What is programmatic advertising?

Programmatic Advertising

Programmatic advertising is the process of buying and selling ad inventory through the process of real time bidding.

Programmatic advertising allows for brands, agencies, and businesses to place impressions through different digital media outlets includIng streaming, connected TV, video, voice, and out-of-home (DOOH). 

The future of advertising has arrived with the help of programmatic advertising. Many agencies have concerned and if not over used the programmatic buying system to make it seem more complicated than it is. The word itself almost sounds problematic for anyone new to digital marketing, but to advertisers… programmatic advertising has become a huge blessing.

Programmatic spending trends 

The world was already moving toward a more digital landscape but due to COVID we’ve seen our entire world change overnight. The advertising industry has become no different. With more consumers staying in doors and social distancing… Marketing agencies like Media Shark have noticed an increase in overall digital spending due to more people being reachable online than ever before. Which would be supported by the graph shown below: 

Brand and small businesses have come to the realization that going digital with their advertising has become a necessity to staying relevant. The increase of programmatic spend from 2019 to the estimated 96.59 billion by 2022 points to the power that programmatic advertising brings. 

Does Programmatic Advertising Matter?

Absolutely. Before programmatic advertising existed everything was done and processed by a human buyer or salesperson. Which cost this type of advertising to be expensive and slow. Efficiency is the name of the game when it comes to programmatic advertising. Programmatic technology uses machine automation to make the ad buying more efficient than the old way of doing things.

What Are The Benefits of Programmatic Advertising?

Due to the process of RTB (Real-Time Bidding) the process of adbuying is completely automated which means it’s faster, less expensive, and much more efficient. Compared to the old way of doing it, programmatic advertising removes RFPs and manual insertions which slow down the process exponentially. It also removes the human element partly as well which allows for less error (to error is human) as they say. Let’s breakdown a few benefits of programmatic advertising:

Consumer Reach

When it comes to placing ads online your available audience reach is extremely important. It’s obvious to point out, but sometimes this is overlooked. Brands and agencies use sites like Facebook because of its audience and reach capabilities. With over 4.6 billion people online everyday it’s crucial that your brand has a presence online. Due to the nature of programmatic ad buying an agency can use machine automation to place in real time a digital ad across many different sites and outlets without specifically reaching out to those sites. 

Audience Targeting

An advertisement is only effective if the right person sees it. With programmatic advertising marketing agencies like Media Shark can use different types of targeting to place highly targeted ads. Some of these targeting capabilities include:

  • Geofencing
  • Purchase Intent
  • Contextual Keyword targeting
  • Specific demographic targeting like age and income
  • IP targeting
  • Many more 

If you’re running an ad campaign you’ll want to get as specific as possible when targeting your online audience. Programmatic advertising gives that ability. 

Transparent Reporting

In our opinion this benefit is one of the most important of them all. The digital marketing landscape has lacked real reporting and transparency for quite some time. With programmatic ad buying you get audience insights, ad details, who’s looking at the ad, and cost breakdowns. You don’t have to rely on Google Analytics or some 3-rd party tool anymore to get the answers you need to grow your campaign effectively. 

Automated Processing

Nothing is worse than relying on someone or something to set-up your campaign incorrectly or not deliver on the process results. Programmatic advertising removes the human element of ad buying and selling due to its automation capabilities. For example, Media Shark focuses on building out your perfect audience then using our extensive networks and digital outlets we programmatically run your campaign with the help of our campaign managers. We never want to set it and forget when it comes to running any campaign and neither do you. Even though programmatic advertising allows for full automation, we still want some human oversight too. 

Is All Ad Buying Programmatic?

Absolutely not. Some agencies and brands still do it the old way. We just prefer the benefits that programmatic brings and so do our clients.

Types of Programmatic Advertising

There are 4 major types of programmatic advertising and each one brings its own benefit and drawbacks. 

Private Marketing Place (PMP)

Just as it sounds programmatic PMP placement is based around a private marketplace. Which means this is an invite-only. Most of the time this means that the ad space is more premium and potentially high quality, but also at a higher cost. Many display networks or DSPs have their own private marketplace.

With programmatic PMP the advertiser can directly calculate the return on investment or ROI with each of their ad placements. They also get the ability to know which websites that their ads are showing up on with this added premium placement. 

Now, this does limit the reach. If a consumer isn’t reachable within a PMP database then neither is your ability to influence that shopper if they leave that network. 

