Programmatic marketing has widely been tipped at the future of digital advertising. Forrester believes programmatic advertising will account for the majority of all digital advertising spending by 2019. So what is programmatic marketing, what are its benefits, and what do you need to consider?
What is programmatic marketing?
Programmatic marketing is essentially automated bidding on digital advertising space in real time. When a user clicks on a web page that has ad space that is configured for programmatic advertising, the publisher puts an ad impression up for auction in an ad marketplace. Bidding therefore starts immediately on this advertising inventory. The marketplace runs the auction amongst advertisers interested in displaying their advert to the specific customer that clicked. Whichever advertiser wins this bidding process has their ad displayed.
This sounds like a long and lengthy process, however, it is carried through in real time: a matter of milliseconds. The bidding situation is automated with the maximum price of bidding pre-programmed.
Programmatic technology uses customer data to identify the behaviours and demographics of a particular user. This data determines which ads to buy and how much to pay for them in the digital advertising space. The technology examines vast amounts of data to instantly identify visitors that match your audience’s demographic causing an algorithmic purchase and sale of advertising space.
Benefits of programmatic marketing
The focus of programmatic marketing is to drive efficiencies in both spend and resource. The biggest benefit of this style of digital marketing is the opportunity to display an ad to a specific customer in a specific context. The digital experience for both the advertiser and end user are greatly improved.
Digital media spending is reduced as advertisers only pay for relevant impressions. Advertisers are essentially paying for highly effective ads to be delivered to the right people, at the right time. The level of targeting is incredibly improved with higher quality of leads generated. There is more flexibility in comparison to manual acquisition as there are set rules by the advertiser including minimum number of impressions, minimum budget, and the user identity.
For the end user, they only see adverts that are relevant to them. This increases their ability to convert. The auctioning process happens whilst the page is loading, therefore, there is no lagging or waiting time for the user. This style of digital marketing targeting allow for amplified personalised marketing, which is becoming increasingly more important to improve the customer experience by building a relationship of trust and loyalty.
Things to consider
There are always things to consider with marketing trends to ensure that it is successful. As programmatic marketing relies on an automatic bidding process, you have to carefully consider how much you’re willing to spend. If you calculate the projected ROI goals you have, you can use your monetary resources in the best possible way.
Data is the foundation of programmatic marketing. You need substantial customer data to make this form of digital media advertising work. The more data you have available, the better understanding of the users, therefore the probability of success is higher. By using existing customer data, you can gain a better understanding of what your audience engages with. This will give you greater confidence with the campaign and also reduce any waste in spending.
With any digital advertising, being compatible is a necessity. Nearly half of all internet users are on mobile and mobile marketing is rising. Your ad will have reduced effectiveness if it is featured on a non-desktop device and isn’t optimised. All advertising needs to be compatible with all screen sizes and devices.
Why choose programmatic marketing?
The IAB estimates that by 2018, programmatic spend will account for over 80% of all marketing spend. Programmatic marketing allows you to cut through the noise of a saturated marketplace by being useful and top of mind to your audience. It simultaneously taps into two key desires of advertisers: wide distribution and targeted advertising.