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Digital Marketing 20 min read

A Marketer’s Guide to Programmatic Advertising

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Written by Sarah Edwards

Content Writer @ Galactic Fed

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Expert reviewed by Rachel Meyer

Paid Media Account Director @ Galactic Fed

Published 04 Jan 2024

As a business owner or manager looking to grow their brand, it’s likely that you hear plenty of marketing buzzwords each day, but knowing which trends are actually worth investing in can be a bit tricky to figure out. Part of expanding your brand, especially nowadays, involves embracing automation to save time without sacrificing quality — and that’s where programmatic advertising enters the scene. 

Though it may sound like yet another passing trend, programmatic advertising has, in fact, been steadily gaining popularity over the years, with global programmatic ad spending reaching 558 billion dollars in 2023. It checks all the boxes regarding efficiency and effectiveness, and if you have yet to approach the concept, now is an excellent time to start.

At Galactic Fed, we help businesses like yours get the most out of their marketing. With that said, we invite you to join us as we break down everything you need to know about programmatic advertising and how we can help you use it to its full potential.

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Defining Programmatic Advertising

At its core, programmatic advertising is the process of using algorithmic software to buy and sell digital advertising space. The concept differs from traditional advertising, in which businesses must manually submit requests for proposals, tenders, quotes, and negotiation.

In our widely digital day and age, many systems that once required manual effort are now completely automated, and though that’s an exciting prospect, we understand that it can also be intimidating. To that end, our guide seeks to help you learn more about programmatic advertising and use it to reach your business’s goals more efficiently. 

The Power of Automation and Optimization  

Programmatic advertising uses traffic data and online display targeting to drive impressions. Not only does that lead to a better return on investment (ROI) for marketers, but it also yields exceptional results for a wide range of businesses, both large and small. 

Furthermore, because programmatic ads are automated compared to traditional ads, marketers are thus given more time to focus on optimizing other aspects of their advertising campaigns to drive success. Ultimately, programmatic advertising represents a significant win for those operating in the digital marketing space.

Programmatic Versus Display Ads: Which Are More Effective?

If you’re used to running display ads and want to learn more about the differences between them and programmatic ads, we’re here to help break it down. First and foremost, the term “display” applies to the configuration of how ads appear, while “programmatic” refers to how ads are purchased.

Another difference is the capacity to purchase ads across platforms. You’ll purchase and place display ads within one platform, like the Google Display Network. Alternatively, with programmatic ads, multiple platforms are available, including sell-side and demand-side platforms. Regardless of which type of ad you’re working with, though, you’ll have control over factors such as your budget, audience, and bidding strategy.

Programmatic and Native Ads: What’s the Difference?

Native advertising is similar to programmatic advertising, and though you may have heard both terms in similar settings, it’s crucial that you know the difference between the two. 

Native ads appear as part of the design and flow of the web page they’re on. They have an editorial look, meaning they don’t seem like ads at first glance. Programmatic ads, on the other hand, inhabit a specific, paid-for space, causing them to stand out more in comparison. 

A way to combine the effectiveness of both programmatic and native advertising is programmatic native advertising, which involves the methodical auction of native ads via real-time bidding. 

The Positive Effects of Programmatic Video Advertising

Video continues to be a great medium through which to engage with prospective customers, meaning it should come as no surprise that programmatic video advertising —  the automation of buying and selling video advertising space — is also picking up speed in the digital space alongside standard programmatic ads.

According to Statista, there were over three billion internet users of any age watching video via any device at least once a month in 2020, and that number has only climbed higher with each year since. As such, it’s best to take advantage of the expanding market as soon as possible.

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The Best Platforms to Run Programmatic Ads On

Automated technology is advancing at a near lightning-fast rate, and it’s only going to surge in relevancy with each passing year. With that in mind, it’s vital to know which programmatic ad platforms are best for you to take advantage of. 