Real Time Bidding (RTB)

Real Time Bidding is the base of the programmatic buying experience. RTB is an open auction or open market place when it comes to running ads programmatically. The ad space inventory is sold and bought on an open exchange to the highest bidder. The advertiser can place ads in real-time, and they can choose the ad space as they’re available.

Due to the nature of RTB it has some great advantages when it comes to running your ads, but again you do lack full transparency since it’s an open exchange and not private. Advertisers do get the ability to pick the category of sites they would like to show ads on, but aren’t shown exact publisher websites on which their ads would be displayed.

Programmatic Guaranteed

This type of programmatic advertising is more similar to the old way of doing things then it is programmatic. Here, the advertiser and publisher come to an agreement on a one-on-one basis vs. the automated deals explained above.  This type of ad buying isn’t automated since the inventory is sold directly to the advertiser based on the negotiated agreement. 

If you want to run programmatic guaranteed then be prepared to come with a heavy wallet because the benefit is you’ll get to know exactly where your ads are being shown. This option is great for brands or agencies who want extremely specific or niche sites to show their ads, but it does come at a much greater cost than the other programmatic buying options.

Preferred Deals

Preferred deals allow an advertiser or brand to see ad inventory before it’s given too a private marketplace. Basically it’s a sneak peak to what’s available. 

Some agencies would also refer to this as spot buying due to the way it’s bought and sold. Both parties agree on pricing and other details beforehand.

The upside to preferred deals is that the advertiser isn’t bound to execute any of these buys. It’s a great way to peak at what’s available but the advertiser can still access this inventory through other outlets if they choose not to purchase through the preferred deal.

Types of Programmatic Advertising Channels 

Just like there are cars on the street, there are many different types of advertising channels when it comes to programmatic advertising. Here at Media Shark we try to use as many channels as possible to help get our clients noticed and engaged with online. Here is a list of different channels you can use when it comes to programmatic advertising:

Display Ads

The most common of all the different types of digital media advertising are display ads. Display ads are commonly seen within the header, sidebar, or footer of a website. 

Display ads can help influence an online shopper to convert or if done correctly, offer a great branding experience when it comes to online influence. 

Native Ads

Native ads bring a unique characteristic to the ad buying world. Unlike display ads, Native ads take on the look and feel of the website they’re being shown on. Some different native ad formats are:

  • In-article ads
  • In-feed ads
  • Paid search units
  • Sponsored content
  • Promoted listings

This is just a small example of different types of native ads, but overall native ads bring a great switch up when it comes to your campaign build out. According to IPG & Share-through consumers looked at native ads 53% more often than display ads.

Video Ads

Digital video ad spend in the US alone is predicted to grow up to $22.1 billion in 2021. Which means it’s working and we’ve personally seen the benefit of programmatic video with our clients here at Media Shark

There are 3 main types of video ads when it comes to programmatic video!

In-stream ads

These ads appear in the video player itself. For example, the video ads that run before you watch your favorite how-to video on YouTube would be considered an in-stream ad. 

Now instream ads breakdown into 3 main categories:

  • Pre-roll: These ads play at the beginning of the video
  • Mid-roll: These ads play in the middle of the video
  • Post-roll: These ads play at the end of each video

 In-display ads

In-display ads aren’t specifically shown in the video but in a search result or a video recommendation

Out-stream ads

Out-stream ads are the video ads that are shown between online articles. Usually placed within content or as a pop-up video. 

Social Ads

Just as it sounds these ads are shown on social platforms. Sites like Facebook have been collecting their own data around consumers for quite some time. These social platforms offer their own power and influence due to the way consumers interact with their sites. 

Just like a display ad seen on a news article within CNN or Fox news, social ads interact with online consumers while they engage with content within that social platform. 

Digital Out-of-Home (DOOR)

Digital Out-of-Home (DOOR) advertising is defined as a marketing channel where a promotional ad or video is dynamically digitally displayed in an outdoor public area or space. A few benefits of DOOR would be:

  • Real-time insights
  • Greater transparency
  • Enhanced targeting capabilities 

Digital Out-of-Home advertising follows the same media buying process as RTB and programmatic direct due to the manual order which takes place.

Audio Ads

As podcasts have grown we’ve seen a massive increase in audio advertising within the programmatic shopping cart. It makes sense that as more people engage with podcasts and streaming devices that advertisers would want to place advertisements there too!

Some of the major programmatic audio players are Google, Pandora, and SoundCloud. 

