personas revisando una publicidad programática

Programmatic Advertising: What it is, How it works and Examples

In the digital age, evolution is constant, and programmatic advertising has emerged as one of the driving forces behind the most effective and efficient marketing strategies. From the automation of media buying to the precise personalization of ads such as viral ads , programmatic advertising has transformed the way companies connect with their audiences online. But what exactly is programmatic advertising and how does it work?

In this article, we break down the fundamental concepts of programmatic advertising, explain its inner workings, and provide clear examples of how brands are leveraging this revolutionary way of advertising to achieve impressive results. Learn about advertising for brands.

What is programmatic advertising?

Programmatic advertising, also known as “programmatic ad buying”, is a digital marketing strategy that relies on the use of advanced technology and data to carry out the buying and distribution of online ads in an automated and highly targeted manner. It is based on automated algorithms and monitoring of user behavior.

Benefits of programmatic advertising

This type of advertising offers a number of significant benefits to those who decide to use it to promote their products or services. Some of these benefits are:

Allows for extremely accurate segmentation

Advertisers can target specific audiences based on criteria such as demographics, interests, browsing history, and purchasing behavior. Thus ensuring that the ads are shown to the people most likely to be interested in said products.

Programmatic ad buying is done in real time (RTB)

Which means that decisions about which ads to show are made in milliseconds. This enables constant optimization of ad campaigns based on real-time data such as click-through rates (CTR) and conversions. Advertisers can adjust strategies immediately and get better results.

Optimize advertising investment

This reduces print waste and maximizes return on investment (ROI). Additionally, it reduces operational costs associated with traditional media buying.

Provides access to a wide variety of digital media inventory, including websites, mobile apps, and social media.

Provides a greater degree of transparency and control over campaigns

You can monitor them in real time, see where your ads are showing, and get detailed reports on performance.

Eliminates the need for lengthy, manual media buying processes

Advertisers can quickly launch campaigns and take advantage of real-time opportunities, such as relevant events or trends.

Allows the adaptation of advertising messages dynamically to audiences

Personalized ads can be created based on specific data of each user, increasing relevance and engagement.

Provides sophisticated measurement and analysis tools

Thus creating key metrics, such as conversions, click-through rates, view rates and ROIs, to evaluate the performance of your campaigns and make adjustments as necessary

Increase the level of advanced security to combat ad fraud

There are fraud detection systems that can identify and prevent the display of ads on fraudulent or low-quality websites.

Its nature makes it a highly scalable tool

Small or large campaigns can be managed efficiently, tailoring the reach according to your goals and budget.

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How does programmatic advertising work?

Its functionality is formed, very briefly, through an automated process that uses advanced technology and algorithms that optimize ad placement. So that you can understand better, here we explain in greater detail:

Real-time bidding (RTB) is the central pillar that drives the operation of programmatic advertising. When a user accesses a website, an auction is instantly triggered where available ad space is put up for grabs on a virtual ad pool. Advertisers compete to win this space, and victory is determined in a matter of milliseconds, based on a number of crucial factors. These factors include the relevance of the ad, the available budget and the profile of the target audienc

Then there’s audience segmentation, where a wide variety of data such as geographic location, online behavior, interests, and demographics can be leveraged to define precisely who they want to target. This process is accomplished through the use of Data Management Platforms (DMPs) that meticulously collect and organize this valuable data.

To access the auction in real time and compete for advertising spaces that match their audience criteria, advertisers turn to Demand-Side Platforms (DSP). These platforms allow advertisers to set up their campaigns, set budgets, and adjust their bids in real time

The highest bid in the auction becomes the winner and purchases the ad space. This ultra-fast process is what allows the ad to be displayed to the user on the website they are visiting, known as “Ad Serving”. They are the Ad Servers, which are in charge of guaranteeing that the ad is loaded and displayed properly in the advertising space earned.

Also, programmatic advertising provides the opportunity to closely track ad performance. Advertisers can analyze key metrics such as click-through rates (CTR), conversions, and return on investment (ROI) in real time. This information is essential for the continuous optimization of campaigns, allowing advertisers to adjust their strategies and budgets based on the results obtained.

Finally, this type of advertising greatly benefits from artificial intelligence (AI) and machine learning. Both advanced technologies help predict which ads will perform better based on the data collected. This allows more accurate and automated decisions to be made, improving effectiveness and efficiency.

Challenges and considerations

Although this type of advertising is an effective strategy, it also presents a number of challenges and considerations that must be taken into account if you want to maximize its success. Keeping them in mind and understanding them in depth is the first step to be able to overcome any obstacle that arises. The challenges and considerations are:

Budget control

One of the key challenges in programmatic advertising is maintaining tight control of the budget. Since ad purchases are made in real time, there is a risk of overspending. To avoid this, you must define accurate budgets for campaigns and use management tools to monitor and adjust spending in real time.

Multichannel Marketing Strategies

Managing marketing strategies across multiple channels simultaneously can be complex. You have to develop a coherent strategy that spans all channels, including programmatic advertising. This involves careful planning and coordination of messaging and creativity at all customer touch points.

Integration of the company management platform

Integrating programmatic advertising with existing business management platforms is a technical challenge. A poorly executed integration can make it difficult to collect and analyze data effectively. Working closely with IT and marketing teams to ensure the platforms are properly connected is key.

Updates

The digital environment and consumer trends are constantly evolving. What works today may not be effective tomorrow. It is crucial to keep abreast of emerging trends and adjust strategies accordingly. This requires flexibility and adaptability, otherwise it is very difficult to remain relevant in a constantly changing market.

