If you’re a marketing agency or a business that has your finger on the pulse of advertising trends and innovations, you may have heard of programmatic advertising. But what is it, and what are the benefits and challenges of using programmatic advertising to market your business or your clients’ businesses? Let’s talk about it.
Programmatic advertising is the use of automated technology – think machine learning, workflow automation, and other algorithmic tools - to buy and sell digital ads. “Programmatic” refers to how the ad space is bought; it differs from traditional media buying because the process is automated, using certain user signals (like shopping patterns) to determine when and where ads should serve. Put another way, programmatic advertising replaces human negotiations with publishers, instead using machine learning and automation to make split-second decisions about when and where an ad will be placed.
Programmatic advertising generally allows for greater efficiency, especially when it comes to costs. This is because ads are ideally being served to more relevant audiences, thus ensuring your money is being spent in a productive way.
Programmatic ads can be shown across devices, and can use a variety of user signals to determine the time and location of their placement, which allows them to extend their reach.
Finally, this type of advertising allows for real-time optimization to drive the results you’re after.
Of course, with any good thing, there can be drawbacks. In this case, there’s a bit of a learning curve with programmatic advertising. Luckily, the platform you’ll be using to advertise (such as Amazon Ads) will usually have some sort of tutorial or other resource to help you learn the ins and outs of programmatic advertising.
There are a few terms you’ll need to understand as you begin using programmatic advertising.
Publishers are owners of websites or apps with ad space (or inventory) to sell. Advertisers buy ad space from publishers to promote their brand or product.
Programmatic advertising uses real-time bidding (RTB). Basically, when it’s time to bid on a potential impression, a real-time auction is conducted, and the winning ad is immediately displayed on the website or app that the user is visiting. This is considered a more streamlined and targeted bidding process.
An ad exchange is a highly-automated digital marketplace where advertisers, publishers, and more can bid on advertising inventory from various publishers. This is distinct from advertising networks, which first buy the inventory from publishers and then sell it to advertisers.
Finally, let’s differentiate between SSPs and DSPs. A supply-side platform (SSP) is software used by publishers to facilitate sales of their advertising inventory. A demand-side platform (DSP) allows advertisers to buy ad space from multiple publishers.
We think it’s best to illustrate the process of programmatic advertising through an example.
Let’s say you’re a business looking to increase brand awareness, so you reach out to an ad agency to represent you. The agency uses a DSP to automate the process of buying ad space.
When a user clicks on a website, information about that user is sent to an ad exchange or SSP, which also shows available inventory on the website. The DSP sees this and determines whether the user is someone the agency wants to target. A bid is produced, which goes into the auction, and if the auction is won, the ad will be served to the user! This entire process happens almost instantaneously.
There are lots of different options, but Amazon DSP is a great place to start, as it allows advertisers to programmatically buy “display, video, audio, and in-app ads both on and off Amazon”. With Amazon DSP, you can gain a lot of insights about Amazon shoppers that will help you optimize your ads, and you can advertise on Amazon’s FireTV, Twitch, and more!
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Ready to get started with programmatic advertising? If you want help learning the ropes, reach out to our agency! Relevance Advisors offers Display Advertising services, and we can help you achieve your business goals today.
