Imagine yourself in the shoes of a marketer of an automobile company. You have been running advertising campaigns for the promotion of your newly launched model. But unfortunately, the promotion results and brand recall have been poor. You scrutinize the problem areas and come to the conclusion that you need more efficient means to reach your target audience. However, a major chunk of the budget was burnt on ATL mediums like television, & OOH hoardings and also BTL mediums like trade shows, events, and concerts. Thus, it became extremely difficult for you to generate granular reports on the way your budget was spent. But, your company wants to see the detailed reports, along with the figures showing the ROI. Now, you had seen some amazingly precise targeting done by your competitors. You are now wondering how did they achieve this. Well, the way they cracked this problem – and you can too – is programmatic advertising.
Programmatic Advertising in Detail
Programmatic advertising is a modernized approach to buying & selling of digital inventory. It uses algorithms to automate and streamline the traditional buying process and also tries to eliminate human intervention. It employs cutting-edge technologies like Artificial Intelligence (AI) and Machine Learning (ML) to mine through tons of data and smartly deciphers interesting data patterns, enabling marketers to take a smarter approach and enhance their strategies. It allows brands to reach the right customers, at the right time and the right context. Thus, it is no surprise that Programmatic Advertising has transformed digital advertising all across the globe, majorly in the USA, which accounts for the highest programmatic ad spends globally. As per eMarketer, the programmatic ad spends in the USA were estimated to be around $33 billion last year, and projected to reach $46 billion in 2019.
Programmatic Advertising in India
In 2017, programmatic display spending reached almost $33 billion. In their forecast, eMarketer estimated nearly 4 of every five digital display dollars transacting programmatically in 2017, totaling $32.56 billion. However, in 2019, with the government promoting Digital India, all businesses, their consumers and hence, their media buying efforts, are going digital. Add to this backdrop, other factors like the increasing smartphone penetration, and high-speed data connections at affordable rates. Considering all these, it does seem like the perfect time for advertisers in India to shift their budgets to programmatic advertising. Currently, programmatic advertising accounts for nearly 20% of the ad budgets in India. And, that is only when programmatic advertising is still in its nascent stage. This share is expected to increase as the sector matures further and brands realize the unique advantages programmatic advertising brings to the table.
Get started with Programmatic Advertising
Programmatic by itself is not a channel – it is a method of media buying more efficiently and effectively with the programmatic technology. It is also not solely online display media. You can now buy various types of media, including TV, audio, and out-of-home, programmatically.There are multiple platforms through which advertisers can do programmatic ad buying. The three most popular methods are direct from the publisher (direct buys), ad networks (sometimes called programmatic media partners), and demand-side platforms (DSPs).
Direct from the publisher
This is when you negotiate a media buy directly with a publisher. This involves agreeing on the inventory, ad type, and rate, which is usually on a CPM (cost per thousand impressions) basis. Your ad will only show on particular pages from that specific publisher, and you will be billed for a certain amount of impressions.
Ad agencies vary in exactly how they operate and what they look like. Generally speaking, media agencies purchase inventory and then resell that inventory to advertisers. In many cases, you will be charged a flat rate CPM, which is marked-up from the original publisher rate. You will then provide objectives such as geo targets and campaign goals, and the ad network attempts to meet those objectives within your cost constraints.
A DSP allows advertisers to buy media at cost directly through ad exchanges, where ad inventory is managed in an auction-based format or through real-time bidding. DSPs are simply technology platforms that have access to media inventory. You will typically pay fees to access the technology and from there, buy media based on your needs. This is similar to buying ad inventory in Google Ads or Facebook Ads, where you identify your campaign objectives and how much you are willing to pay or bid.
Out of the three methods identified, using DSPs is the most transparent model for advertisers. This is because DSPs give you full information on media costs and fees, where your ads were shown, and which exact audiences your ads were shown to. As an advertiser, you want to know on what websites your ads are running, whether your ads are being used for prospecting or retargeting, and that your objectives are being met. Ad networks and publisher buys, on the other hand, generally do not provide this detail to you.
Before jumping into programmatic media buying, make sure to understand your media buying objectives, what you are trying to achieve, and whether or not programmatic display can aid in that.
If you’re looking for a partner to help you launch programmatic display efforts, Strawberry Branding provides you the best media buying services.