All About Programmatic Ads
There are so many ways to advertise online that the choices get overwhelming. No wonder advertisers get confused. You can place ads through well-known platforms such as Google, YouTube, TikTok, Facebook, LinkedIn, and others, or you can place ads programmatically.
Programmatic ads use automated technology to buy and sell advertising space, just like social media platforms and search engines do (but mostly on their own platforms.) Instead of manually negotiating ad placements and prices, programmatic advertising relies on algorithms and software to purchase ad inventory across various online publishing sites, including Connected TV.
When executed correctly, programmatic ads offer robust targeting combined with real-time optimization. This type of ad can appear in a range of formats and sizes, depending on the details of the media buy and the placements chosen.
Many people define "programmatic" as AI ad placement, in which an algorithm chooses the digital placement based on the probability of engagement. But like so many things labeled "AI," it's not really all that automatic. Placing effective programmatic ads requires the creation of ad tags and reviews of media options. In many cases, the advertiser will want to exclude specific sites, apps, or types of digital content (gambling, politics, and sexually explicit venues are common exclusions). However, once the ads are set up, the programming takes over and can usually optimize and improve performance over time.
Not the Same as Social Media Ads
There is a lot of overlap between programmatic ads and social media ads, but few media professionals refer to social media ads as programmatic.
The cleanest distinction between the two is placement on a social media platform usually stays on that platform. Facebook ads end up on Facebook. YouTube ads end up on YouTube. But this distinction is fuzzy because these platforms often offer in-app ad placements (a type of programmatic ad) that will deliver ads off the platform while still using the platform’s data profiles. For example, if you target a LinkedIn ad to engineers, it can also be programmed to deliver ads to those engineers in other places (off the LinkedIn platform) when you use the in-app option.
However, when placing programmatic ads, you choose the placement. You are not constrained by the parameters, advertising guidelines, or image constraints of a social media ad. However, ad exchanges for programmatic ads cannot place ads on social media platforms.
Terms You Need to Know
There are lots of options when placing programmatic ads, so it pays to use an expert to help out. Here are some of the terms you'll need to know if you want to make programmatic ads part of your digital marketing program.
If you've placed ads through Google Ad Exchange*, OpenX, AppNexus, or Verizon Media, you've used an ad exchange. These aggregators allow publishers to offer space through their ad exchange and enable advertisers to send ads out to various sites and audiences quickly and efficiently. Ad exchanges will provide display, mobile, Connected TV inventory, and more without contacting publishers directly.
* Google Ad Exchange is a different tool than Google Ads.
Most online ad platforms such as websites, news outlets, and entertainment sites (also called publishers) offer some amount of programmatic advertising. By using a Demand-Side Platform, or DSP, advertisers can buy ad impressions at a predetermined bid price to purchase ad inventory from those publishers across digital, mobile, and Connected TV. This allows an advertiser to realize economies of scale. Instead of contacting each publisher and buying directly, they use an ad exchange to buy audiences and demographics quickly.
Programmatic ad platforms need both ad inventory and advertisers to work. With a Supply-Side Platform or SSP, publishers can add their ad inventory to an ad exchange with a set floor price or minimum amount, which allows the ad exchange to sell ad space on behalf of publishers at a profit. In the "old days," each publisher had to maintain a sales staff to sell ads. Today, publishers may use a mix of sales staff and programmatic or rely exclusively on programmatic to drive ad sales.
Each publisher offers different content, and their audiences have different demographics, online behaviors, and purchase behaviors. A Data Management Platform, or DMP, collects and manages all publishers' audience data, using various sources and tracking data so advertisers can decide where to place programmatic ads and when to deliver them.
Not all publishers participate in open ad exchanges. A Private Marketplace Platform, or PMP, limits ad space to a select handful of preferred clients or agencies. However, sites are seldom clear about handling ads, so some detective work may be needed to determine how to advertise on a specific site or platform.
Are Programmatic Ads Right for Your Business?
Programmatic advertising is a great way to build awareness, drive sales, and generate leads, but it's a complex and sometimes overwhelming process. An experienced marketing partner will help you get better results and higher returns. If you’d like to discuss your marketing needs, contact us today. We’d love to talk (and talk and talk.)