If you have yet to harness the benefits of programmatic advertising, there is no better time than now. This year alone, global advertising spending is projected to reach approximately 781 billion U.S. dollars¹ — a figure forecasted to reach a whopping 885 billion U.S. dollars by the end of 2024.

Digital advertising dominates global ad spending, now encompassing 75% of the market share.² In particular, programmatic media buying accounts for upwards of 82% of digital ad spending and is only slated to increase through 2027.² Programmatic has become a staple in digital marketing. 

If you have landed on this article, chances are you are curious about how programmatic media can enhance your business. Fortunately, you have come to the right place. Here is what you need to know about the benefits of programmatic advertising and how to leverage programmatic perks properly. 

How Does Programmatic Advertising Work?

Before understanding how programmatic advertising works, it is essential to have a general notion of the digital media buying landscape. Digital media buying refers to selecting and purchasing ad space and time on digital platforms like websites and social networks.

There are three types of digital media buying:

1. Manual buys refer to manually bidding on ad inventory and managing bids through an ad exchange, like Google Ads.
2. Direct buys refer to the process of negotiating ad rates and run times directly with a specific advertiser’s ad platform, like WebMD.
3. Programmatic buys refer to the process of automating media buying through artificial intelligence (AI) and algorithm-enabled bidding on demand-side platforms (DSPs). 

Programmatic advertising significantly accelerates the media buying process. Because programmatic leverages algorithms to purchase ads, the communication that is involved in manual and direct buys — like negotiations — is dramatically decreased with minimal effort.

Due to the automated nature of programmatic ad buying, the process focuses more on the target consumer than the target placement. Marketers must set an explicit target, designate a cost per click or impression, and provide the ad, and AI will do the rest to best match consumer profiles.

9 Key Benefits of Programmatic Advertising

So, why has the digital marketing landscape skewed so far in favor of programmatic advertising? Put simply, programmatic ad campaigns are a faster, more efficient method of media buying that eliminates hours of tedious manual administrative tasks and back-and-forth conversations. 

However, several additional benefits of programmatic advertising extend far beyond the simplicity of media buying. From enhanced brand awareness through ad effectiveness and audience reach to flexibility in media formats and optimizations, consider these nine perks of programmatic ads.

1. Increased Ad Effectiveness and Reduced Ad Cost

One key driver behind the popularity of programmatic advertising is the increased ad effectiveness that comes at a reduced ad cost. Programmatic media is typically a fraction of the cost of a direct or manual buy yet provides levels of targeting that far surpass traditional advertising avenues. 

Whereas other media buys can be sold on a CPA (cost per action), CPC (cost per click), CTC (click through conversions), or CPM (cost per thousand impressions) basis, programmatic is primarily sold on a CPM model. Though factors such as industry, ad format, and ad placement can influence ad spend, programmatic averages $0.50 to $2 CPMs compared to the average $10 CPM of a direct buy.³ 

2. Enhanced Audience Reach 

With CPM drastically cheaper for programmatic advertising, it goes without saying that you can reach more people with less money. But there are other ways programmatic benefits your audience reach. Programmatic advertising encompasses channels beyond Google or social media — like Connected TV (CTV), display, native, and video ads — that can truly ramp up brand awareness. This explains why brands experience an 11% increase in reach efficiency with programmatic.⁴

3. Allows for Real-Time Optimization and Bid Submission

At a time when the digital landscape has embraced real-time marketing, one of the major benefits of programmatic advertising is real-time bidding. As the name might suggest, real-time bidding (RTB) is an automated process to place bids for specific display ad placements in real time. 

RTB offers advertisers a major advantage, predominantly speed, and efficiency. However, RTB also enables advertisers to measure how campaigns perform as soon as they are launched, allowing real-time optimization to make necessary adjustments that boost overall performance. 