These are the three biggest ones:

Sell-Side Platforms (SSPs)

Sell-side platforms include Google Ad Manager, Amazon Publisher Services, and Yahoo Ad Tech, each of which allows publishers to market their ad impressions in real-time.

Demand-Side Platforms (DSPs)

These platforms let marketers purchase ad inventory over multiple platforms simultaneously, including Google’s Display & Video 360, The Trade Desk, and AdRoll, among others.

Ad Exchangers

Ad exchangers allow SSPs to transfer their ad inventories to DSPs, which connect based on the competitiveness their inventory prices fluctuate. Frequently used ad exchangers include Microsoft’s Xandr, Verizon Media, and Open X. 

As a marketer looking to extend your brand’s reach through programmatic advertising, it’s crucial to research and subsequently pick the platforms that best align with your business’s goals. Don’t be afraid to be picky — you want to set your business up for success from the get-go. 

The Benefits of Programmatic Advertising

Even with all of the above details in mind, you may wonder just why programmatic advertising is worth trying out. After all, comprehending a new marketing avenue can be quite an adjustment, and you want to ensure you don’t waste your time and money on something that won’t take your brand to the next level. 

Fortunately, running programmatic ads provides a wealth of benefits for a wide range of businesses. Just some of these benefits are as follows:

Reach

Marketers like you can expect to reach wider audiences and capture more leads through the use of programmatic ads, seeing as you can purchase ad space from any ad inventory available and are thus not as limited as you may be with traditional ads. 

Affordability

As programmatic ads are so effective, you may be inclined to believe that they’re more expensive than traditional ads. Fortunately, programmatic advertising is, in fact, one of the most cost-effective forms of advertising available.

Real-Time Metrics

Getting data on the performance of your ads in real-time is a total game changer. Programmatic ad platforms rely on real-time bidding, allowing you to evaluate performance and pivot your strategy on the spot if necessary, thereby shifting your approach to marketing strategies to one that is proactive instead of reactive.

Cross-Channel Advertising

Once a prospect sees your ad and shows interest, you can remarket to them on other platforms, in turn letting you interact and build strong relationships with leads that turn them into loyal customers. 

Data Segments

You can upload first-party data to target specific users in real-time, and DSPs have third-party segments you can target if you don’t have any first-party data available. Furthermore, you can turn your first-party data into third-party data by creating lookalike audiences of your customers. 

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The Different Types of Programmatic Advertising

There are various types of programmatic advertising to choose from when developing your campaigns. These include the following:

Real-Time Bidding

Ad auctions happen in real-time and are open to all advertisers in a space known as the “open marketplace.”

Preferred Deals

Preferred deals are a lesser-known type of programmatic advertising where advertisers choose ad spots before they go on the private or open market. The term “spot buying” is another name for the concept.

Programmatic Guaranteed

Though similar to a preferred deal, there is no auction bidding involved here. Instead, both the publisher and advertiser determine and agree on a fixed price for ad inventory. 

Private Marketplace

Private marketplace bidding happens when publishers have agreements with a limited number of advertisers; because of the coveted ad space, these websites usually propose premium pricing.

Programmatic Advertising Best Practices

Here are some tips for using programmatic advertising to its full potential and ensuring your brand comes out on top:

Understand Your Marketplace

Anytime you try a new marketing tactic, you want to do as much research into it as possible to set your business up for success. With that said, as you venture into programmatic advertising for the first time, you’ll encounter new terms, ideas, and strategies that you’ll want to take the time to get to know. In doing so, you set yourself up to run your programmatic ads with ease.

Set Realistic Goals

You’re likely to see success with programmatic advertising, but it’s still crucial to set realistic goals from the start. Use any existing data you have to develop both short and long-term objectives. 

Get Personal

Though you are indeed using advanced technology and automation to advertise your brand, you don’t want your audience only to see or hear a robot when interacting with your ads. Incorporate personal touches that show your human side and your desire to build strong relationships with your audience.

