Programmatic advertising has made advertising more efficient, transparent, and cost-effective. With programmatic advertising, you can bid on ad inventory in real-time. However, bidding on traffic requires a proper process to ensure that you are getting the most out of your advertising budget. Programmatic continues to propel mobile advertising toward new efficiencies that enable better results for app marketers and developers alike.
Contents
- Understanding Programmatic Advertising
- Three Types of Programmatic Advertising
- What is RTB (real-time bidding)?
- How to set up bidding?
- Process of Bidding
- Key Advantages of Programmatic Advertising
- Key Programmatic Bidding Strategies
- Few Optimization Techniques to note
Understanding Programmatic Advertising
Programmatic advertising is automating the buying and selling of ad inventory in real-time using a technology called RTB (real-time bidding). Programmatic advertising platforms use sophisticated algorithms and machine learning to buy and sell ad inventory on behalf of advertisers. Real-time bidding (RTB) is a subcategory of programmatic media buying.
Three Types of Programmatic Advertising
Programmatic offers three main ways for advertisers to find the right media inventory for their ads.
Open Marketplaces (OMP):
The open marketplace is a type of Programmatic advertising where all the Publishers and Advertisers participating in bidding in real-time by auction mechanism. Sellers set a fixed price for an inventory and open it to the marketplace and buyers with the same requirement can buy the impression in real time. This model usually works on the impression to impression basis.
Private Marketplaces(PMP):
In a Private Marketplace (PMP) advertising type, the auction happens privately, which means the Sellers before opening their inventory to Open Marketplace, reserve a certain inventory to specific Buyers at a fixed rate.
Programmatic Direct/Programmatic Guaranteed:
Programmatic Direct or Programmatic Guaranteed is similar to a traditional way of buying and selling inventory. However, this happens through a proper channel. The impressions and CPM are guaranteed. The ad servers can only book this campaign if the agreed inventory is available. There are very few chances of under delivery
What is RTB (real-time bidding)?
Real-time bidding is the mechanism of buying and selling inventory in real-time on impression to impression basis through auction. This mechanism is very effective, as there is no human invention and both parties have access to real-time data
Three important players of RTB are a Supply-side Platform (SSP), a Demand Side platform(DSP), and an Ad Exchange
How to set up bidding?
Before you start bidding on traffic in a programmatic platform, you need to understand your brand positioning, advertising goals, target audience, and budget. Your advertising objectives should align with your business goals. For example, if your business goal is to increase brand awareness, your advertising objective might be to reach as many audiences as possible.
Your target audience is the people most likely to be interested in your product or service. To identify your target audience, you need to perform market research, analyze your customer data, and create customer personas. Once you have identified your target audience, you can use programmatic advertising to reach them with relevant adverts.
Your budget is the amount of money you are willing to spend on programmatic advertising. Your budget should be realistic and aligned with your advertising objectives. You should also consider the cost of bidding on traffic in a programmatic platform. Programmatic advertising platforms charge a fee for each impression, click, or conversion.
Process of Bidding
Once you have set up your bidding account, you need to create a bidding strategy that aligns with your advertising objectives, target audience, and budget. Your bidding strategy should be based on the following factors:
- Ad format: The type of ad format you choose will affect your bidding strategy. For example, if you bid on display ads, your bidding strategy might be based on the cost per thousand impressions (CPM). If you bid on video ads, your bidding strategy might be based on the cost per completed view (CPCV), etc.
- Targeting: Your targeting strategy will impact your bidding strategy. For example, if you are targeting a narrow audience, your bidding strategy might be more aggressive. If you are targeting a broad audience, your bidding strategy might be more conservative. Depending on the aggressive or conservative strategy you apply your CPM price increases/decreases.
- Ad placement: The placement of your ad will impact your bidding strategy. Eg., if you want your ad to appear at the top of the page, your bidding strategy might be more aggressive. If you are willing to accept a lower ad placement, your bidding strategy might be more conservative.
