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The digital marketing industry is constantly evolving, and programmatic advertising and display campaigns have become essential tools for businesses to reach their target audiences effectively. Programmatic ads automate the buying and selling of digital advertising inventory, while display ads offer a visually appealing and cost-effective means of advertising.
In this definitive guide to programmatic PPC and display ads, we will explore the benefits of programmatic advertising and its role in improving campaign performance, ROI, ad relevance, and transparency.
We will also delve into the technicalities of programmatic advertising, including the tools and platforms used in this field and the issues faced by the programmatic advertising industry.
Programmatic advertising is a method of digital advertising that uses automated algorithms to buy and sell ad inventory. It allows advertisers to target specific audiences, and it can be used for a variety of different ad formats, including display ads, video ads, and native ads. Programmatic advertising is often associated with real-time bidding (RTB), which is a process of buying and selling ad impressions on an ad exchange in real-time.
Unlike traditional advertising, programmatic advertising uses algorithms to analyze data and target specific users, rather than relying on manual processes such as negotiating deals with publishers or buying ad space based on demographics.
The following are the steps involved in programmatic advertising:
Data Collection: Collecting data on target audiences such as their preferences, behaviors, and socioeconomic status.
Real-time Bidding: The programmatic system sends a bid request to an ad exchange with the targeting criteria, and the highest bidder places an immediate ad.
Ad Serving: Once the bid is won, the ad is served to the user.
Analysis: The programmatic system tracks the ad's performance and uses that data to optimize future ad placements.
This advertising method is highly effective as it allows advertisers to reach their target audiences in a highly efficient manner, increasing their ROI.
Display ads are a type of digital advertising that uses visual elements, such as images, graphics, and videos, to promote a product or service. Mobile apps, social media platforms, and websites use them for a variety of marketing objectives, such as brand awareness, lead generation, and sales.
Display ads are highly effective at reaching a broad audience as they can be targeted based on demographics, consumer habits, and hobbies. They are also highly cost-effective as they can be purchased at cost-per-click or cost-per-impression.
It is possible to manage display campaigns using a programmatic platform. This automates the ad-buying process, optimizes ad placements in real-time, and tracks the performance of the ads.
Unlike display advertising, which uses visual elements to promote a product or service, programmatic advertising is a process that uses algorithms to buy and sell ad inventory. Here are some ways programmatic advertising differs from traditional display campaigns:
Programmatic advertising allows advertisers to reach a larger audience than traditional display campaigns. This is because programmatic advertising uses data to identify individuals based on their actions, interests, and characteristics, while display ads usually rely on contextual targeting.
Programmatic advertising provides more detailed reporting than traditional display campaigns. In this way, programmatic advertising monitors real-time user behavior, allowing advertisers to optimize their campaigns for better performance.
Did you know that programmatic ads now make up 72% of all digital display advertising spend? Programmatic advertising can be highly effective when used correctly. Here are some of the factors that contribute to its success:
Programmatic advertising allows advertisers to optimize their budgets in real-time. This is because programmatic advertising tracks user behavior in real-time, allowing advertisers to adjust their bids and targeting for better performance.
Programmatic advertising allows advertisers to reach a larger audience than traditional display campaigns. This is because programmatic advertising uses data to target specific users based on their behavior, interests, and demographics, whereas traditional display campaigns rely on contextual targeting.
Programmatic advertising provides real-time data and analysis, allowing advertisers to make quick decisions and optimize their campaigns for better performance.
Programmatic advertising allows advertisers to reach users across multiple devices, such as desktops, mobile phones, and tablets. This is important because users often switch between devices throughout the day.
While algorithms are an important part of programmatic advertising, advertisers should not rely on them alone. It's important to have a human touch and to use data to inform decisions rather than relying on algorithms entirely. This means that advertisers should still use their own insights and expertise to make decisions about their campaigns.
Programmatic advertising platforms and tools are essential for advertisers to execute their programmatic ad campaigns. The programmatic advertising ecosystem is made up of a complex network of advertisers, publishers, ad exchanges, and technology providers.
Here's a basic overview of how the ecosystem works:
A demand-side platform (DSP) is software used by advertisers to purchase and manage programmatic ad campaigns. It provides features such as targeting, bidding, and reporting.
A data management platform (DMP) enables marketers to gather and organize data about their audiences. It helps advertisers understand their audience and develop better targeting strategies.
A supply-side platform (SSP) provides publishers with the ability to sell their ad inventory in real-time. It provides features such as ad serving and reporting.
In 2022, programmatic advertising was expected to account for 84% of spending on digital advertising globally. By 2026, that share is projected to rise to 87%. There is a reason for this technique's popularity and that reason lies in its very nature. Here's a basic overview of how the process works:
While programmatic advertising has many benefits, there are also some issues that need to be addressed.
Ad fraud is a major problem in programmatic advertising, with some estimates suggesting that up to 50% of programmatic ad impressions may be fraudulent. It happens when bad actors use various methods to generate clicks or views of ads that are not legitimate.
Ad fraud can happen in a variety of ways, including bots, click farms, and ad stacking. The issue with ad fraud is that it wastes the ad budget and provides no real value to the advertiser.
To combat ad fraud, ad verification companies and fraud detection tools will prove useful. They’re equipped with technologies to analyze data and detect fraudulent activity, allowing advertisers to avoid wasting their budgets on fraudulent clicks or views.
Did you know that at least 40% of the global population uses ad blockers to protect their privacy? Ad blockers prevent ads from being displayed on web pages, which can adversely affect programmatic advertising. Advertisers need to find ways to create ads that people want to see, so they do not feel the need to block them.
