Introduction
By 2026, programmatically sold advertising will reach 725 billion US dollars worldwide. [Statista] Due to its flexible nature and increased ad effectiveness, plus the rapid rise in connected TV advertising, programmatic advertising has been firmly established as one of the most powerful tools in digital marketing. How does programmatic advertising work and how can you leverage it to garner success?
In this blog post, we will break down types of programmatic advertising and provide the best examples, actionable insights and tips to drive campaign results.
Types of Programmatic Advertising
Here are the main types of programmatic advertising:
Real-time Bidding (RTB)
Real-time bidding (RTB) programmatic advertising is an open auction for advertisers and publishers where the inventory price is agreed upon in real time. Here, the highest bid wins.
Real-time bidding is advantageous for both advertisers and publishers. For advertisers, it helps them target relevant inventory - thereby increasing ROI on their ad spend.
For publishers, it allows them to collect data on bidders' purchase patterns and set prices for their premium placements accordingly.
These reasons make real-time bidding the most popular type of programmatic advertising.
Preferred Deal
Preferred deal programmatic advertising occurs when publishers sell their premium inventory in a one-on-one programmatic auction at a set CPM (cost-per-mille) price to a selected group of advertisers.
This type of deal allows for transparency between buyers and sellers - publishers are able to view the inventory before the ad runs, thus controlling the quality of the content while advertisers can take charge of inventory pricing.
Private Marketplace (PMP)
Private marketplace (PMP) programmatic advertising are auctions where only specific advertisers can bid, which are identified through a selection process set by the publisher.
Advertisers who want access to premium inventories before they become available to the open marketplace will prefer PMPs. This marketplace also offers a much closer relationship with publishers than with RTB.
Programmatic Direct
In the case of programmatic direct, a publisher sends an advertiser an invite to buy their inventory directly without a bidding process. This means media inventory is sold at a negotiated price, usually CPM-based, to advertisers for a set time period.
Due to the nature of exclusivity and specificity of programmatic direct media buying, it is particularly useful to companies focusing on premium placements and brand safety. But note that advertisers must have a big budget to use this method.
How to Create an Efficient Programmatic Ad Campaign
While each company is unique and can't utilize a "one size fits all" sort of approach, these are the key components of successful programmatic ad campaigns:
1. Creative Ads
The point of any programmatic ad campaign is to attract attention, and what better way to do that than with a creative ad?
Whether it's through a catchy slogan, colors that pop or a unique picture that makes a user look twice, unique ads are key to getting an audience and, hopefully, converting them.
While it may seem obvious, don't rush through the creative process when setting up your programmatic campaign.
2. Campaign Budget
Private marketplace (PMP) programmatic advertising are auctions where only specific advertisers can bid, which are identified through a selection process set by the publisher.
3. Measurable Goals
Maybe we sound like a broken record on this one, but there's no point in running a programmatic ad if you don't know what you're looking to get out of it.
Come up with a measurable and realistic goal, then determine which KPIs you'll need to track to see whether or not your campaign is successful.
Some KPIs you may want to track include Return on Ad Spend, Cost-Per-Click and Bounce Rate.
Examples of Programmatic Advertising
Below are key success stories of effective programmatic ads.
Programmatic Advertising Example 1: The Economist
To increase its readership, The Economist was looking to reach different target audience segments with ads on topics they would be interested in.
After analyzing its extensive target audience data, The Economist segmented its audience into Finance, Politics, Economics, Good Deeds, Careers, Technology and Social Justice.
With these segments in mind, The Economist created 60 programmatic ads that spoke to different preferences and persuaded reluctant readers to subscribe to the magazine.
This proved to be a successful programmatic ad campaign and generated the following results:
- 6 million unique actions
- 1 million unique website viewers
- $650,000 in ad revenue
- 10:1 campaign ROI
Programmatic Advertising Example 2: O2
To make ads more interesting for its target audience, mobile network operator O2 repurposed its TV ads and created audience segments that would be more tailored to different groups of people.
More than 1,000 versions of the programmatic ad were made, allowing a personalized ad to be served to each user.
The programmatic ads yielded the following results:
- 128% better click-through rate
- Increased brand awareness
Programmatic Advertising Example 3: Google
To increase the effectiveness of its ad campaigns, Google adopted programmatic marketing in 2014 with a focus on its Google Search App.
Google leveraged first- and third-party data to reach the most valuable target audience segments and optimized its ad campaigns in real time, recycling data to improve its campaign strategy.
The ad campaign was a roaring success:
- 50% increase in brand awareness
- 30% more people reached three times more frequently
- 30% lower CPM compared to the previous year
Programmatic Advertising Example 4: Kellogg's
Kellogg's adopted programmatic advertising to increase viewability and frequency of its brand messaging in order to boost offline sales.
These hyper-targeted ads worked to inspire audiences and drive results.
Due to these programmatic ads, Kellogg's was able to pull in the results below:
- 70% increase in viewability rates
- 2X to 3X better audience targeting
Programmatic Advertising Example 5: AirAsia
To increase trust in its brand and to drive ticket sales, AirAsia launched a Facebook programmatic ad campaign.
The ad campaign targeted both frequent AirAsia customers as well as those travelers who hadn't flown on AirAsia since 2014 (when one of the planes had crashed).
Each target audience received a different ad, which featured unique creatives.
