What Is Programmatic Advertising and Why Should You Get Into It?

Safalta Expert Published by: Vanshika Jakhar Updated Fri, 30 Dec 2022 11:25 AM IST

Programmatic advertising refers to the use of technology to automate the buying, selling, and placement of advertising. It allows for the targeting of specific audiences and the optimization of ad campaigns in real-time. Programmatic advertising has gained widespread adoption in recent years due to its ability to efficiently target specific audiences and its ability to track and measure the effectiveness of advertising campaigns. It can be used for various types of advertising, including display ads, video ads, and mobile ads. Overall, programmatic advertising is a powerful tool for advertisers looking to reach specific audiences and optimize their ad campaigns in real-time.

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Table of Content
What is Programmatic Advertising?
What Is the Difference Between Programmatic Advertising and Display Advertising?
Programmatic Advertising Platforms
What Are The Benefits Of Programmatic Advertising?
How much does programmatic advertising cost?

What is Programmatic Advertising?

Programmatic advertising refers to the use of software to automate the buying, placement, and optimization of digital advertising.

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Source: Safalta

It allows advertisers to target specific audiences and track the effectiveness of their campaigns in real-time. Programmatic advertising uses algorithms and data to analyze and select the best available advertising inventory, such as display ads, video ads, and mobile ads, to reach the desired audience. This helps advertisers to more efficiently and effectively reach their target audience and achieve their advertising goals. Programmatic advertising can be divided into two main categories: real-time bidding (RTB) and programmatic direct. RTB involves buying and selling advertising inventory in real-time through an auction process, while programmatic direct involves purchasing advertising inventory directly from publishers through a private marketplace.
Overall, programmatic advertising has become an increasingly popular way for businesses to reach their target audience and effectively allocate their advertising budget. It allows advertisers to be more precise in their targeting and helps to ensure that their ads are seen by the right people at the right time.

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What Is the Difference Between Programmatic Advertising and Display Advertising?

Programmatic advertising and display advertising are both forms of digital advertising, but they differ in how they are delivered and targeted.

Programmatic advertising refers to the use of software to automate the buying and selling of advertising space. This type of advertising involves the use of algorithms to target specific audiences and serve them relevant ads in real-time. Programmatic advertising can be used for various ad formats, including display, video, and audio ads. It is often used for targeted, data-driven campaigns and can be highly effective in reaching specific audiences at scale.

Display advertising, on the other hand, refers to the use of banner ads, pop-ups, and other visual ads that are displayed on websites or other online platforms. Display ads can be served through various channels, including programmatic advertising, but they are not limited to it. Display ads are often used to increase brand awareness and drive traffic to a website. They can be targeted based on various factors, such as the content of the website they are displayed on, the user's location, or their browsing history.

Read more: How to Set Up a Google Display Advertising Campaign

 

Programmatic Advertising Platforms

Programmatic advertising platforms are automated systems that use algorithms to buy and sell digital advertising inventory in real-time. These platforms allow advertisers to target specific audiences, optimize ad spending, and measure the effectiveness of their campaigns.

There are two main types of programmatic advertising platforms: demand-side platforms (DSPs) and supply-side platforms (SSPs).

  • Demand-side platforms (DSPs) are used by advertisers and agencies to buy ad inventory from various sources, including ad exchanges and SSPs. DSPs allow advertisers to bid on ad space in real-time and target specific audiences using data such as demographics, interests, and browsing history.
  • Supply-side platforms (SSPs) are used by publishers to sell ad inventory to advertisers and agencies. SSPs allow publishers to set the price for their ad inventory and reach a wider pool of potential buyers through ad exchanges and DSPs.


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What Are The Benefits Of Programmatic Advertising?

Programmatic advertising refers to the use of software to automate the process of buying and placing digital advertising. There are several benefits to using programmatic advertising:

  1. Efficiency: Programmatic advertising allows for the automation of ad buying and placement, which can save time and resources compared to manual processes.
  2. Targeting: Programmatic advertising allows for highly targeted and personalized ad campaigns, as it uses data and algorithms to select the most relevant ads to display to specific audiences.
  3. Real-time bidding: Programmatic advertising allows for real-time bidding, which means that ads are purchased and placed in real time based on the availability of ad space and the perceived value of the ad to the publisher.
  4. Cost-effectiveness: Programmatic advertising can be more cost-effective than traditional ad buying methods, as it allows for more precise targeting and the ability to optimize ad campaigns in real-time.
  5. Measurement and reporting: Programmatic advertising provides detailed measurement and reporting capabilities, which can help advertisers track the performance of their campaigns and make data-driven decisions about their ad strategy.

 

How much does programmatic advertising cost?

The cost of programmatic advertising can vary widely depending on several factors, including the type of ad, the target audience, the platform being used, and the level of competition for ad space.

In general, programmatic advertising can be more cost-effective than traditional forms of advertising because it allows advertisers to target specific audiences and track the effectiveness of their campaigns in real-time. However, the cost can still be significant, especially for highly competitive industries or for campaigns targeting large audiences.

One way to estimate the cost of programmatic advertising is to use online tools that provide estimates based on factors such as target audience, ad format, and ad placement. These tools can provide a rough estimate of the cost, but it's important to keep in mind that actual costs can vary significantly.

It's also worth noting that programmatic advertising can be more complex than other forms of advertising, and it may require specialized expertise to set up and manage effectively. As a result, it may be necessary to hire a professional agency or consultant to help with programmatic advertising campaigns, which can also impact the overall cost.

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What are the benefits of programmatic advertising? 

  • Efficiency: Programmatic advertising allows for the automatic optimization of ad campaigns, reducing the need for manual labor and increasing the efficiency of ad spending.
  • Targeting: Programmatic advertising allows advertisers to target specific audiences with precision, increasing the likelihood of reaching the right people with the right message.
  • Real-time optimization: Programmatic advertising allows for real-time optimization of ad campaigns based on performance data, allowing advertisers to make adjustments on the fly to improve results.

What are the challenges of programmatic advertising? 

  • Complexity: Programmatic advertising can be complex, requiring a deep understanding of technology and data analysis.
  • Fraud: Ad fraud is a significant problem in the programmatic advertising industry, with some estimates suggesting that as much as a quarter of ad spending is lost to fraudulent activity.
  • Brand safety: Programmatic advertising can sometimes result in ads being placed on inappropriate or controversial sites, leading to concerns about brand safety.

How does programmatic advertising work? 

Programmatic advertising uses algorithms to analyze data about target audiences and select the most relevant and effective ad placements. Advertisers typically use demand-side platforms (DSPs) to bid on ad inventory and target specific audiences. Publishers use supply-side platforms (SSPs) to sell ad inventory to the highest bidder. The transaction is facilitated by an ad exchange, which matches buyers and sellers in real-time.

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