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Understanding programmatic advertising, its significance and use cases

Programmatic advertising refers to the way of buying and selling ad space via automated bidding in real-time. It enables businesses or agencies to buy ad inventories on publisher sites or through apps. This kind of advertising reclines across a diverse range of digital platforms, including display, mobile, video and social. As the traditional advertising model is based on manual processes and involves buyers and sellers as well as time-consuming and expensive, programmatic advertising presents an extensive system and eliminates the need of such manual processes.

Using this advertising process will generate high-quality leads. As programmatic advertising uses a program to purchase ad slots on publishers, the AI-driven algorithms assess users based on their behavior, demographic data, and other criteria in order to determine which ad should be shown to each user.

Why is Programmatic Advertising so Important?

Programmatic advertising introduces data that makes the ad buying and selling processes both automated and programmable using algorithms and software platforms. It allows advertisers and marketers to target a large customer base all across the Internet. This enables advertisers to purchase any inventory available on the Internet at a rational budget. 

Programmatic advertising consists of two kinds of media buying: Real-time bidding (RTB) and Programmatic direct. Real-time bidding is the more popular media buying method in an open marketplace. With real-time bidding, the process of placing an ad involves a publisher, a supply-side platform, a demand-side platform, and an advertiser. On the other side, the programmatic direct media buying method is closer to traditional media buying. This process enables advertisers to purchase a certain number of impressions ahead of time.

One of the major benefits of using programmatic advertising is it measures each ad’s performance in real-time. This means, advertisers no need to wait for an excel sheet from their media agency weeks after the ads go live. This advertising process also allows advertisers to adjust and optimize their ads and test and improve results as well as have clear oversight on their ad spend.

By maximizing the number of digital touchpoints of an average user, advertisers can keep their advertising up. This is where programmatic advertising comes to the rescue, allowing them to reach audiences across devices including mobile, desktop, tablet, and even out-of-home.

Programmatic Advertising Examples

Google: Search engine Google, back in 2014, harnessed the power of programmatic advertising during its Google Search App campaign. The company reached 30 percent more people with three times more frequently, with an approximately 30 percent lower effective cost-per-thousand impressions (CPM). In a programmatic Google Play campaign, search engine giant used first- and third-party data to increase campaign effectiveness through more educated targeting, which helped it focus on the most valuable audience members. The company also saw an increase in brand awareness by 50 percent.

Kellogg’s: As multinational food manufacturing company Kellogg’s wanted to use digital ads to drive offline sales, it started using programmatic marketing. By doing so, the company saw its viewability rates increased by 70-80 percent and accomplished 2 to 3 times better targeting. Using programmatic advertising Kellogg’s maximized the performance of KPIs (key performance indicators) like viewability and frequency. Moreover, unlike other advertisers that only perceive programmatic through a real-time bidding lens, Kellogg’ touches everything from private exchanges to open exchanges.

AirAsia: AirAsia, the Malaysian airline, used programmatic advertising by combining CRM data. The airline company released a series of display and video ads that targeted three specific sets of AirAsia clients, including those who bought an AirAsia ticket previously, but not after the crash in 2014; those who bought a ticket after the incident; and high-value AirAsia regular customers. By doing so, the airline accomplished a 30 times return on ad spend (ROAS), with its own CRM data and with 20 percent of video viewers watching the entire video.