Programmatic advertising is the use of software to automate the buying and selling of ad inventory across digital platforms. Advertisers pay publishers based on how many people view their ads, rather than paying per impression. Publishers make money by selling their own inventory, which includes video, display, mobile, and social ads. In this Advertisers bid on keywords and/or phrases associated with their products and services. Publishers then choose which ad they want to display based on the advertiser’s bids.
Advertisers have been using programmatic advertising since the early 2000’s, but it wasn’t until recently that they became mainstream. In 2017, Google launched its first-ever auction platform called DoubleClick Bid Manager, which allowed advertisers to bid on specific keywords and placements. Facebook followed suit later that year with Facebook Exchange, which was similar to DoubleClick Bid Manager. Since then, both companies have continued to expand their offerings.
Today, programmatic advertising accounts for over 90% of online advertising spend. According to eMarketer, the global market for programmatic advertising will reach $40 billion by 2020.
Since every advertisement has its own advantages and disadvantages. Lets drive and learn about advantages and disadvantage of programmatic advertising.
Advantages of Programmatic Advertising
1. Programmatic Advertising Is More Cost Effective Than Traditional Advertising
Programmatic advertising is much cheaper than traditional advertising. Because of this, it is more cost effective than traditional methods. In fact, some companies have reported that they spend less money per impression than their competitors.
2. Programmatic Advertising Can Be Used To Reach Specific Audiences
Traditional advertising is not always targeted at specific audiences. However, programmatic advertising can be used to target specific audiences. This means that you can reach people who are interested in what you sell. You can also use demographic data to target certain groups of people.
3. Programmatic Advertising Allows Brands To Have A Voice
With traditional advertising, brands do not have a voice. They cannot speak directly to consumers. However, with programmatic advertising, brands can speak directly to consumers. This gives them a chance to tell their story and connect with customers.
4. Programmatic Advertising Helps Brands Build Trust
When brands advertise traditionally, they often feel forced to lie about their products. This makes many consumers distrustful of brands. When brands advertise using programmatic advertising, however, they can be truthful about their products without having to worry about being caught lying.
5. Programmatic Advertising Makes Your Brand More Visible
Traditional advertising does not make your brand visible. People may know that you exist, but they might not know what you offer. With programmatic advertising, however; you can get your brand out there and let people know what you offer.
6. Programmatic Advertising Creates Better Results
Traditional advertising can create a lot of noise. This can cause people to ignore your message. If you want to get attention, then you should use programmatic advertising. This way, you can get people’s attention and drive them towards your website.
7. Programmatic Advertising Gives Consumers Control Over Their Experience
Traditional advertising is controlled by advertisers. Consumers do not have any control over how they experience ads. With programmatic advertising though, consumers can choose whether they want to view ads or not.
Disadvantages of Programmatic Advertising
- The first disadvantage of television advertising is that it is not interactive. You cannot talk back to the advertiser or ask questions about their product. In fact, you cannot even change channels without stopping the ad.
- Another drawback is that advertisers pay for the time that the viewer watches the commercial. If the viewer does not watch the entire commercial, then the advertiser did not get the full amount of money that he/she paid for.
Programmatic Advertising Platforms
There are many different platforms that offer programmatic advertising. These platforms allow users to create campaigns, manage budgets, and track performance. There are two types of platforms: those that work with publishers and those that work directly with advertisers. Some of these platforms included Demand-Side Platform (DSP) and Supply-Side Platform (SSP), Online Display Network (ODN), Real-Time Bidding (RTB), Mobile App Marketplaces and Automated bidding.
1. Demand Side Platform (DSP)
A demand side platform (DSP) works with publishers to sell advertising space. DSPs often have partnerships with search engines, social networks, and content sites. A DSP may charge a fee per impression, per click, or both.
2. Supply Side Platform (SSP)
An SSP works directly with advertisers to buy advertising inventory. An SSP does not work with publishers; instead, it connects advertisers with publishers who accept its offers. An SSP may charge a flat rate or a percentage of the cost of each transaction.
3. Online Display Network (ODN)
The ODN is a network of websites that share revenue generated from selling advertising. The ODN includes Google, Yahoo!, Bing, AOL, and others.
4. Real-Time Bidding (RTB)
Real-time bidding (RTB) is a method of buying digital advertising in real time. RTB uses marketplaces to connect buyers and sellers. Buyers submit requests to the marketplace using specific criteria. Sellers respond to these requests by offering their inventory. RTB is commonly used for mobile apps and video games.
5. Mobile App Marketplaces
Mobile app marketplaces provide a way for developers to distribute their applications to consumers. Developers can list their applications in the marketplace and set their own prices. Consumers can download the application and pay the developer directly.
6. Automated bidding
Automated bidding is a type of programmatic advertising where computers automatically bid on behalf of clients. These bids are determined by algorithms that analyze user behavior and search queries.
7. Google Ad Exchange
Google Ad Exchange is a program that allows advertisers to place ads on websites. When someone clicks on an ad, they are taken to the advertiser’s website where they can make a purchase. Advertisers bid on keywords to get their ads shown on certain websites. If an advertiser wins a bid, then they pay Google a fee per click.
How much does programmatic advertising cost?
There are many factors that determine the cost of programmatic advertising. One factor is the size of the audience. A larger audience means higher costs per impression (CPM). Another factor is the number of impressions. More impressions mean more money spent. Finally, the type of platform determines the price. Platforms like Facebook and Google charge a lot less than those who only advertise on mobile apps.
Digital Advertising vs. Traditional Advertising vs Programmatic Advertising
Digital advertising is the are the newest way of advertising. These advertisements can be viewed on websites, blogs, social networks, forums, etc. Internet advertisements are interactive. You can click on links to websites where you can learn more information about the product. You can also comment on the website and leave feedback. You can also rate the website and give it a thumbs-up or thumbs-down. It is use to promote products and services. In the past, advertisers would create print ads and place them in newspapers or magazines. Now, they have the option of using online platforms to reach their target audience. Advertisers can choose between traditional methods and digital marketing strategies. Traditional advertising is still around today, but it’s being replaced by digital marketing.
Advertising is done through print publications, radio, television, billboards, etc. These advertisements are created by companies and placed in different locations where people can see them. When someone sees an advertisement, they may remember it later on. However, not everyone reads the same newspaper or watches the same TV show. Even these are not interactive. You cannot call the company and ask them any questions either. Also, you can ignore them or some people won’t see the advertisement..
In contrast to traditional advertising, programmatic advertising uses digital technology to display advertisements. An advertiser pays a company to display its ad on websites or apps. The company then displays the ad to whoever visits the website or app. If someone clicks on the ad, the advertiser pays the company again. This type of advertising is becoming increasingly popular among businesses.
In conclusion, there are many type of advertisement and each of them has its pros and cons. Advertisements should be chosen based on what type of audience you want to reach. If you want to reach a wide audience, then television advertisements may be best for you. If you want to target a specific group of people, then Programmatic Advertising and digital marketing may be best for your business.