4 Reasons for Using Programmatic Advertising
Programmatic advertising plays a vital role in digital advertising. Programmatic ad transactions account for an incredible 90% of all display ad spending in dollars.
You’ve hopefully already read all about the different types of Programmatic Advertising, and maybe even started to form some sort of opinion on which would work best for you. You might have even read our ebook and our in-depth Programmatic Advertising guide.
In this blog we’ll delve into the benefits of programmatic advertising, so you can see how it can help you deliver more efficient, cost-effective advertising campaigns.
Better Campaign Performance Overall
Whichever way you choose to use Programmatic Advertising, it’s likely to provide tangible benefits to your overall campaign performance, as long as you’re using it the right way. This means knowing your audience, and crucially, knowing where to find them. Doing some analysis on buyer personas will help with this, as you can really visualise your target audience.
Once you have this organised, you should know which markets and inventory will be most useful to you, so you can start purchasing space. The improved results will naturally follow this, as your adverts will be displayed in front of people who you have already identified as being more likely to show interest in your brand.
Data-driven targeted advertising is proven to be more successful than older digital strategies. Research has found that customers understand that companies use personal data to create tailored ads – and they actually prefer personalisation. According to eMarketer, 73% of consumers expect companies to understand their unique needs and interests.
Recent research by Merkle discovered that 86% of customers surveyed are happy to receive personally tailored offers based on their browsing and purchase history. A further 90% of customers are willing to share more personal data after a positive experience with a brand. Just don’t take this willingness to share information for granted, since 70% of respondents want to receive something in exchange for their data. So you can expect to see great results as long as you have identified your markets in the right way – and you respect their data.
Early in the life of digital advertising, you could only really analyse a campaign once it was finished. You’d send out an ad, with a fixed budget or for a fixed time, and sit patiently awaiting the results, hoping for something positive. Then, you’d take what you learned, and apply it to the next batch of advertisements. One of the benefits of programmatic is that you no longer have to wait.
Now, thanks to the constant streams of data and audience analysis, you can analyse your campaigns in real time, and more importantly, adapt and change them almost instantaneously in order to react to the feedback.
If you take the time to optimise ads using real-time data, you’ll be way ahead of the competition. In its State of Personalisation 2022 report, customer engagement platform Twilio found that only 47% of companies customise communications based on real-time behaviour. Once you start optimising your campaigns as they’re running, or letting a few algorithms do it for you, you’ll notice how even the smaller changes can affect engagement in a big way.
A/B testing is a huge benefit in programmatic and real-time optimisation. It’s really simple to carry out, particularly with Bannerflow, but it can make a massive difference to performance. It helps you analyse two campaigns against each other instantly, to see which is worth investing more in. Even seemingly tiny alterations can benefit any marketing campaign, so make sure you experiment with, and analyse, your display ads.
Ad wastage is a major problem in advertising, with investments lost through overbidding and campaigns that fail to deliver meaningful conversions or interactions. Some of this wastage is due to poor audience targeting and scheduling, but ad blocking and ad fraud also cause challenges. Marketing agency Next&Co’s annual Digital Media Wastage Report revealed that advertisers wasted $5.46 billion of their digital ad spend budgets in 2022.
One of the benefits of programmatic advertising is that it’s more cost-effective and less susceptible to waste. As programmatic advertising becomes more advanced, and as you become more adept at analysis, there will be fewer impressions wasted, and fewer ad campaigns seen by the wrong audience. With this, you should see your return on investment (ROI) improve significantly, and your conversion rates increase.
The main wastage issue then will be ad fraud, where your ads are seen by ‘bots’ as opposed to humans. Businesses lost $81 billion to ad fraud in 2022. But companies like Google are combating this all the time.
This is potentially the most advanced aspect of programmatic, and when used in the right way, can produce fantastic results. Basically, with contextual campaigns, marketers can control which consumers see which ads, and when. The ultimate goal is to show the exact right ads at the perfect time to the ideal consumer, who will then click through and engage with the brand, or buy the product.
The phasing out of third-party cookies means contextual targeting will be back in fashion for years to come. The statistics also back this up. According to Statista, worldwide contextual ad spending is forecast to double from $178.3 billion in 2021 to $376.2 billion in 2027.
Audiences seem to prefer contextual personalisation, too. A 2022 study commissioned by contextual intelligence platform GumGum revealed that 79% of UK consumers are more comfortable seeing ads that are relevant to the web page they’re browsing rather than their behaviour.al data. Older millennials (35-44-year olds) are the most comfortable with contextual ads.
Programmatic contextual advertising narrows the potential audience down to people who you, as the marketer, are fairly certain will be interested in your campaign. Although in theory this is relatively straightforward, the technology behind this is spectacular, allowing different ads to be shown to different people based on their interests and browsing history, all in a matter of milliseconds. That’s the real power of programmatic.
The future of programmatic advertising
As the digital display landscape continues to evolve, you can expect programmatic advertising to play an even bigger role in digital display campaigns.
The benefits of programmatic advertising lie in its vast reach, access to inventory, real-time efficiency, transparency, and cost-effectiveness. Today’s programmatic campaigns are no longer limited to laptops and mobile devices. It’s a brave new world of connected TV (CTV), streaming devices, and digital out-of-home.
Programmatic advertising is better positioned to respond to external forces, such as lifestyle changes throughout the pandemic and the impending post-cookie world. Its omni-channel focus is also an advantage for companies facing changing priorities and uncertainties, such as budget allocation and the switch to in-house marketing. It provides a holistic solution that can provide great value for brands and future-proof their marketing efforts.
There are no real reasons not to be looking into programmatic buying. Although it’s still only in its infancy, the benefits are proven. Utilising it in the right way has delivered huge results for some of the biggest corporations in the world, and the best thing is that it’s fully scalable, so anyone can benefit from it. Of course, to reap the rewards, you need to lay the foundations by knowing your audience, but as a wise, knowledgeable marketer, you know them already. Now it’s time to start putting that data to good use.