Digital ads are a kind of online advertisement where products and services appear as static images, texts that are relevant to and embedded in surrounding content, banners that float above the web content, popups, flashing ads and videos. Industry statistics state that upward of 50 percent of all display ads are placed as programmatic ads. That means we are increasingly favoring algorithms that have automated ad sales and buys.
Marketers were increasingly bothered by the fact that conventional forms of advertising were becoming prohibitively expensive and cumbersome to handle and delivered very low ROI. Worryingly, these ads were not reaching the intended audience. To add to the marketer’s woes, customers were changing preferences fast. There was a 30 percent increase in the use of ad blockers, and as more people preferred to access the internet through handheld devices, live video feeds gained popularity.
All this led B2B marketers to search frantically for alternative cost-effective and efficient advertising models. This spawned a new era where advertising became increasingly automated through software embedded with intelligent machine learning algorithms. Programmatic advertising found new followers and the trend marked a paradigm shift away from conventional manual advertising to automated advertising.
Very basically, programmatic advertising is handled by software that uses artificial intelligence (AI) and real-time bidding (RTB) to completely automate ad buying, ad placement, and the demographic (audience) targeting process.
The advertising company feeds the software with demographic parameters such as the age, gender, location, and marital status, and adds on psychographic traits such as activity, opinion, attitudes, and interests to present a comprehensive overview of a targeted audience that is assumed to be most receptive to company products and services.
In the programmatic advertising agency War Room, you skillfully merge human creativity and advertising expertise with powerful, and scalable algorithms that could do the number crunching and web searches that identify the target audience within an optimized budget.
The algorithm takes over, covering online displays, social media, mobile, and video campaigning to spread the message the company wants to convey within the advertising budget that is earmarked for this purpose.
If programmatic advertising is gaining in popularity and there is a massive shift favoring this model of advertising, the least you can do before attempting the change yourself is to know the pros and cons of the programmatic advertising spend.
Frankly speaking, there is an air of mystery and magic surrounding sentient machine algorithms, and many are ignorant or plain wary of this technology. But if you can set aside any discomforting thoughts, we’ll give you four fabulous reasons why your ad campaign gains from programmatic advertising:
You are dealing with a population numbering in millions, a country that has thousands of zip codes, and then there are a considerable number of commercial websites, discussion forums, and social media platforms. Human online interaction and business transactions generate massive amounts of data that would take humans the better part of a decade to scientifically track and analyze.
AI-powered algorithms can do this kind of massive data lifting. It has the capability of analyzing and recalling patterns of behavior. It can make sense out of anything that is chaotic. AI can do things that would be beyond the scope of human sensibilities.
Programmatic advertising uses smart algorithms to decide the most opportunistic places to show ad displays, leaving marketers free to design, and optimize ads and focus their efforts on winning audiences.
Ask any industrial marketer about his worst nightmare, and he’ll probably tell you it is the conventional ad bidding process. Staying on the right side of keyword search is itself a huge task especially when customer preferences change as swiftly as the seasons and industries. The time, the resources, and the ad spend on manual processes involves enormous wastage. In programmatic advertising, your time, company resources, energy, and money are saved substantially.
The algorithm works within the budget allocated and approves purchases based on real-time bidding. As the communication is from device to device, there are fewer headaches for the marketer. The software keeps the company updated on spending and even pinpoints areas where spending can be reduced. Most important, the ad is displayed where it matters to the company.
Perhaps the most remarkable feature of programmatic marketing is its unwavering focus on the audience that really deserves to be shown your ads. Mobile app platforms have honed their skills in attracting users that are most likely to respond to their apps.
So we have a scenario where focused and targeted users climb the bandwagon, creating a profile and straightaway pay for premium services or make within-the-app purchases without bothering to download the app itself. This makes programmatic marketing a smarter, shrewder mobile marketing strategy that brings in more business.
Fake websites and bot traffic that lured away and improperly placed ads inflicted $16 billion in advertising losses to the display ads industry. But the same losses are lower in programmatic advertising because there has been a conscious effort to detect and discard fraudulent clicking patterns. One solution that programmatic deploys to good effect is to narrow the list down to a demographic that is most likely to click and convert to sales. Most suspect sites are blacklisted.
Given the massive prevalence of fraudulent traffic in display advertising, programmatic advertising continues to offer the safest and customizable ad buying options that won’t impact your bottom-line negatively.
We have yet to see a marketing strategy or tool that is like perfection etched in marble. We need to take the negatives also in our stride as we rush down the highway to progress and profits. These are the negatives of programmatic advertising:
The specificity with which programmatic advertising focuses on its targeted audience is at once a remarkable achievement, and also a drawback when you consider the dollar spend that drains you. You are guaranteed a gateway to high-end users that are most likely to convert to your sales pitch, but that kind of business comes at a higher cost.
The higher degree of specification required for laser targeting does not come cheap. Displaying the ad exactly as you want your audience to see it down to the very minutest detail can become a costly process. That’s the price you pay for algorithmic efficiency. In a long-term viewpoint, that’s money well spent because of the larger business volumes that are generated, but it is an item of expenditure that can’t be wished away.
This is a problem that is confronting the ad display industry as a whole and not just programmatic advertising – the situation where your ad finds its way to unwanted destinations. Frequent web surfers will bear testimony to ads that are entirely irrelevant to the content surrounding them.
Companies more conscious about their reputation and brand imaging are becoming wary of sharing ad space with content that presents extremist views or fake news or are totally out of context. For example, it won’t work for your liquor ad to find its way on a website dedicated to children’s fairy tales.
But programmatic advertisers are finding a way out by blacklisting and whitelisting of sites where they want their ads to appear or not to appear. This reduces the publisher’s media inventory to sites that you want to include in your campaign.
Programmatic won’t deliver a 100 percent fill rate. One reason for this is the saturation of ad space in online platforms. With conventional ad space selling having grabbed online real estate, host publishers may end up creating a kind of roadblock to programmatic ads. Also, if programmatic doesn’t have an ad relevant to the host publisher’s space, that space remains unfilled. Even if an ad is made available, space may remain unfilled if web users face bad connections and pogo-stick to other domains.
Programmatic advertising is as susceptible to pros and cons as any other form of online marketing. But programmatic does make a big difference to advertisers that are focused on cost-effectiveness and time efficiency. Besides, programmatic can tap a more significant amount of traffic especially with audiences that are narrowly targeted, and this matches any advertiser’s goal.
The programmatic direct method still remains the preserve of big brands and premium publishers. For others, there’s the advantage of focusing on a better quality inventory to deliver and sustain a larger volume of traffic.
The online marketing space is complex and challenging to many entrepreneurs who are busy defining their brand, their image, and the product and endeavoring to get the message across to the demographic that matters. In such a scenario, programmatic advertising offers the best alternative with better results.