Ad blocking can be countered by using less intrusive ad formats, such as native ads. By blending in with the content of the page, users are less likely to be annoyed by these ads. And as mentioned above, improving the quality of the ads themselves also helps. Ads that are well-designed and provide value for the user are less likely to be blocked.
Privacy concerns are becoming more important in programmatic advertising. Consumers are becoming increasingly aware of how their data is being used, and they want more control over their privacy. Advertisers need to be transparent about how they use consumer data, and they need to give consumers the ability to opt out of data collection.
The European Union's General Data Protection Regulation (GDPR) has had a significant impact on programmatic advertising. The GDPR requires companies to obtain explicit consent from consumers before collecting their personal information. These regulations need to be understood by advertisers and adhered to.
Advertisers need to ensure that their ads are not displayed on websites that are offensive or harmful to their brand image. For example, a company that sells vegetarian food may not want its ads displayed on a website devoted to hunting.
To combat brand safety issues, advertisers employ software that monitors the content of the web pages where their ads are displayed. They can also use third-party verification services to ensure that their ads are not displayed on sites that harm their company's reputation.
Viewability is another issue in programmatic advertising. It refers to whether or not an ad is actually seen by a user. The problem is that ads can be placed on parts of the web page that are not visible to the user, or they can be loaded but not displayed.
To address viewability challenges, marketers use viewability measurement tools, such as the Media Rating Council's (MRC) viewability standards. Advertisers can use these tools to ensure their ads reach users.
Programmatic advertising offers several benefits to advertisers, including more precise targeting, real-time optimization, cost efficiency, and large-scale reach. Of course, that only applies to businesses that choose their digital advertising vendor or partner wisely.
JM&Co., for instance, has experts who specialize in creating and executing data-driven advertising campaigns that deliver real results, including increased website traffic, improved engagement rates, and higher conversion rates.
In the following section, we'll take a more detailed look at each of these benefits.
One of the biggest benefits of programmatic advertising is real-time optimization. Traditional advertising campaigns typically require a lot of planning and upfront investment before results are realized. With programmatic advertising, however, data about user activity and engagement can be analyzed instantly and campaigns can be optimized accordingly.
According to a recent Forrester survey, 65% of marketing professionals are worried about data quality when developing real-time strategies. When measuring that data, 71% find it difficult to establish a cohesive approach.
With real-time optimization, advertisers are able to modify their campaigns on the fly, altering bidding strategies, targeting, and ad creativity as needed. This will result in more effective campaigns, as advertisers can quickly identify what is working and what is not, and adjust their strategies accordingly.
Real-time optimization also enhances the efficiency of advertising budgets. Advertisers can quickly identify underperforming ad placements and adjust their bids or targeting to avoid wasting money on ineffective placements. This can result in higher ROI and more effective use of advertising budgets overall.
Programmatic advertising can be more economical than conventional campaigns in a number of ways. For one, programmatic advertising allows advertisers to pinpoint their target audience more effectively, which can result in higher engagement rates and more efficient use of advertising budgets.
Additionally, programmatic advertising can be cheaper than traditional advertising campaigns in terms of both time and resources. Traditional advertising campaigns often require a lot of planning and upfront investment, including negotiating ad buys, preparing creatives, and coordinating with publishers. Programmatic advertising, on the other hand, operates quickly and efficiently, with technology platforms handling most of the heavy lifting.
Finally, programmatic advertising can be more cost-efficient in ad buying. Programmatic ad buying is typically done through real-time bidding (RTB), where advertisers can bid on ad impressions right away. This means that advertisers only pay for impressions they actually win, not for a set number of placements in advance.
Several programmatic advertising features can enhance campaign results. For one, programmatic advertising allows for better targeting according to consumer behavior and profile. As a result, engagement rates can be higher and advertising budgets can be better utilized.
Finally, programmatic advertising allows for better ad relevance, as advertisers can use data to tailor ad content and messaging for specific audiences. The result can be a higher engagement rate and a better performance of the campaign as a whole.
Traditional advertising campaigns may not offer a better return on investment (ROI) than programmatic advertising. Programmatic advertising also allows for more transparent reporting, which can help marketers improve campaign performance in order to optimize their budgets for greater return on investment.
Finally, programmatic advertising provides increased transparency over other old-fashioned advertising methods. Programmatic platforms provide marketers with real-time insights into campaign performance, enabling them to adjust their strategies accordingly. This data-driven approach to advertising ensures marketers have more control over their ad spend as well as the ability to optimize their campaigns.
Programmatic advertising also provides more transparency in ad placement, ensuring that marketers have greater control over where their ads are displayed. This transparency helps to prevent ad fraud and ensures that marketers only pay for ad impressions that are displayed to real users.
Programmatic advertising provides several benefits not available through conventional advertising methods. Real-time optimization, cost efficiency, improved campaign performance, better ROI, improved ad relevance, and increased transparency are just a few of the benefits that programmatic advertising offers.
Programmatic advertising is a rapidly growing industry that offers advertisers many benefits. While there are some issues that need to be addressed, the benefits of programmatic advertising make it one of the most effective tactics for digital marketers. By using the right platforms and tools and staying up-to-date on industry trends, advertisers can create effective dynamic ad campaigns that reach the right audience at the right time.
At JM&Co, we understand the importance of staying ahead of the curve in the fast-paced world of digital advertising. That's why we utilize the latest programmatic advertising technologies and tools to ensure your campaigns deliver results. But it's not just about technology – our team also brings a human touch to our work.
Let’s talk: as part of our process, we take the time to understand your business objectives and target audience so that we can develop a customized strategy to meet your needs.
The art is building the right growth campaign. The science is in the results.