Overall, the ad campaign worked well, generating the following results:
- 30X ROAS
- 58X ROAS when using Facebook’s Lookalike Audiences
- 17-point lift in ad recall
Programmatic Advertising Example 6: Audi
To prepare for the launch of its customizable vehicle, world-renowned automotive brand Audi set itself the aim of further personalizing its programmatic marketing efforts and crafting a campaign that lived up to its iconic slogan, ‘Vorsprung durch Technik’ (‘Advancement through Technology’).
Working in close collaboration with Google using Display and Video 360, Audi took a data-driven approach that combined all customer data to optimize its most valuable consumer touch points.
Campaign Result:
- Audi's programmatic ad had a 4x conversion rate
Programmatic Advertising Trends
In-House Programmatic Ad Campaigns
According to the Interactive Advertising Bureau (IAB), more than 69% of marketers have brought their programmatic advertising campaigns in-house.
In-house programmatic campaigns increase cost efficiency, resource efficiency and increase transparency. All of this together can lead to a higher return on ad spend (ROAS).
First-Party Data & Moving Away from Cookies
As marketers lose the ability to track consumers and collect third-party cookie data, they have to find new, reliable workarounds for the programmatic advertising process.
This is where first-party data comes in - offering tremendous value to both advertisers and publishers by honing in on consumer interests and preferences to help deliver the most effective ad messaging.
Growth in Connected TV (CTV)
CTV programmatic display ad spending in the US is projected to grow from $6.93 billion in 2021 to $8.88 billion in 2022. [Statista]
Such growth in investment coupled with a rapid increase in streaming service customers makes CTV one of the most valuable programmatic advertising trends.
Advancement in Digital Out of Home (DOOH) Ads
With the pandemic coming to a close, target consumers are back on the go and more digital screens are popping up all over the country.
This is allowing programmatic advertising to take a big chunk of the DOOH market share.
This type of programmatic ads have a number of benefits including broad reach, resistance to ad blockers and unobtrusive placements.
Increase in White Label Software
A white label software is a generic piece of software built and marketed as a service to businesses.
For many companies seeking programmatic control over their campaigns, the white label software as a service (SaaS) is a great affordable starting point to eventually bring their campaigns in-house.
Programmatic Audio
Programmatic audio advertising automates the sale of ads in audio content and can be bought from audio publishers via a single platform.
Audio ads do not rely on visual engagement and cannot be skipped or blocked - allowing them to reach consumers immediately with higher exposure.
Video Advertising Campaigns
Digital and online video remains the most popular media type for high-impact display ads.
Automated video ad buying is now the standard for distributing video ad commercials in the US.
Mobile Gaming
Mobile gamers will rise sharply from 1.8 billion to more than 2.3 billion by 2026 - making them a very lucrative audience to target via programmatic ads.
Ads can be integrated directly into the game by allowing users to win prizes by watching ads or they can appear at the bottom of a screen similar to traditional banner ads.
Contextual Advertising
The death of the cookie has brought contextual advertising to the forefront of programmatic advertising.
By leveraging contextual intelligence expertise, marketers can be sure that their ads will appear in relevant content within the page and align with user interest.
This will inspire action in consumers and push them to drive results.
Benefits of Programmatic Ads
Here are key benefits of programmatic advertising:
Transparency
Programmatic advertising allows advertisers to know exactly where their ads are being placed.
It also gives them insight into whether those ads are viewable and how they are performing.
Real-Time Measurement
Real-time measurement is a game-changer for marketers. It allows access to key data around the clock.
These metrics include click through rate (CTR), impressions, media cost, complete views, conversions, etc.
Efficiency
Automating the process of buying ad space eliminates human error and increases efficiency.
Campaigns can be optimized through machine learning applications to increase ROI and drive success.
Audience Targeting
Programmatic allows you to execute hyper-targeted ads to those consumers who you know are interested in your products and services.
The many targeting parameters available within a DSP help you pick and choose from the billions of impressions available across the real-time bidding ecosystem.
GumGum's Programmatic Ads
What is GumGum's Managed Programmatic?
GumGum’s Managed Programmatic offering utilizes the same inventory and unit types as GumGum’s Managed Service/Direct offering. Managed Programmatic is classified as any spend that comes from a DSP with a managed deal ID via 11+ managed programmatic DSPs—whether running custom creative or GumGum Standard/Display.
Our premium inventory is available programmatically and also through GumGum Managed Service/Direct exclusively.
GumGum's Channel-Agnostic Offerings
PROPRIETARY TECHNOLOGY
Verity™, the most sophisticated contextual intelligence for cookieless targeting and brand safety.
QUALITY INVENTORY
Quality inventory across thousands of trusted publisher sites.
EYE-CATCHING AD PRODUCTS
Ad products built to stand out and get attention.
To learn more about GumGum's programmatic offerings, click here.
Unique Benefits to Activate by Channel
You can launch a programmatic ad by:
Custom PMPs: Create a PMP to surround suitable and relevant content
Demand Side Platforms (DSPs): Activate through top and specialized DSPs
White Glove Service: Arm traders with avails and forecasting, implementation
walk-throughs, and proactive optimization suggestions
Easy Activation: Rapidly launch campaigns
Conclusion
Whether you are a small business just getting ready to launch for the first time or have been in the business for years and looking to stay on top of the latest trends, a strong programmatic ad campaign can get you good results.
To ensure your programmatic ad campaign is a success, target specific demographics, ensure you’re transparent, and measure results consistently.
