In digital marketing, automation plays a key role in helping brands effectively engage with their audience. Programmatic advertising is a technology that allows you to buy and sell ad impressions in real-time using algorithms and artificial intelligence. This approach not only speeds up the ad placement process but also makes it more accurate and personalized. Ad creatives in programmatic advertising play an important role since the quality and relevance of advertising materials directly affect user engagement. In this article, we will analyze what programmatic advertising is, how it works, and why it has become an integral part of modern marketing.
The Main Thing About Programmatic Advertising
The difference between traditional and programmatic advertising is that while the usual method involves buying and selling advertising space manually, programmatic automates this process — the purchase occurs in real-time using a special algorithm based on a number of criteria. Advertising that is purchased in this way will be shown only to relevant users on the sites they visit. At the same time, advertising can be purchased on a large number of sites at once. This allows you to reduce advertising costs and increase the effectiveness of communication.
Today, most brands purchase advertising placements through programmatic, and in recent years, budgets for it have grown significantly. Among the main advantages, experts highlight wide opportunities for targeting and a large audience volume.
Programmatic advertising is based on extensive work with user data, which helps to reach the most targeted audience and offer them the most relevant product — one that the user has already shown interest in, or that, according to the algorithms, may be useful to them.
The audience is segmented by various parameters, such as demographic data, interests, behavioral patterns, and more. This data is taken from various sources, including data from the programmatic platform itself, information about user behavior on the Internet from external platforms, and the advertisers’ own data.
For example, if a person previously searched for specific cat food, he will be shown ads from other manufacturers or related products. The same ads can be shown to those users who have studied cat training lessons. The algorithm concludes that the user has a pet.
Based on the data, programmatic works with an audience that is likely to be interested in the offered product or service, thereby increasing the effectiveness of campaigns and reducing the costs of irrelevant impressions. This allows you to more accurately and effectively reach potential customers with ad creatives and increase conversions in programmatic advertising.
How Does Programmatic Advertising Work?
To understand how programmatic advertising works, it is important to understand the basic concepts:
- A Demand-Side Platform (DSP) is a platform for purchasing advertising space. Here, advertisers try to buy the most targeted traffic at the lowest price.
- A Supply-Side Platform (SSP) is a platform for selling advertising space. Here, publishers aim to sell their advertising space as profitably as possible.
- A Real-Time Bidding (RTB) is a real-time auction in which several advertisements compete for the opportunity to be shown to a specific user.
- A Data Management Platform (DMP) is a data management platform that allows you to collect, store and analyze user data. DSP understands which users should be viewed based on the data from the DMP.
How advertising is purchased:
- The advertiser sets the parameters of their advertising campaign, including the target audience and the campaign budget. This happens on the DSP platform.
- The user visits the page – an auction takes place at the moment it loads.
- The SSP receives information about the user and passes it on to all buyers from the DSP, i.e. it puts up a lot.
- Based on the information received, the DSP decides how interesting a particular user is to them and sets a bid for displaying an ad to them.
- All bids from the DSP are collected. The advertiser who offers the highest price for displaying an ad wins. It is their ad that will be shown to a particular user.
Thus, each auction participant benefits: the advertiser receives an ad display to the target user, the publisher receives payment for the display, and the user receives a relevant offer based on their interests.
Types of Programmatic Advertising
The variety of programmatic advertising formats allows you to choose the most effective way to reach your target audience. Such advertising can be divided into two categories.
By format:
- Banner is the most common format of advertising placement on the Internet. This is a graphic block that is placed next to the main content of the site, most often it is an image with text. It can be of different sizes, static or dynamic.
- Video (OLV, Online Video) – advertising in video players: ads that appear before, during, and at the end of videos (pre-roll, mid-roll, and post-roll). This also includes the following formats: in-display ads – advertising in the form of thumbnails on video panels and outstream ads – video advertising outside the player, which plays automatically when you visit the page.
- Native advertising – advertising that looks like part of the content of the visited site / application. Often, users do not perceive such placement as advertising.
- Audio — advertising in streaming music services and podcasts in various formats, including linear audio advertising, companion display ads, skippable audio advertising, and rewarded audio in apps.
By device type:
- Display ads — advertising on websites, including banners, short videos, native advertising, etc.
- Mobile ads — advertising on mobile devices.
- In-app — advertising in mobile applications.
- Digital out-of-home (DOOH) — digital outdoor advertising.
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Conclusion
Programmatic advertising has revolutionized the digital marketing landscape by making the ad-buying process fast, automated, and data-driven. Using artificial intelligence and machine learning technologies, it is possible not only to accurately identify the target audience but also to tailor advertising materials to their interests. Programmatic advertising creatives play a key role in successful campaigns, providing a personalized user experience and increasing conversion. If you are looking for a reliable programmatic advertising service provider, we recommend paying attention to SmartyAds.