Monitor Inappropriate Sites

Since programmatic ads rely on algorithms over manual input, your ads could end up on websites you don’t necessarily want them to. Thankfully, you can avoid such an issue by constantly updating and monitoring your demand-side list for inappropriate sites. You can even find platforms that allow you to exclude entire categories from ad spending.

If you partner with an agency like Galactic Fed, we’ll do what we can to prevent your ads from appearing on low-quality and sensitive websites, in turn allowing you to focus on more important things. 

Keep an Eye Out for Fraud

Unfortunately, fraud is always a concern for marketers, no matter how big or small their business is, as is consumer privacy.

As marketers fixate so intently on reach, they can leave campaigns open to abuse through bots. If a deal looks too good to be true when bidding for ad space, it probably is. By no means is it bad to focus on reach, but you need to ensure that you couple it with traffic quality assurance to avoid generating fake traffic. 

Additionally, you want your ads to comply with privacy regulations, as doing so helps you build trust with your customers and puts you in favor of search engine giants like Google. 

Leverage Data

Once you’ve determined your target audience and segmented them accordingly, you can determine the correct content for your programmatic ads. You can use third-party data to target your ideal audience members based on the following factors:

  • The sites or apps they visit
  • The content they engage with
  • On-site traffic from other similar audiences

Once a lead shows interest, you can use first-party data to help you seal the deal. It’s also helpful to incentivize leads to give you their data for something in return, like a free guide or a discount code. 

Use Multiple Channels

Be aware that your ads will be featured across various devices and channels. In response, you can set marketing attribution models (e.g., last touch, multi-touch, or linear) to measure the performance of your target audiences. When you stay true to your attribution model, you maintain consistency throughout your digital campaigns. 

According to a Harvard Business Review study, omnichannel marketing is extremely effective. Take the time to test each channel you’re interested in advertising on for scale. 

Additionally, you want your programmatic ads to show well on both desktop and mobile. Nearly 67% of the world’s population uses mobile phones to access the internet, so you want to put extra care into your mobile advertising efforts. Ensure your ads pop on the page as well; bright colors garner more attention and engagement over duller hues of gray and brown.

Lastly, voice search advertising, which makes use of digital assistants like Amazon’s Alexa and Apple’s Siri, is also an up-and-coming marketing channel, especially as more users are introduced to these assistants through an ever-expanding lineup of devices.

Monitor Your Progress 

Once you launch your programmatic advertising campaigns, you don’t necessarily want to leave them to their own devices. Monitor the progress of your ads along the way and make tweaks as needed. Since programmatic ads give you results in real-time, you can pause or completely stop underperforming ads while capitalizing on segments that are doing well. 

Optimizing Your Programmatic Ad Campaigns

As mentioned above, you want to continue monitoring, optimizing, and tweaking your campaigns to ensure they provide your brand with the best results. Once you determine the best programmatic ad strategy, you won’t need to tweak your campaigns as often. 

For beginners to the programmatic advertising sphere, it’s crucial to consider the following optimization aspects:

Win Rate

The amount of impressions won from a marketer’s bids is your win rate, a percentage that demonstrates whether your base bids are strong enough to win inventory and whether your campaigns are in need of optimization. 

If you have a healthy win rate but ads are still underperforming, you’ll want to increase audience targeting or add more geolocations. 

Troubleshooting

If you’re running your programmatic ad campaign and just aren’t garnering the results you were hoping for, there are some factors to consider:

Landing Page

Try directing prospects to your home page or any other dedicated landing page to help drive traffic to the right place.

Creatives

You want your messaging to resonate with your target audience, so ensure your content gets your point across effectively and is able to connect with various leads.

Targeting

Test out various targets to see what will give you the ideal results. It can take some trial and error to get things down pat, but you’ll definitely get there. 

Conversion URL

You can provide a conversion URL when you set up your programmatic campaigns in order to track your conversions.

Conversion Tag

Make sure you place and test the conversion tag. When it’s firing properly, it can help you track your conversions alongside the URL.

