PROGRAMMATIC ADVERTISING, WHAT IT IS AND WHY MARKETERS USE IT
Personas. Verticals. Product-driven. Consumer-driven. CTR. Retargeting. Optimization. Just like any industry, advertising has a language all its own.
It’s a language I’ve been learning for 18 years, and with changing technology, I keeping learning every day.
If you’ve had any involvement with digital advertising, you’ve probably heard the term “programmatic” thrown around quite a bit. As you should. In the long list of advertising lingo there is to sift through, this is a term that’s worth knowing.
Personalization in advertising is not just possible; it’s essential. And programmatic advertising is the most efficient way to reach the specific lifestyles you’ve identified in your target audiences. Here’s what need to know about it:
How it came about
When it first became popular, digital advertising was primarily product-driven. This means that ads were placed on singular websites through a vendor advertising representative. The ads would then be shown to any consumer who liked[MV1] (who used or who viewed) that website, with no further filtering applied.
The challenges of this type of advertising quickly became apparent. Advertisers were sometimes paying to reach consumers who were clearly out of their geographic area, or consumers who had no interest in their product. Not to mention how labor-intensive and expensive it was place ads on multiple websites individually.
As website vendors realized they could not generate enough revenue to fully monetize their websites, they began to sell part of their ad space inventory on “exchanges,” sometimes called shared ad networks. Simultaneously, “real time bidding” became available. This meant that advertising companies could bid for ads on a huge variety of websites on a moment-to-moment basis. This moved digital website advertising away from being product-driven to being consumer-driven.
How it works
Technology allows computer programs that use algorithms to blend online behaviors and offline big data to target individuals and their online activities. With programmatic advertising, advertisers can pick geographically preferable areas (geo-fencing), genders, incomes, and behaviors of consumers they want to reach with a wide variety of websites. Ads are served based on consumers’ behaviors, not directly on singular sites.
Here’s an example
A financial institution is looking to reach potential clients who are active newsreaders. Thus, a schedule for “news sites” is developed. Advertisers suggest a few websites and the software creates mirror target sites. The software also allows ads to be served on brand-safe websites that match the criteria (location, age, gender, income) but are not specifically news sites. (This might mean a weather site or People.com.) This allows the advertiser’s message to be seen on sites that are popular but not specifically targeted.
The frequency of how often a message shows up on a targeted website is reflective of the amount of users who match the criteria, who are active online at any given time.
Why this is important
Effective advertising is about segmenting: identifying the specific interests, behaviors and lifestyles of detailed target audiences. Programmatic advertising sends messages to those who actually need to hear them, and does so in a much more efficient and cost-effective way than placing ads site by site.
If you’ve ever had a conversation with me, you probably know that I love this world. I thrive in the challenge of placing the right message in front of the right consumer at the right time, and I’d love to talk with you to discuss your own strategies. Email me at [email protected] and let’s start a conversation!