How Does Programmatic Advertising Work for Digital Marketers
Did you know that 40% of marketers cite a conversion rate of less than 0.5%? If you want to be a digital marketer that is ahead of the curve, you need to understand different methods of advertising.
Programmatic advertising is a type of digital marketing that can reap great conversion results. The focus of this technique is to target your audience head-on with the correct ad placements.
How does programmatic advertising work? Keep reading to find out.
How Does Programmatic Advertising Work?
Programmatic advertising aims to streamline the online ad buying process using AI, machine learning, and real-time auctions.
But, how does programmatic advertising work exactly? Digital marketers take their advertising budget, campaign goals, and target audience to set purchasing parameters.
Complex algorithms take those parameters to decide where to purchase ad space and on what publisher websites.
Let’s look at a simple example:
If you have an online bookstore and want to increase your conversions, you’d likely target avid readers. A programmatic ad campaign uses this parameter to determine the best ad platforms to reach your goal.
Types of Programmatic Media Buying
To help you further understand programmatic display ads, you need to know the different types of media buying. Businesses choose one or more of these three types to use:
1. Real-Time Bidding (RTB)
Real-time bidding gives digital marketers the chance to compete over advertising space. You’ll be able to access a publisher’s site in real-time.
The auction portion starts within seconds. The highest bidder wins the ad space.
2. Private Marketplace (PMP)
Programmatic advertising platforms offer ad space to select marketers. This means to bid on inventory, you’ll need an invite from the publisher’s website.
This form of programmatic media buying is used by large publisher websites. They choose this method to have control over who advertises on their site.
3. Programmatic Direct
Some publishers choose to sell ad space to marketers at a fixed cost per mile (CPM). This is how publishers forgo the auction process.
With programmatic direct buying, websites will charge marketers based on how many impressions they receive.
Developing a Programmatic Advertising Plan
When you want to indulge in programmatic video advertising, you must integrate it into your current marketing strategy. Without a plan in place, this technique won’t work for your business.
Consider taking the following steps when developing a programmatic advertising plan:
- Set goals for advertising
- Create an advertising budget
- Choose the right ad channels
- Pick a platform for use
Following these steps first requires you to answer questions about your campaign plans.
What do you want to achieve with this form of marketing? How much money do you allocate to your advertising budget? Where is your target audience at?
When you answer these questions, you’ll have the plan you need.
Should You Run a Programmatic Advertising Campaign?
Programmatic advertising is an efficient process that lets you make real-time adjustments and see clear performance metrics.
After answering, “how does programmatic advertising work?”, you know that it could lead to better ad placements and more conversions for your business.
To run a successful programmatic advertising campaign, you need to create a plan to implement the technique into your current digital marketing strategy.
For more business marketing guides like this, check out the other posts on our blog.