Campaign Pacing

You want to pace your campaigns appropriately to ensure they’re successful. Examine numbers and factors like your base bid and frequency settings to ensure proper pacing.

If your advertising campaign isn’t bidding strongly enough to earn the impressions you want, you may be pacing under where you need to be. Check your win rate to get insight into where you’re going wrong. 

Overpacing, on the opposite end, is when your pace is at 110% or more. In such a case, you’ll want to decrease your base and max bids so you don’t exceed your advertising budget too quickly. It’s better to spend efficiently and optimize your campaigns before purchasing new ones. 

Aligning With Your Goals

Finally, you want to ensure your programmatic campaigns align with your brand’s goals. Continuously monitor your key performance indicators (KPIs) and optimize them if necessary.

Programmatic Campaign KPIs

On the subject of KPIs, let’s review some of the most significant programmatic campaign KPIs you should monitor as you go along:

Cost-per-Acquisition 

Your cost-per-acquisition (CPA) is the price you desire to pay for a prospect to convert one time. You can improve it in the following ways:

  • Driving lower-funnel conversion actions (retargeting an ad group)
  • Making big adjustments 
  • Segmenting your retargeting audiences in alignment with your ideal customer’s journey

Cost-per-Click

Your cost-per-click (CPC) is the price you desire to pay for a prospect to interact with your brand’s advertisement. Create a list of sites that align with your CPC goals; those not on your list can go on an exclusion list.

Click-Through Rate

A website’s click-through rate (CTR) refers to the interest and engagement of your ideal prospects with your business’s advertisements. You can make a list of websites where your programmatic ads are performing well and a separate list of those that aren’t worth advertising on in the future, then proceed to bid higher on the better-performing sites.

Cost-per-Completed-View

Your cost-per-completed-view (CPCV) refers to how much you must pay to earn a prospect’s full, undivided attention. Again, you should create a list of sites that garner a high CPCV and block those that underperform. 

Reach

Lastly, your reach refers to how popular your ads are. If a wide and expansive reach is your brand’s ultimate goal, you’ll want to do everything you can to spread awareness of your business. Some steps to take include things such as:

  • Enabling multichannel targeting
  • Lowering your frequency cap
  • Involving more targeting (third-party data segments)

Examples of Successful Programmatic Advertising Campaigns

One of the best ways to understand a new type of marketing tactic is to look at successful examples, and with regard to programmatic advertising, there are a couple of big-name success stories:

The Amanda Foundation

The Amanda Foundation is a non-profit animal shelter that successfully applied programmatic advertising, using customized messaging and targeting to reach their target audience.

The foundation’s campaign featured targeted banner ads with images of animals available to be adopted at the time, matching dog breed images with prospects based on their hobbies and characteristics. For example, they would showcase the image of a border collie to a lead that showed interest in running. As a result of the foundation’s efforts, every animal featured in its programmatic ads was adopted. 

IHG Hotels

A common goal for hotels is to get direct bookings through their websites instead of having to pay high commission rates on third-party apps. IHG Hotels improved their number of direct bookings by running successful programmatic ad campaigns.

Third-party hotel websites do a great job convincing users that it’s cheaper to book their stay through them as opposed to directly through the hotel, so in response, IHG Hotels ran a programmatic ad campaign with the to-the-point slogan, “Book with us — it costs less.”

The messaging proved to be extremely effective and won back a lot of traffic the brand had lost to other websites. Additionally, running the ads didn’t take too much time, effort, or resources, so IHG achieved an excellent ROI.

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Maximize Your ROI With Programmatic Advertising

Programmatic advertising can take your marketing efforts to new heights in 2024 and beyond, and because they’re so cost-effective, you have little to lose and plenty of new business to gain. 

When you leverage your data, optimize your campaigns, and partner with a reputable agency like Galactic Fed, there’s no limit to what you can do and accomplish for your business. If you need help establishing your business’s programmatic advertising efforts, let Galactic Fed give you a hand today.

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Sarah Edwards photo

Sarah Edwards

Content Writer @ Galactic Fed