What is RTB or Real-Time Bidding?

A lot of times RTB marketing and programmatic advertising get thrown together as the same thing or the complete opposite of each other. RTB advertising is the simple opportunity of ads being placed and sold in real-time. Really RTB is the automotive process that is happening during a programmatic buy. 

How does programmatic advertising work?

Check out the example below:

An advertiser connects to a DMP or data management platform. This platform handles the raw data and label data to help place highly targeted ads. You’ll want to make sure your media agency has plenty of connected DMP opportunities as well. 

The Demand Side Platform connects directly to the ad exchanges to place the order or bid for an impression to be shown. As you can see from the top of the image that the publisher would sell it’s space through the ad exchanges or directly to the advertiser. Again, this is all happening in real time during the programmatic buying process. 

The ad exchange will then process through the Supply Side Platform its available inventory space from the publisher. Now at any given time the lowest cost will be auctioned off and the ad position will be sold and filled. Then your targeted audience will see the ad. 

Don’t forget that the publisher knows the type of audience that typically goes to their site, so that’s another important piece to remember as well. 

Depending on the programmatic buying type the advertiser may choose to contact the publisher directly or choose a different type of programmatic buying option. 

Different Types of Data

The ability to run programmatic effectively really depends on the type of data that you’re getting. Behavioral data can be collected in a few different ways:

  1. First-Party Data
  2. Second-Party Data
  3. Third-Party Data

Just as it sounds, first-party data is collected first hand. An example of this would be if a client has their own email list that they’ve gathered and wanted to use that email list to market too.

Read More on Behavioral Targeting

Second-party data is simply first-party data that is owned by a second party but has been given it from the original source who collected it. An example of this would be a publisher who know owns the data from the original source.

Third-party data is the most common form used with programmatic advertising. This is defined as any information collected by an entity that does not have a direct relationship with the user or data that is being collected. 

How is data collected?

Online data is collected in a few ways, but the most commonly used tool is cookies. Cookies help collect legally information such as: 

  1. Who you are
  2. Where you’ve been
  3. Who you’ve researching or shopping
  4. What you’re interested in 

Deleting your cookies after you finish browsing will help slow down the collection of data and information. 

What is Programmatic TV?

Basically it’s programmatic video but more precisely used on a TV or connected device. Programmatic TV allows for advertisers to reach their online audience more accurately through connected TVs like a Samsung smart TV.

For example, businesses can target young parent households with an income of $75K or higher who buy toys for their children. This same advertiser can also run display ads and audio ads to the same audience combined with this digital TV commercial. 

Programmatic TV is used a lot within the Media Shark arsenal due to its targeting capabilities. Traditional commercials have truly become a thing of the past. With the lack of audience understanding, transparency, and reach… Programmatic TV has moved up to be the new tool for video advertising.

Should I Try Programmatic Video?

If you’re already running video or traditional TV, then you absolutely should. We believe in testing everything. Click here to contact a Media Shark manager to get started with programmatic TV!

So many people are cutting the cord when it comes to traditional TV, so why not try the digital route? 

Consumers are cutting the cord to traditional TV every year and that means your shoppers are going digital and so should you!

How Do You Measure Programmatic TV?

Just like any video, we want to see strong visibility with any video ads that we place. We also can see engagement like clicks and watch time, which is another way here at Media Shark we gage how an online video is performing. 

With Media Shark we only use your marketing dollar if the online viewer engages with your video or watches for a specific amount of time. This way your advertisement doesn’t just get wasted but rather we take it a step further and charge off engagement. 

What is VAST?

VAST supplies a standard language that lets ad servers work with different video players with minimal changes. VAST also helps with relaying important information for each video. Some of those details would include 

  • Video running time
  • URL destination for the clicks or landing page

What is VPAID?

VPAID allows for software logic to be incorporated into the output. Basically it allows for videos to account for user interaction in real-time. It also allows for more granular data to be collected surrounding the interaction of a digital video ad. 

Is Programmatic TV the as Connected TV?

CTV or better known as connected TV is a type of programmatic TV. CTV is simply the device type that the video ad would be played on. Such as smart TVs and specific TVs that have internet capabilities. 

How Does CTV Work?

CTV is the conduit to Over-The-Top (OTT) video content. Let’s say you don’t want to run ads to just anyone using a tablet or computer when they’re watching your video, but only to people watching TV. This would be an example why CTV is used vs. running OTT ads which could include CTV as well. 

