If your business does online advertising, you may already be familiar with programmatic advertising solutions, especially how it has become one of the newest game changers on the digital marketing landscape. But what exactly are programmatic advertising solutions? And why should they be an integral part of your media strategy?
When launching a marketing campaign, you need to make sure your creatives are well-crafted and eye-catching in order to get the most out of your media spend. If they do not capture the attention of the target audience then the campaign will never reach its true potential, even if you appear on all the right websites/apps targeted at the right people.
In this article, we break down what programmatic advertising is, explain best practices and examine brands that are doing it right.
What is programmatic advertising? Programmatic ad buying is the use of algorithmic software to buy and sell online display space, mostly within a real-time auction-based paradigm. This is a sophisticated way to place advertising, as it uses audience traffic data to drive impressions at scale so it is efficient, targeted, and scalable.
Brief History of Programmatic Advertising
In the earliest stages of display advertising, banner ads were put up on publisher websites for an agreed length of time such that it was exposed to all website visitors regardless of who they were. Over time, with the proliferation of the internet, there needed to be a more efficient way to trade online advertising inventory and deliver ads in a more audience-precise manner.
Ad Exchanges and DSPs
Enter the Ad Exchanges, which are basically digital marketplaces that allow publishers to sell and advertisers to buy advertising space in real-time auctions. The methodology is simple: the publisher places their ad inventory up for sale and automatically sells it off in real time to the advertisers. The ad is purchased simultaneously when a profiled visitor loads a website.
To enable such matching, ad exchanges need data to determine which bidders qualify for certain websites and which sites/audiences to reach in order to ensure publishers and advertisers get the most value out of their ads. Demand Side Platforms (DSP) are, in essence, the data ‘warehouse’ for ad exchanges.
A DSP is a tool used by advertisers to connect with ad exchanges to put up their budget and select their target audience profiles.
The DSP ecosystem
An auction occurs when a visitor reaches a website, triggering a signal on the exchange. The ad exchange browses the DSP for an ad relevant to the placement. In response, the DSP steps in for a real-time bidding auction where the advertisers must bid for the slot. One bidder wins the slot, and the ad gets shown to the website visitor.This is the very basis of programmatic display ads from the advertiser’s perspective. By showing ads to the right person at the right time, it strives to create a more targeted and relevant experience, which should translate to higher responses (and sales) for advertisers.
What is Programmatic Targeting and how does DCO come in?
With such advanced audience segmentation available, Dynamic Creative Optimization (DCO) is an important lever to advance the performance of the campaign because of its ability to automate the creative messaging to fit a whole range of audience attributes.
These are the most common ways advertisers use to target their ads and in each of these scenarios there are ways to apply DCO:
Interest Targeting (Audience Targeting)
- Ads can be shown based on topics that users have previously shown interest in, forming multiple affinity groups that can be addressed. For instance, AXA Hong Kong wanted to achieve scale and higher exposure for a medical insurance product. They pitched it at a broad range of audience groups by positioning the product within the context of their interest/affinity topics. They worked with the leading DSP, The Trade Desk, to derive over 10 distinct interest categories for targeting, and then DCO was used to automate the development of an entire range of banners with messaging that catered to every group.
Contextual targeting aims to show ads based on the context of a website. For instance, during the World Cup season, McDonald’s Singapore chose to be seen on football websites and incorporated football-related information to make their messaging more compelling. DCO ads can fetch live data via API such as match scores and integrate them into banner ads for timely, highly relevant ad messaging.
Geo-Targeting (Location-Based Targeting or Geo-Fencing)
- The DCO platform helps you target users based on their location. This lets you show them ads for an outlet near them or a promotion at a nearby store. Geo-targeting helps facilitate your brand’s ability to promote local retail outlets or highlight stock availability at nearby stores.
- Retargeting brings back 98% of visitors who left your site without conversion. Whenever a potential customer visits your site a cookie can be placed on their computer to track his/her browsing behaviour. This information can later be used to target ads to this specific person, increasing the chances of them returning to buy from you. DCO helps to create personalized ads that reflect the items that each individual had last browsed on your website. Displaying relevant products can help encourage users to re-open your site and make a purchase.
As programmatic advertising continues to evolve with new technologies introduced, it is undoubtedly influencing the future of digital advertising and is already being used by major brands worldwide. Adzymic offers a platform with rich media creatives relevant to each user. Leveraging our extensive technology, we offer a fully customized end-to-end service to ensure your brand is presented to the right audience at the right time.