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5 Reasons Why Digital Marketing Agencies Are Using Programmatic Advertising

Programmatic Display Advertising, or Programmatic Advertising, is not some new digital marketing trend or advertising technology, but a slow-rolling earthquake that’s shaken everything up.

The future of digital marketing has been Programmatic for so long it’s hard to determine when the future became the present, but what can be said with certainty is that a Programmatic Advertising Strategy is the most dominant force in digital marketing. Statista projects that 2021’s programmatic ad buys may hit $127 billion, which is $35 billion more than predictions made just several years ago, driven by the ever-increasing use of social media platforms, mobile platforms, and multimedia content such as video. Other recent reports from industry trackers state that revenue from programmatic ad buys now 80% of all digital display advertising revenues. 

What is Digital Programmatic Display Advertising?

Programmatic Display Advertising is everything a digital marketer needs to grow its brand and reach its audience – targeted, multi-channeled, and automated. Programmatic Display Advertising uses technology to purchase and manage digital ad spaces like over the top (OTT), social networks, mobile, digital video, and display and gives the brand an advanced level of control and increased levels of security. As digital ad spaces multiply, governing large digital marketing campaigns becomes more complex and laborious. Leveraging technology to automate complex functions, programmatic campaigns give marketers the tools to gain visibility and actionable insight into their target audience and the freedom to unleash their digital strategies.

 How does Digital Programmatic Display Advertising work?

While Programmatic Display Advertising may seem complex, the process is simple and straightforward. 

1.  You buy ad space through an ad exchange (e.g., Google Ad Exchange, AdSense, or Microsoft Advertising).

2. Using real-time bidding software (RTB), you bid for digital ad spaces against other marketers. Just like any other auction, the highest bidder wins. If you want to automate bidding over multiple channels, demand-side provider software (DSP) can be employed. 

3. Each time the ad is displayed, you pay.

These are the top five reasons advertising agencies are making programmatic ad buying a significant part of their media mix.

#1: Artificial Intelligence (AI)

AI is the driving force behind Programmatic Advertising’s remarkable features and what makes it such a digital marketing success story. Companies can more cost-effectively leverage their consumer data and connect with an audience that is ready to buy their product. Multi-channel, real-time reporting, granular targeting options, and budget and spend optimization are all built into an AI system that is constantly improving itself to meet the business objectives the company sets. Better reporting, ad fraud protection, and brand safety are just several areas in programmatic advertising’s AI-centered capabilities that have resulted in major systemic improvements over traditional media buys.  For example, programmatic advertising software can block fraudulent bots, prevent your ad from running next to undesirable content that may be hurtful to your brand, and return real-time reporting data on campaign effectiveness that can be optimized to increase your reach, connect with more customers, and grow your business.

#2: Targeting

By far, the most significant characteristic of Programmatic Display Advertising is its ability to break down the barriers that traditionally separate a marketing team from its target audience. Instead of casting a wide net and pulling up plastic bottles, tires, and coat hangers with your prize lobsters, you’re sending out millions of fishing lines at once, each with its own unique “smart lure” custom made to hone in on one individual customer. Targeting methods allow marketers to reach the exact audiences they want to reach at a fraction of the price and at a scale previously unimaginable. Layers can be location, demographics, metadata, interests, education, or gender, or any other relevant identifier. With this increased insight and smart strategic planning, targeted ads can be more relevant, contextual, and organic. Ads that are disruptive to the user’s regular behavior (e.g., auto-play ads) or infringe on user privacy leave a negative impression, impair the user experience and may dilute attempts to build a strong brand. With increased, more personalized targeting, there is less wasteful advertising and more control over to whom your ad is displayed.  Brands executing their digital marketing strategy with programmatic campaigns have more demonstrable success reaching who they want, how they want when they want. 

#3: Multichannel Automation

Automating your digital advertising campaigns across multiple digital channels benefits the management of online marketing in so many obvious ways. It reduces human error, eliminates manual time-consuming processes, and boosts online visibility. Programmatic Buying far surpasses the reach of traditional online advertising channels such as AdWords and Bing as they only display your ads on their network of sites. For example, when you run a programmatic advertising campaign on AdWords, your ads will only be seen on websites that are part of the Google Display Network. Programmatic Buying pushes your high-quality content across Google, Facebook Advertising, social media channels, Smart TV, and any other programmatic advertising platforms that align with your digital marketing efforts. Another power of the programmatic ad campaign is the sheer scope of its scalability to increase your online presence. The power of programmatic allows you to reach, or even retarget, a vast number of internet users wherever they may go. 

#4: Real-Time Flexibility

One of the most powerful tools of Programmatic Display Advertising is its real-time functionality – whether it’s real-time bidding on advertising space during a real-time auction, reporting that gives valuable insights into user interests, projections, spending trends, measuring a campaign’s performance, or making adjustments as ads run, the real-time abilities of programmatic platforms give marketers a competitive edge. They can proactively build and improve their online presence and marketing efforts instead of waiting until the end to see what worked. Gone are after-action reports. Now real-time optimization is the standard. This added freedom comes with an extra degree of complexity, but managing a suite of mission objectives in real-time empowers brands to be nimble and adaptive to a rapidly changing marketplace.

#5. ROI

For the above reasons and more, Programmatic Display Advertising maximizes conversion rates and ROI. An automated, multi-channel, AI-driven ad run with real-time flexibility eliminates a bloated layer of intermediaries and human negotiations (up to 60% of a digital marketing budget), thereby reducing unnecessary overhead, allowing marketing dollars to be spent in a more intelligent and effective manner. This means an impressive return on investment. Programmatic marketing is so cost-efficient in comparison to traditional marketing; even a modest budget can produce exemplary results. There is little wonder why Digital Agencies are committing more and more of their overall digital marketing budget to Programmatic Advertising Campaigns. With its endless feedback loop of real-time rich customer data and optimization recommendations, ad runs can be tested, measured, and refined while producing greater returns. With cost transparency, ad campaigns can be designed to target impressions to the most actionable people, and savings can be reinvested into the marketing plan.

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