Connected TV allows for agencies like Media Shark to take advertising to another level. The freedom that digital marketing gives brands and agencies is a key reason why it’s growing at an impeccable rate. 

CTV & OTT advertising gives agencies and brands better ROI, greater transparency with reporting, and much more targeting opportunities as well. 

3 Key Benefits of Connected TV Advertising

1. Connected TV is Everywhere

Walk into Best Buy or shop Amazon for your next TV. We bet you’ll want one with internet capabilities built in or soon maybe that’s the only type of TVs available for sale. Just in 2018 more than 60% of US households owned some type of Connected TV. This has done nothing but grow into a desired product which allows your potential reach and influence go even further with the help of these TVs. 

2. Connected TV Destroys Traditional TV advertising

CTV has created a strong competition between traditional TV advertising and digital. Due to the massive amount of cord cutters that have spiked over the last few years, we’ve seen CTV advertising become the newest desired trend. Also, the lack of reach, reporting, and audience insights that come with traditional TV are removed with CTV advertising. End of the day traditional TV advertising can’t compete with the old way of video ads especially when it comes to the available reach. 

3. More Opportunity with CTV

CTV is a new advertising trend compared to the older digital opportunities like display ads. That being said Connected TV is still evolving, so better targeting and reporting is being updated almost every quarter. Not to mention the different types of ads and video possibilities that come with CTV advertising. 

Types of Programmatic TV

As Programmatic TV evolves so does the streaming capabilities that it presents. Any digital TV inventory can be bought programmatically through different types of options. Here are a few:

Video On Demand (VOD): Streaming sites like Amazon Video or Netflix would be an example of these. This would be considered TV that isn’t live and is streamed through an app or mobile device. 

Digital Linear TV: Streaming TV services would be an example of digital linear TV. Really is a digital streaming TV. 

Terrestrial Linear: This would be considered future developments within the broadcaster technology sector. We really haven’t seen this come into play yet, but rather used as a buzzword

8 Types of Display Ads 

Banner Ads

A banner ad is simply a static banner ad that is a single image file with no audio, animation, or video features. These types of ads are typically your most common of the 8 and are used widely throughout the digital marketing landscape. 

Interactive Ads

Interactive ads provide a cool feature of being able to interact with the audience immediately vs. being static. Such as what you see below:

interactive display ad example

Interactive ads also have the ability to ask users to fill out lead forms. These ads have found some popularity within Facebook and other social media platforms.

Animated Ads

Animated ads are just as they sound… animated. Click the picture below to see what we’re talking about:

Animation movement creates another level of viewing experience for an online consumer. As digital marketing has become more popular, so have these type of ads. Animated ads can also include audio as well to help enhance the absorption of the information. 

Video Ads

Not to be confused with animated ads, video ads focus more within the streaming platforms like YouTube and Netflix. They can also be shown on different social media platforms and also display ad networks as well.

Since Youtube has become the 2nd largest search engine next to Google, it would only make sense that video ads have become a marketers favorite choice for any type of ad. We’ve also seen a higher engagement rate with video ads compared to its counterparts.

Expandable Ads

Expanded ads typically start off in an area called the “invitation state” where they take over a small ad unit on the page.

Google Example

Some marketers have found that these types of ads can cause a negative user experience due to how they disrupt the shopping experience. Some expandable ads can start off when the page loads or expand depending on the users interaction with the site. 

360-Degree Video Ads

One of our favorite ads is 360-Degree video ads. This type of ad allows users to enter what we call a virtual reality environment that invites a targeted audience to play an interactive role with the content. Click here to see what we mean!

You’ll need quite a bit of help when building these due to how specialized these types of ads are, but we personally think it’s worth it!

LightBox Ads

LightBox ads are an expandable ad format that Google introduced in 2012 specifically for the Google Display Network (GDN).

lightbox display ad example

LightBox Ads typically will start off looking like a normal ad, but when you hover over it, it will expand into a full-screen ad that can include video, audio, and other features. To help prevent accidental engagement the lightbox ad must have a user hover their mouse over the ad for at least 2 seconds before the expansion of the ad to take place. 

Interstitial Ads

Interstitial Ads are full screen-ads that will cover the entire face of the host application on a mobile device.

interstitial display ad example

These ads are commonly found on mobile game apps. Due to the nature of these ads, the user may see this ad once they beat a level of a game and load to the next section. Since these ads are related to mobile devices and games, it’s directly attached to the monetization that happens within these mobile application games. 

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