Programmatic marketing has been very successful for several years and has become an essential part of marketing, sales and advertising. It is based on the automation of processes, especially recommendation, by means of algorithms or software for marketing purposes. More concretely, it is about using user data or “cookies” to optimize the targeting of digital ads.
The advent and marketing definition of programmatic advertising
Programmatic advertising emerged in the 2000s. Today, it represents more than 8 billion euros of spending in Europe. It represents 53% of the display advertising market and is still a growing market.
Programmatic advertising can be defined in several ways. It is a fast growing phenomenon and not all experts agree on its definition. Commonly, it is defined in marketing as an automated process that allows advertising, taking into account the preferences of the Internet user, via the purchase of advertising space in real time, which is translated as Real Time Bidding (RTB).
Programmatic advertising: why is it important for your communication?
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Cost optimization
Programmatic advertising allows you to optimize your marketing strategy and your advertising investments. It allows brands and advertisers to adapt their strategy according to the target audience. Just like Google or Facebook advertising services, it allows you to adapt to users’ behavior. As a result, you avoid the potential costs used to reach an audience that is not receptive to the advertising content.
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Targeting optimization
Programmatic advertising is important in a company’s communication strategy because it allows to optimize its targeting considerably, since this process takes into account demographic data, purchase intentions, the different interests of the consumer as well as a whole lot of other data that can allow for an ever more precise targeting. Thanks to the data collected, it allows to automatically propose personalized content that matches the needs of Internet users. Thus, there is a greater chance of increasing the number of clicks and purchases.
How programmatic marketing works ? steps and tools
Before presenting the tools of programmatic marketing, we must first understand how it works. There are several key steps.
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Definition of budget and objectives for programmatic marketing
First, agencies and advertisers determine the budget for their advertising campaigns as well as the target audience, location and content of their campaigns.
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Transformation of data by algorithms of programmatic tools
Depending on the criteria mentioned, the programmatic platform exploits its algorithms to carry out several bids in real time and adjust the price offered and the selection of impressions in order to achieve the previously defined objectives of the campaign. The bids are proposed at the moment the web page is loaded.
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Display of advertising
The auction takes place in real time and the winning ad is delivered instantly, which means that it appears on the platform in question. The campaign is launched and the users interact.
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Data analysis
Data from each user interaction is collected and analyzed by the programmatic platform. Thus, the platform in question can re-select the ads and optimize them, as well as the price and user targeting, keeping only the best performing ones.
We can now introduce you to the tools of programmatic marketing:Â
- Adexchanges tool: connects buyers, i.e. advertisers, and sellers, i.e. advertising agencies and publishers.
- Data management tool: allows to manage data
- Ad-verification tool: allows to verify that the ad is displayed in the right place and in accordance with the advertiser’s choice
- Brand safety tool: prevents inappropriate display of the brand
- Dynamic Creative Optimization tool: allows to propose variations of creations and advertising messages according to the consumer’s analysis
What are the notable differences between former advertising practices and programmatic advertising?
With traditional display, there was the possibility to reserve advertising space in advance. With programmatic marketing, publishers can now auction their ad spaces, sometimes in real time (RTB), so that the highest bidders can take advantage of them.
There is also a change in the logic of operation of programmatic marketing users. The logic is no longer in advertising placement, but in audience placement. Consequently, one no longer defines a media plan, where one chooses a medium on which to advertise, but focuses on the target. The automation of the processes includes the analysis of the data of the Internet users in order to allow the direct targeting of the people whose interests or needs match the advertisement. The goal is to make each ad more relevant, as creating personalized content leads to consumer engagement.
What are the benefits of programmatic marketing?
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Programmatic marketing makes it easier to buy ad placements
Indeed, programmatic marketing allows publishers to sell their advertising spaces in an auction logic, and this in real time (RTB). It is therefore the highest bidders who win the ad placement and who exploit it instantly.
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Programmatic marketing saves considerable time
Programmatic marketing must be integrated into the media plan. To learn more about a media plan, see our article what is a media plan Programmatic marketing makes it possible to facilitate digital purchases. Here, the term “buying” implies several steps that must be planned when designing the media plan. Thanks to programmatic marketing, these often time-consuming steps disappear in favor of the automation of the buying, selling and recommendation processes.
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Programmatic marketing eliminates the gap between the preparation phase of an advertising campaign and its execution
The preparation and execution phases are now consecutive. This makes it possible to experiment with different scenarios and to analyze their performance and impact in real time. Thus, it is possible to quickly and easily decide to restrict or intensify the advertising campaign.
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Programmatic marketing allows for diversification of ad formats
Banners are still preferred but the gap with video formats, native ad, large formats or footers is considerably reduced. Today, almost any format can be marketed and on any type of universe or medium. Indeed, programmatic is available on computers, mobiles, digital panels, web radio, replay and even video game consoles.
What are the limitations of programmatic marketing?
Programmatic marketing trends are changing rapidly
As an example, currently the cost per thousand (CPM), which corresponds to the cost per thousand display ads; pop-up, banners and videos, varies greatly depending on the type of display. The cost of display CPMs has dropped by 20% while the cost of video CPMs has increased by 20%.
Skills needed to leverage programmatic marketing
You need to understand how programmatic marketing works, have the tools and certain skills to use them. Thus, 40% of potential programmatic marketing players consider that they do not have the necessary skills to put it into practice.
Lack of transparency on distribution
Almost half of people using programmatic marketing expects more transparency on the choice and delivery of ad campaigns.
Lack of tools
Finally, some people demand new tools to measure the visibility of impressions. This is a recurring request because these potential tools would allow a total optimization of corporate marketing strategy.
Gaps in the control of fraud
Here too, nearly 40% of programmatic marketers believe that better fraud control is essential. This would prevent fraudulent clicks or robots hiding behind certain ads. This would consequently reassure consumers, improve their image of digital advertising and their willingness to receive information and interact with it.
To conclude, programmatic marketing allows you to display your advertising to the right people, at the right time and in the right place. It allows you to develop your visibility and, by extension, your e-commerce sales. By refining the targeting, the company increases the performance and results of its campaigns and consequently optimizes its costs.
