What Is Programmatic Advertising? Definition of Programmatic Advertising, Programmatic Advertising Meaning and Concept

Programmatic advertising consists of offering, to each user/consumer, those ads adapted to their tastes, desires and needs at the right time. All this, through algorithms and new technologies.

The way and habits of consumption are changing and, at present, it is based on configuring personalized campaigns for each individual. All of this, instead of a single advertisement for a massive audience, as was the case until a few years ago.

Programmatic advertising tries to offer the advertisement of the product in which the user is interested, at the right time, in order to increase the conversion rate. It is not about offering a single ad to as many people as possible (for example, a TV ad or a billboard), as this increases visibility and reach, but not conversion. This is because most will not be interested in the product. However, by segmenting the audience according to their tastes, wants and needs, we will show the ad to a smaller audience, but who have some interest in the product or brand. This will increase the conversion to purchase ratio; The goal that every brand pursues.

With this type of advertising, it is about reaching the “perfect target”. The profile of the ideal consumer is no longer sought, but to categorize the public by segments of tastes, sociodemographic factors.

Getting to segment the audience according to their tastes and needs, as well as configuring tailored campaigns for them, is what is known as programmatic advertising.

This is usually done through real time bidding (RTB). In these, various agents and platforms bid for advertising space. Advertisers set the price they are willing to pay for each impression, based on the user's profile and the page's audience.

Scheduled advertising that massively personalizes

The massive use of the internet makes it possible to leave a trace of each user on the network. All this, according to your most recent searches, websites you access, at what times you connect, from what device, from where, if you access through social networks, other links or direct search, etc. In this sense, its presence in the network a long etcetera of parameters, which can be analyzed through technology based on artificial intelligence applied to business (business intelligence). To do this, the ability to analyze millions of data quickly and efficiently ( big data ) is used.

Every time "cookies" are accepted, we are accepting that certain browsing parameters are recorded on the websites we are on. With this trail, and the technology of programmatic algorithms, combined with SEM digital marketing strategies , we can study consumer trends, our goal being to offer personalized advertising for each user. That is, setting up a programmatic advertising campaign, or also known as "remarketing".

The advertising that appears to each consumer is normally decided in real-time auctions.

Now, the company buys audiences and not supports. In other words, you pay to offer an ad to a specific audience and not to advertise in a certain place or channel.

Advantages of programmatic advertising

These are the main advantages of programmatic advertising:

  • Connect with the right audience at the right time.
  • Transmit a message tailored to the needs and desires of the consumer in real time.
  • Increased conversion to sales. Although there are numerous metrics to analyze during the purchase process, the main ones in the conversion funnel are the following:
    • No. clicks on the ad / No. views.
    • Number of sales / Number of clicks on the ad.
    • Number of sales / Number of views .

Disadvantages of programmatic advertising

These are the main disadvantages of programmatic advertising:

  • On many occasions, users feel harassed by brands and find it annoying to see too many ads when they are on the internet. There are ad blocking systems of this type to prevent this intrusion.
  • The prices to bid to appear in the first positions of certain searches are too high and, on many occasions, it is not profitable for the company.

Examples of programmatic advertising

Browsing the internet we find numerous examples of remarketing or programmatic advertising.

  • If we have been looking for classic Spanish literature books, from that moment on, every time we surf the net, advertising banners will appear on the sides or in the header with offers of that type of book. They are remarketing advertising campaigns, that is, once you have shown interest in a certain product, they will show you ads related to your search for a certain time to encourage your purchase.
  • When we perform a search on Google and see how our words coincide with the first links that appear and these are indicated as "ads", it is not by chance. The company has paid to appear in the first positions of those searches. That is, you are paying for your ad to appear only to people interested in that topic.
  • Programmatic television: The birth of a new television adapted to the tastes and interests of each user and that can be consumed at the time you choose (Smart TV), is an opportunity to implement programmatic advertising on TV. In other words, ads are shown when they are watching TV based on their tastes and needs, just like on the web, but this time with TV format and support.

In this link we can see and understand how SEM positioning works and more examples related to this type of marketing.