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Programmatic Advertising: What It Is and Tips to Get Started

Authors: Todd Lebo Todd Lebo
Posted Under: Digital Marketing
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What is programmatic advertising?

Have you ever been to a public auction or estate sale? I’ve done it and it is a lot of fun. You find the item you want, the auctioneer starts the bidding process, and you start to bid. The bidding goes back and forth until someone is the high bidder and takes home the prize. 

At a public auction, the bidding process may take a few minutes. But in the digital age, the bidding can take a fraction of a second. 

What is programmatic advertising?

Programmatic advertising is the process of using technology to automate the buying and selling of online advertising. It is a real-time buying process of ads, and it is extremely effective.

With advancements in the online ad-buying process, small and mid-size businesses (SMB)s now have access to tools that give them the ability to harness the power of data and apply it systematically to increase conversions from online ads.

How are small and mid-size businesses are using programmatic advertising?

To help answer that question, Ascend2 and Perfect Audience joined together to field a survey and published the findings in a report titled The State of Programmatic Advertising from the Small and Mid-Size Business Perspective. The survey was fielded in June 2020 and a total of 213 marketing professionals from businesses with fewer than 500 employees participated in the survey. 

Here are a few noteworthy findings from the research study and some practical strategies and tips on how to apply the research to influence your marketing programs.

#1: Programmatic Advertising Budgets Are Increasing

Programmatic advertising can stretch often limited ad budgets further than traditional options. Despite uncertainty across many industries, about two-thirds (65%) of marketers report expecting an increase in budget for programmatic advertising in the months ahead. 

Programmatic advertising budget
How programmatic budgets are changing

Quick Tip from the Research: Programmatic advertising is based on real-time bidding, allowing for a faster, more efficient, and less expensive advertising experience. Given the built-in benefits of programmatic, it isn’t surprising that budgets are increasing when most marketing budgets are decreasing during the COVID-19 economic crisis. 

#2: Start Your Programmatic Advertising Program with the End in Mind

What are the primary objectives of your programmatic advertising program? 

For results-driven small and mid-size businesses, a well-executed programmatic advertising program provides a channel for increasing their bottom line with maximum efficiency. Driving sales and generating leads are top priorities when executing an online ad-buying program for 57% and 48% of SMB marketers surveyed, respectively. 

Objectives of a programmatic advertising program
Objectives of a programmatic advertising program

Quick Tip from the Research: When determining your primary objectives, you must define the purpose of your campaign. Campaigns should have a single objective (drive sales, generate leads, brand awareness), and each objective requires a specific strategy. Each program requires a unique ad set, landing page, call-to-action, and metrics to measure success. 

#3: Programmatic Advertising Is Challenging (but worth it)

Serving the right ad, to the right person, at the right time requires an enormous amount of data, tracking, and technology. That is why 46% of small and mid-size businesses report that audience targeting is a top challenge when it comes to programmatic advertising. Allocating enough budget to execute their strategy is also an obstacle for 37% of those surveyed.

Programatic advertising challenges
Programatic advertising challenges

Quick Tip from the Research: Follow the ROI and data to find your best audience to target. Did you know that with Facebook and Google you can only reach half of your audience? 

Programmatic advertising platforms will help you reach the other half of your audience. The webinar, Retargeting Beyond Facebook and Google, provides additional information on how to reach a larger target audience. 

#4: Audience Targeting is the Most Effective Tactic for a Programatic Advertising Program

A powerful targeting solution is critical to the success of a programmatic advertising strategy. Audience targeting is considered the most effective tactic for a programmatic advertising program to a 72% majority of small and mid-size business marketers. Keyword targeting is also a tactic that 40% of those surveyed have experienced success with.

Programatic Advertising Tactics

Quick Tips from the Research: Don’t overlook the success of retargeting. The average CTR for retargeting ads is 0.7% compared to 0.007% for display ads. Retargeting is serving ads to customers after they leave your website. It allows you to show your visitors relevant ads when they visit other sites. 

Here are a few of the benefits of retargeting:

  1. Higher brand lift: Four weeks after implementing a retargeting campaign, marketers found an average increase of 1046% in searches for branded terms. The performance was more than twice as effective as audience targeting without retargeting.
  2. Improved click-through and conversion rates: Three out of five viewers notice and consider ads they’ve previously seen at another source (eMarketer). Retargeting has a click-through rate that’s 10 times higher than a typical ad (Wishpond). Visitors who are retargeted are also 43% more likely to convert than those who aren’t. (Criteo) 
  3. Better value for money than other advertising methods: 91% of marketers who’ve used retargeting find it to perform same or better than search, email or display (IAB)
91% of marketers who’ve used retargeting find it to perform same or better than search, email or display Share on X

#5: Return on Investment (ROI) Is the Most Important Metric of a Programmatic Advertising Prorgram

Measuring the impact of advertising campaigns is critical to optimizing a programmatic strategy. Return on Investing (ROI) and Return of Ad Spend (ROAS) is the most meaningful metrics for tracking success according to 58% and 36% of those marketers working with businesses with up to 500 employees. 

Programmatic Metrics

QUICK TIP from the Research: What is the difference between ROI and ROAS? ROAS is a subset of ROI and tells you if an ad campaign is working. ROI tells you if your entire program or department is profitable. Here is a video that provides more detail on the differences between ROI and ROAS (start at minute 2:55 of the video). 

Here is a link to the entire report, The State of Programmatic Advertising from the Small and Mid-Size Business Perspective. 

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