4. Improved Targeting Capabilities

Of the various types of media buying, programmatic buying offers advertisers unrivaled targeting abilities. Multiple factors can be segmented and targeted according to an advertiser’s needs. Some examples of enhanced targeting capabilities available through programmatic advertising include: 

1. Audience targeting serves ads based on consumer characteristics like age, gender, household income, and more. 
2. Behavioral targeting serves ads based on consumer behaviors, such as website history, purchase habits, and product interests. 
3. Contextual targeting serves ads based on content relevancy, like placing a skincare product ad alongside an article about dry skin. 
4. Geotargeting serves ads based on location, from broad data like region and state to more granular data like city, zip code, and even IP address. 
5. Retargeting serves ads based on users who have shown previous interest in your brand but have not yet converted or made a purchase.
6. Cross-device targeting serves ads between one consumer device to the next, such as from a personal laptop to a cell phone. 

5. Transparency in Placements

Another benefit of programmatic advertising is the transparency in ad placements and activity. Programmatic advertising lets marketers view the exact sites on which ads are placed and what kind of audiences are viewing them to ensure their message meets the right end users. Likewise, there is a growing movement to make programmatic ad costs more transparent. 

6. Variety of Creative Formats

Also mentioned as a leading factor in expanded audience reach, the variety of creative formats available for programmatic advertisements is an appealing perk for marketers. Rather than put all your eggs in one basket, you can produce and test multiple formats to identify the media with the highest return on investment (ROI) and the media that resonates most with your target user. 

Some of the various types of programmatic ads include: 

• Audio ads
• Connected TV (CTV) ads
• Digital Out-of-Home (OOH) ads
• Display ads
• Native ads
• Video ads

7. Builds Omnichannel Presence

Programmatic advertisements can follow consumers from home to work or from one device to the next. For instance, a user can be exposed to programmatic video advertising while on their laptop in the morning, experience a similar audio ad on their cellphone in the afternoon, and even encounter a related digital billboard or equivalent OOH ad on the way home in the evening. 

The vast reach of programmatic digital advertising drives an impressive omnichannel presence or the ability to appear across multiple advertising avenues simultaneously. Not only can an omnichannel presence help enhance brand awareness, but it can also simplify the process of lead generation. The more users are continuously exposed to your brand, the easier it is to gain a new lead.

8. Easily Trackable and Scalable

A programmatic ad campaign is the most trackable, as real-time visibility into performance and placement helps marketers keep an eye on ad spend. However, it’s also the most scalable type of ad campaign, particularly for a start-up or small business with restricted finances. Programmatic ads allow for adaptable campaign budgets, for which marketers can set a monetary limit for a total daily budget that’s then strategically spent throughout the day via automation. 

9. Saves Time by Avoiding Manual Negotiation

The last (but certainly not least) benefit of programmatic advertising is the time saved by avoiding manual negotiation. Programmatic buying eliminates spending hours on bidding, trading, and negotiating and empowers marketers to buy ad space across millions of websites in seconds. Combining AI and algorithms also reduces the chances of time-consuming human error. 

How to Leverage the Benefits of Programmatic Advertising Properly

Now is the time to take full advantage of the benefits of programmatic advertising. If you’re ready to ramp up brand awareness and advertising effectiveness through a channel that offers superior transparency, targeting, and tracking, these are the programmatic basics you need to know.

1. Determine Your Goals

Like any other digital marketing strategy, you must determine your goals for programmatic advertising before getting started. Decide what you want to accomplish and why — do you want to reach new audiences or retarget existing customers? Do you want to reduce ad spend or simply boost the ROI of your current efforts? Your goals will help you identify the proper programmatic channels, whether through display ads, digital OOH ads, or a combination. 

2. Identify and Segment Target Audience

With your goals in hand, you can move on to identify and segment your target audience. Remember, programmatic advertising enables marketers to use incredibly granular targeting based on audience behavior, location, and previous activity. By failing to define your target audience clearly, you forgo the ability to serve users a relevant ad, which can significantly plummet performance. Instead, create distinct audience profiles with criteria like age, gender, and interests for maximum relevance.

