack brand among health-conscious consumers in the US. To do this, PopCorners turned to Digilant to form a programmatic advertising strategy that promoted new PopCorners Flex and PopCorners Flourish products now available at specific grocers. The strategy included the following programmatic tactics:

  • Geo-targeting – to reach consumers in proximity to specific grocers
  • Demographic and Behavioral Targeting – to reach health-conscious adults, healthy snack buyers, and healthy beverage buyers.
  • Channel Optimization – to shift investments to the channels that were the best performing. For PopCorners’, the best performing channels were Facebook and Instagram.

The strategy led to a click-through rate (CTR) that was 7X the previous benchmark and helped PopCorners grow sales by 40%.

To read more programmatic success stories visit our case study library.

Are you ready to start with programmatic advertising?

Now with programmatic advertising explained, do you know how to get started? 

Finding success with programmatic advertising requires that you nail down the fundamentals of programmatic targeting tactics and performance analysis. If you are looking for guidance to get started with in-house programmatic advertising or need an outside team to take the reins, Digilant can help.

Like what you see? Join the 500+ clients that have partnered with Digilant.