The disappearance of the famous “cookies”

Online privacy and data protection regulations are driving the phasing out of third-party cookies, which are critical for targeting in programmatic advertising. At first they had announced that his disappearance would take place in 2022, but then it was moved to the run of 2023.

Advertising fraud

Ad fraud is still a problem in programmatic advertising. This may include displaying ads on fraudulent websites or artificially generating impressions and clicks. Security measures should be considered and implemented, such as the use of fraud detection tools and the careful selection of trusted ad networks and partners.

Adblockers

The AdBlockers that users use can limit the visibility of ads, which reduces the reach of advertising campaigns. It’s time to get creative and come up with clever, non-intrusive ad strategies. Options such as native advertising can also be explored as it integrates more naturally into the content.

Tips for a successful implementation

Don’t worry if this process overwhelms you a bit, it’s normal. Everyone seeks to make the best decisions at all times and, although it is not possible to do it 100% of the time, it is a guide that can be used. You must remember that every time you take the initiative in something new, you start with almost no experience, so you must leave room to learn from your mistake. Anyway, here are some practical tips:

Compare and evaluate different platforms available in the market

Research the features, ease of use, data quality, and reach of the platform. Understanding the differences between the options will help you make an informed decision.

Seek advice about the service

Seek advice from experts in the field. Consult professionals or agencies with experience in programmatic advertising for guidance on strategies, tools, and best practices.

Carefully select the channels that best suit your target audience and business objectives

Consider whether your ads will perform better on websites, mobile apps, social media, or other online channels.

Carry out pilot tests

These tests will allow you to adjust and refine your strategies before investing in a full campaign. You can test different messaging, creatives, and targeting to see what works best.

Keep monitoring their performance and adjusting

Use real-time data to make informed decisions and optimize ad delivery for the best possible results.

Programmatic advertising is dynamic and constantly evolving

Don’t be afraid to experiment with new strategies, ad formats, or creative approaches. Experimentation can reveal unexplored opportunities and keep you on top of emerging trends in online advertising.

Is programmatic advertising for me?

Programmatic advertising has completely changed the way businesses connect with their audiences online. This data- and automation-driven strategy offers significant opportunities, but before you jump headlong into the water without knowing how it is, you should make sure that this is what you really need to scale your business. To help you in that, here we leave you the key points and the questions to answer that you should develop to give the definitive yes:

The first fundamental step is to have clear and well-defined marketing objectives

What do you want to achieve with your programmatic advertising? Whether it’s increasing sales, generating leads, building brand awareness, or achieving another specific result, understanding your goals will help you filter options.

This type of advertising is known for its ability to personalize.

This depends on you knowing your audience thoroughly. Who are your ideal clients? What are their online behaviors and preferences? Remember that precise segmentation is key to success.

Define a clear and realistic budget

This should encompass both media buying costs and associated operating costs. Also, consider adjustments as you progress through your campaigns.

Evaluate if your company has the necessary technological infrastructure and adequate personnel

This is useful for implementing and managing programmatic advertising. Remember to include the selection of a media buying platform, access to quality data and a team trained to analyze and optimize.

Do you have knowledge or do you have personnel who have it, in data security? You need to make sure you comply with privacy and data regulations, such as the GDPR in Europe.

Define clear metrics and Key Performance Indicators (KPIs) to measure the success of your programmatic campaigns

You won’t be able to know if you are really succeeding if you don’t have indicators that tell you. Think about what factors influence your profitability and establish what KPIs you will create.

Consider pilot testing before full-scale deployment

These tests will allow you to adjust strategies and evaluate performance before committing significant resources.

Examples of programmatic advertising in companies

To give you a more visual idea of what programmatic advertising is, here are some examples:

The Economist

The prestigious British magazine specialized in disclosing the latest developments in the economic field has accumulated solid experience using cutting-edge advertising strategies. In their successful foray into programmatic advertising, they made smart use of subscriber data, cookies, and relevant content. The results of this campaign translated into an impressive increase of 650,000 new prospects.

Kellogg’s 

Approximately seven years ago, this brand adopted programmatic advertising as a fundamental part of its advertising strategy to take its digital ads to another level.

This innovative approach resulted in a notable 70% to 80% increase in viewability rates, while Kellogg’s was able to hone its ability to segment its customers more effectively.

Nike

In 2015, Nike launched an initiative called “Nike Phenomenal Shot” with the purpose of establishing a close connection with soccer fans in various regions of the planet. To carry out this campaign, the brand devised and shared interactive 3D graphics that allowed users to select scanned images of the world’s leading soccer players and customize the 3D graphic with messages, logos and other elements of their choice.

Audi

In addition to collecting behavioral data for more precise marketing targeting, the brand gave users the opportunity to personalize their ideal vehicle online from a diverse selection of up to 6,000 unique combinations. These custom designs were then used to create bespoke dynamic ads, achieving twice the effective performance compared to conventional ads. Spend on programmatic advertising resulted in a staggering four times the conversion rate compared to ads acquired using traditional methods.

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Conclusion

From precise audience targeting to automated real-time ad delivery, programmatic offers a level of personalization and efficiency that is simply unmatched in traditional advertising

Throughout reading we have seen that programmatic advertising is not only an advanced technology, but also a strategy that adapts to the needs of modern companies. In other words, it is not only the future of online marketing, but it is already a reality. With a solid understanding of its fundamentals and a strategic approach, you can make the most of this revolutionary form of advertising and take your campaigns to the next level.

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