Traditional marketing through ads cannot measure the Return On Investment (ROI) of advertising campaigns in real-time. For eCommerce businesses, this is challenging because they don’t provide the best insight to ensure that your campaigns can be successful and generate more growth. 

Programmatic advertising is a sophisticated way of placing advertising using traffic data and display targeting to attain impressions for better ROI. These ads are known to yield effective results for both big brands and SMEs. With this type of advertising, marketers get more time to work on improving and optimizing ads to create a successful campaign.

So, what is programmatic advertising, and what should marketers know about it? First, let’s break down its functioning and benefits:

Programmatic Advertising – The Breakdown

Programmatic advertising has become a buzzword in the marketing world. Known for using algorithmic tools and automated technology for media buying, this type of advertising allows automated bidding whenever consumers visit websites or web pages with ads.

 Simply put, it gives your business one sole access location for all inventory, serving as a way to purchase your ad space and place your messaging. Additionally, you get transparency into budgeting and campaign performance metrics—the term programmatic co-relates to the process of how advertisements are sold and bought. 

How Does Programmatic Advertising Work?

When someone, namely a potential customer, clicks on a link to a website, the owner uses a Supply-Side Platform (SSP) to notify multiple ad exchanges to put the ad space up for auction. 

Marketers then use a Demand-Side Platform (DSP) to offer bids. The DSP is connected to a data management platform to ensure the placing of the ad targeting the right audience.

Multiple factors are taken into account while creating the ad, including the following:

• Location
• Demographics
• Online activity
• Consumer behavior

Contextual targeting is also a part of the technology and utilizes website content with specific phrases, keywords, images, and categories that trigger an ad space purchase. 

The winning business’s ad gets placed on the site. Programmatic digital ads are estimated to make up 91% of all United States ad spending by 2023.

Types of Programmatic Advertising

There are many examples of programmatic advertising. The majority of the process is called Real-Time Bidding (RTB), but there are also other types of advertising to be aware of, which includes:

• Private marketplace: these invitation-only exchanges are when a set number of publishers invite industry-specific advertisers to bid. It gives your business help to bypass other exchanges and has their buying platform plugged directly into the publisher’s inventory.

• Programmatic direct: businesses can buy a guaranteed number of impressions on a website or from a publisher. It assures ad space on sites at a fixed-price agreement.

• Preferred deal: one-on-one auctions where publishers sell high-yielding inventory at a set price to only a select amount of marketers. These marketers bid in real-time.

Benefits of Programmatic Advertising for Marketers

Here are some of the reasons why Programmatic advertising is successful and helpful for your eCommerce business:

Ad Targeting

One of the most significant advantages of this type of advertising is that it allows marketers to target their campaigns based on a target audience. Your business needs to understand its ideal consumers or demographic to execute effectively, but instead of buying set inventory from publishers, your brand can focus on the customers. 

In the world of sales, customer service is the utmost priority. Knowing who your audience is and what they need from you will go a long way to help shape the content within your ads so that you are efficiently serving them.

Customer Insights

Another great benefit of programmatic advertising is the data marketers receive. It takes real-time data and reports about your ad’s performance, making it easier for you to change or alter elements for a more optimized and effective campaign that appeals to your customer base and helps your brand become recognizable. 

Bigger Audience

Marketers can reach bigger pools of potential customers by purchasing programmatic ad inventory. As a result, publishers have access to significant amounts of people who want to buy.

Revenue

The process of programmatic advertising is so much faster and even less expensive than prior methods. Therefore, your business is assured of demonstrating the ability for a much higher ROI. It also optimizes the bidding process, giving marketers a reasonable price and a higher profit margin.

Programmatic Advertising Success for Marketers

Your content needs to cater directly to those who you want to reach. So, your business needs to have a clear target audience and an effective strategy. You can obtain deeper insights through metrics including Cost per Click (CPC), Cost per Completed View (CPCV), and Click-through Rate (CTR). 

Programmatic advertising is designed to get your business’s message and value to people who need it. But knowing your audience and how to connect with them is vital to help you determine these people for it to work successfully.