3. Create Ads for Target Channels

Once you have established clear goals and audience profiles, you can create ads for your target channels. Again, your goals and audience will position specific channels as more relevant to your user base, such as video ads for a younger demographic or OHH ads for a particular location. Be sure to build appropriate creative and copy for each channel you are targeting, as each will have varying requirements for details like size, character count, media type, and more. 

4. Pick Your DSP

Now, you can finally choose your demand-side platform (DSP). A DSP is a programmatic advertising platform for marketers to autonomously buy display, video, and mobile ad inventory. Your DSP is where you will purchase ad space across multiple RTB networks and manage ad spend.

There are numerous DSP tools on the market, from major players like Amazon DSP to theTradeDesk and adform. Select your DSP based on the tentative requirements for your ad targeting options, ad inventory, data sets, and user interface and tech support preferences. 

5. Leverage Data to Drive Your Strategy

Finally, support your strategy with valuable data to take your campaign to the next level. Marketers can use three types of data to target customers more precisely and drive conversions:

1. First-party data refers to information gathered directly from your customers, including actions taken on your website, customer survey results, and CRM or subscription details. It’s beneficial to gain insights that fine-tune and personalize your audience segments.
2. Second-party data refers to another entity’s first-party data purchased directly through a private marketplace. It contains information like website activity and customer survey results and can help scale data for an otherwise small audience. 
3. Third-party data refers to information pulled from multiple sources by giant data aggregators like Nielsen. It is non-exclusive, meaning competitors can leverage it, but it can still help to enhance first-party data and provide context to particular insights. 

Which Mistakes to Avoid with Programmatic Media

Though programmatic advertising has several benefits, there are a handful of mistakes to avoid. If you’re just getting started with a programmatic ad campaign, take care to avoid these common missteps along the way. 

Not Defining Key Performance Indicators (KPIs) 

Key performance indicators (KPIs) are essential to a programmatic campaign, as they gauge ad success over time. However, KPIs are useless if they have not been properly defined. Campaign KPIs vary across media channels and verticals; some have even become more akin to vanity metrics.

Vanity metrics consist of data sets that paint your campaign positively but fail to address progress on actual business goals. Your campaign might have high impressions, but are users actually converting from it? Avoid vanity KPIs like impressions, page views, and open rates. 

Not Having A Flexible Budget

A major pitfall in advertising is the lack of a flexible budget. For programmatic ads, specifically, spending can occasionally be sporadic and unexpected — particularly when you want to allocate a budget suddenly, like in response to seasonality or current events. However, avoid being too flexible with your budget, and maintain a reasonable range for maximum spend. 

Tweaking Campaigns Without Sufficient Data

Do not be quick to adjust digital marketing campaigns after the first week or even the first day. Unfortunately, this can throw your entire campaign off track. If trends emerge over a month or two, then make slight adjustments to capitalize. Too many adjustments in too short of time can inhibit you from learning, and changes lead to positive or negative outcomes. 

Upgrade Your Programmatic Advertising Campaign

Programmatic advertising can offer brands various benefits, from increased ad efficiency at a reduced cost to enhanced audience reach and tracking. With a robust variety of media channels, programmatic ads magnify brand awareness and drive an omnichannel presence.

If you want to upgrade your programmatic advertising campaign, turn to a digital marketing agency with thriving paid media services. Contact us today to learn how Bullseye Strategy harnesses our decade of paid media experience to supercharge your programmatic media strategy. 

Sources: 

1. https://www.statista.com/statistics/1174981/advertising-expenditure-worldwide/ 
2. https://www.statista.com/outlook/amo/advertising/worldwide#ad-spending 
3. https://medium.com/katana-media/programmatic-buying-101-the-cost-efficiencies-785b9a569171 
4. https://www.thinkwithgoogle.com/marketing-strategies/automation/maximize-media-consolidation-reach/