The Magic and Mystery of Programmatic Advertising

Take some of the guesswork out of your digital advertising with artificial intelligence.
Programmatic_Advertising

“Any sufficiently advanced technology is equivalent to magic.”
—Sir Arthur C. Clarke

According to industry reports, programmatic advertising will make up more than 50% of all digital ad sales by the end of this year. Which begs the question: Why the rapid growth?

Many online marketers find that some of the digital advertising channels they’ve been using don’t always yield the return they were hoping for. While spend for digital advertising has been increasing in the recent years, consumer trends are causing headaches for companies trying to get in front of their audiences online. With more people watching and using live video feeds (which as of yet does not have an effective advertising model attached), an increase of 30% in the usage of ad blockers, and thought leadership marketing continuing to rise, many B2B marketers are looking for better ways to spend advertising dollars.

If this describes the boat you’re in, it may be time to source new digital advertising options. It may be time for you to take a closer look at the trend and consider switching to a programmatic advertising solution.

In the simplest sense, programmatic advertising is software that helps automate the media buying process (specifically during the placement and decision-making phases), by targeting sites and networks based off pre-determined demographic and psychographic parameters. Programmatic ads are placed using artificial intelligence and real-time bidding (RTB) and can be used in online display, social media advertising, mobile, and video campaigns.

In this article, I will break down the pros and cons of programmatic advertising for industrials as well as list out some common programmatic advertising services to aid in future research should you decided to pursue a programmatic advertising solution.

Programmatic Advertising Pros

Despite the prevalence of programmatic advertising, many in the industrial sector don’t know all that much about the field, which appears to them to be a strange concoction of magic and sentient machines. While it can often seem like programmatic advertising involves a little bit of both, the truth is a lot simpler, at least in principle.

Here are the main benefits of programmatic advertising:

1. Big Data, Big Problems

One of the first, and most readily-apparent, benefits of programmatic advertising is its ability to cut through all the noise and data that exists for online advertisers trying to connect to their audiences. Specifically within industrial B2Bs, targeting is of utmost importance. Industrial advertisers can’t simply throw their messaging in front of everyone but rather need to hit very specific audiences of buyers. With more than 41,000 ZIP Codes in the United States and hundreds of publication options, it’s nearly impossible for any one person to scour through the data to always be finding the best mix for every budget. Programmatic advertising sidesteps this issue by leveraging artificial intelligence to do the heavy lifting on the data side, analyzing both site information and user behavior to find the most opportunistic places for ads to show, leaving the marketers’ jobs squarely in the setup and optimization phases.

2. Speed and Timing

Bidding management can be a nightmare for industrial marketers. Trying to stay on top of which keywords are being searched most often during which seasons for which industries, etc., can lead to wasted ad spend and a lot of time lost. Using the algorithms built into programmatic advertising services, bidding is done in real time (RTB), cutting down on wasted spend and always placing targeted ads in front of buyers without the guesswork of past efforts.

3. Fraud Prevention

The prevalence of advertising fraud nowadays is staggering. Some reports say that as much as $16.4 billion was lost to bots and improper placements in 2016 alone. Programmatic advertising solution providers have been working on this problem for years. Most programmatic advertising algorithms can pick up on fraudulent clicking patterns, prompting them to discard outlets that exhibit them. If digital ad fraud prevention is of concern, programmatic advertising is probably your best bet to avoid it.

Programmatic Advertising Cons

With every new step toward progress, there will always be some bumps in the road. No marketing tactic is perfect and every advertising model on the planet has negatives alongside its positives.

What follows are some cons of using programmatic advertising:

1. Audience Saturation

Early adopters of programmatic advertising had the run of the schoolyard for a long time while everyone else tuned into the new trend. Given the impressive adoption rate of programmatic advertising models in recent years and the influx of new platforms, marketplaces are becoming more populated, which makes it more difficult to run successful campaigns. With increased audiences and options comes more competitive bidding, making it necessary to still manually manage all programmatic systems for the best results.

2. Low Click-Through Rates

Low click-through rates aren’t unique to programmatic advertising, but since a primary channel for programmatic systems are banner ad networks, programmatic programs are dragged down by the general decline of the banner ad. Recent studies have shown banner ad click-through rates hovering around 0.05%, which is quite low. While this can work for brand awareness awareness campaigns, most industrials focus on lead generation, which isn’t always best served by the low click-through rates for banner ads.

3. It Can Be Expensive

Spending money on advertising is always kind of a gamble. The famous quote from John Wanamaker (“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”) continues to ring true. As with many advanced ad programs, programmatic advertising can come with a high price tag, but many find the investment worth it.

Programmatic Advertising Providers

At this point, you may or may not be convinced that programmatic advertising is the way to go for your business. For those of you who are curious and want to dive a bit deeper into the specific platforms to see what they offer, we have put together a list of the most respected programmatic advertising systems available today (listed in no particular order).

Google DoubleClick Bid Manager

Google is a staple in the digital advertising world. It’s rare to meet an online marketer who hasn’t used AdWords or some other advertising service provided by the search giant. DoubleClick Bid Manager takes all the great things about Google’s data and packages it up in a programmatic ad manager that allows for cross-screen targeting, real-time insights, video placements, and couples that with direct access to Google’s DoubleClick ad exchange. For those already familiar with Google’s advertising systems, this may be the easiest entry point into the programmatic advertising world.

CHOOZLE

We selected CHOOZLE because it’s easy to use and has a low cost of entry. Plans start at as low as $99 per month. CHOOZLE can target users based on demographics, psychographics, purchase behaviors, and B2B information, which is powered by many industry-leading third-party data partners. CHOOZLE is a great choice for those familiar with Google AdWords and the best-practice methodologies of digital advertising.

PocketMath

PocketMath is more focused on small-to-midsize companies. Designed for people who like to be more hands-on with their bidding and optimization, this platform requires that advertisers use their own creative, unlike some platforms that will create ads for you. One final benefit for PocketMath users is that the system has no minimum spending requirements, so it can fit most budgets.

Simpli-Fi

This might be the most powerful provider on this list, but it is also one of the most expensive. The required spend with Simpli-Fi is $10,000 per month, but its targeting mechanisms allow you to drill down to city blocks and extremely detailed searching behavior. Simpli-Fi also offers a service in which their team will manage ads for you and work with you to hit your goals. You may dish out some extra cash for this service, but you’ll see results.

ReTargeter

ReTargeter’s biggest selling point is that it is a “self-optimizing” retargeting platform built for small businesses. It also integrates with a lot of the major ad exchanges such as DoubleClick, OpenX, Rubicon, and others, so its targeting demographics are pretty trustworthy. With a minimum monthly spend of $500, it has a lower cost of entry than most, and it also lets you retarget people across Facebook and boasts a world-class account management practice to help advertisers get the most out of their systems.

Conclusion

Whether or not you were familiar with programmatic advertising coming into this article, it’s a growing trend and something to keep your eyes on in the coming years. It can sometimes feel like magic, but isn’t that what all great technology is supposed to feel like, to some degree?

Online advertising management is a tough and complex channel, especially for industrials. If we can be of any assistance or if you need the guidance of expert hands, feel free to reach out and contact us directly for help.

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About the Author

Joey Strawn


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