- Real-time data: Real-time data can help you adjust your bidding strategy in real-time. For example, if you notice that your ad is performing well, you might increase your bid to get more impressions. If you notice that your ad is not performing well, you might decrease your bid to save money.
- Sites: You should always keep an eye on which sites your ads are delivering. For example, you don’t want your ads to be delivered on low-quality sites, which might impact your KPIs of the campaigns. Recommend to periodically validate and whitelist/blacklist the sites based on the performance
Key Advantages of Programmatic Advertising
- Advanced targeting capabilities – The most revolutionary aspect of programmatic buying is that it allows advertisers to serve a specific ad to a specific audience. Advertisers can precisely determine which audience gets to see which ad and when.
- Automation – Digital ads are bought and sold in an automated manner in real-time and the process does not rely on manual insertion orders and manual trading.
- Saving time and money – Traditional deals require a manual campaign setup which makes the process slow and prone to human error. With programmatic advertising, the publisher does not have to set up any campaigns. Both parties also save time on negotiating prices – in programmatic, inventory prices are decided in real-time through an auction where various publishers and/or advertisers can participate.
Key Programmatic Bidding Strategies
Automated Bidding: Automated bidding uses machine learning algorithms to adjust bids in real-time based on past data, such as click-through rate (CTR), conversion rate, and cost per acquisition (CPA). Automated bidding allows advertisers to optimize bids for each impression and increase return on investment.
Manual Bidding: Manual bidding allows advertisers to set bids based on their advertising objectives, target audience, and budget. Manual bidding gives advertisers more control over their advertising campaigns, but it requires more time and effort to adjust bids in real-time.
Rule-Based Bidding: Rule-based bidding allows advertisers to set rules to adjust bids based on specific criteria, such as time of day, day of the week, and audience segment. Rule-based bidding allows advertisers to optimize bids for specific scenarios and reduce wasted ad spend.
Few Optimization Techniques to note
Audience Segmentation: Audience segmentation allows advertisers to target specific audiences based on demographics, behavior, interests, and location. Audience segmentation can help advertisers optimize their bids for each audience segment and improve ROI. If a brand has first-party audiences, it is always suggested to integrate into the respective programmatic platform, so you can target audiences accordingly. For example, if you observe a certain set of audiences are not engaging as intended, but you still want to deliver ads as there are your potential customer, split your campaign into multiple strategies/tactics/line items and put them on the lower bid and increase bids on who are engaging
Ad Format Optimization: Ad format optimization allows advertisers to test different ad formats, such as display ads, video ads, and native ads, to identify the best-performing format. Always recommended to perform A/B testing to analyze which creative and landing page is performing better. Do not run the same creative for a long time as this might result in lower engagement rates as audiences have already seen the ad multiple times already.
Frequency Capping: Frequency capping allows advertisers to limit the number of times a user sees their ad. Frequency capping can help advertisers optimize their bids and reduce ad fatigue, which can lead to higher engagement rates and conversions.
Real-Time Optimization: Real-time optimization allows advertisers to adjust their bids in real-time based on real-time data, such as ad performance, audience behavior, and market trends. Real-time optimization can help advertisers optimize their bids for each impression and improve ROI.
Sitelist Optimization: Sitelist optimization allows advertisers to blacklist/whitelist sites based on user engagement and performance (CTR, CPA, Impressions etc). For example, if a campaign has delivered on 1000 sites, out of which 200 sites have more impressions delivering and less performance. It is always advised to blacklist them so the ad doesn’t deliver on such sites. A periodic check (usually weekly) is a must to perform this activity. Few platforms provide an option for a universal blacklist/whitelist which applies to all your campaigns
Conclusion:
Bidding on traffic in a programmatic platform requires a proper process to ensure that you are getting the most out of your advertising budget. Before you start bidding, you need to understand your advertising objectives, target audience, and budget. Once you have set up your bidding, you need to create a bidding strategy that aligns with your advertising objectives, target audience, and budget. Your bidding strategy should be based on the ad format, targeting, ad placement, real-time data, and Sites where is it delivered. By following these steps, you can ensure that you are getting the most out of your programmatic advertising campaigns.