What is programmatic advertising
Programmatic advertising is a digital advertising buying model that allows the purchase of a series of advertising spaces in an automated way. Most notably, it connects the advertiser directly with the target audience, at the right time and place. Advertisers pay to have their ads shown to their target audience. You don't buy media space, you buy audiences that track behavioural analytics.
With this type of advertising campaign, a higher conversion rate per click is achieved, because the traffic is of higher quality.
In order to understand programmatic buying and how it works, it is important to know that there are different agents (advertisers, adserver*, platforms and media) that act as intermediaries between advertisers and audiences. This makes the execution process more agile.
Some of these are listed below:
- Demand Side Platforms (DSP): allow the purchase of advertising space through an ad exchange.
- SSP (Sell Side Platform): allow publishers to manage advertising space and offer it to interested parties (advertisers and sellers).
- Data Management Platforms (DMPs): allow the collection and management of user data for online marketing purposes.
- Ad Exchange (AdX): where DSPs and SSPs come together to buy and sell ads (auctions).
- Trading Desk: they work for the advertiser in auctions.
Advantages of programmatic advertising
Knowing how programmatic advertising works is crucial when designing a digital marketing strategy. Currently, it is the most widely used method of buying and selling advertising space in the digital environment, because it is the most effective way to reach your target audience and thus recover a large part of your investment.
Programmatic advertising offers advantages over traditional online advertising. The biggest of these is the ability to analyse audience behaviour. Here are the other benefits:
Segmentation and personalisation
To begin with, we will define the Buyer persona we want to target in order to meet their needs with our products or services. This way the ads will be more relevant to the user.
By analysing audience behaviour, we will get to know what characteristics our users have and what type of online purchases they make. We take into account the interests of users, their tastes, their preferred times for browsing and the devices they use to connect, as well as their age, gender, social status and location. This allows us to carry out a more exhaustive segmentation in order to better reach our target audience. With Inbound Marketing, valuable content is created for a specific type of user.
It also allows us to be more precise when creating campaigns. We can create personalised ads that offer a product or service at the moment the user is looking for it.
Automation and agility
The automation of programmatic advertising allows greater agility in the buying process, because relevant and related ads are shown to the user while browsing. This leads to more user interaction and thus improves the click-through rate.
With this type of advertising we can reach anywhere in the world, with ads on various ad networks, channels and geographic locations.
Real-time measurement and optimisation
With programmatic advertising we obtain a lot of data from users. Thanks to this data we can know if the campaign is working, we can adjust and optimise it. These changes can be made in real time; the reaction time is immediate. This allows for greater control of the advertising and constant optimisation.
The goal of programmatic advertising is to maximise the effectiveness of the campaign, even if this means showing the ad to a smaller group of users. Even so, the advertiser knows that the ad will be shown to an audience interested in their product or service, which will increase the purchase conversion rate.
* Ad server. Programme that allows you to manage the advertisements in the advertising spaces of the different websites, search engines, RRSS and Apps.