What Is Programmatic Advertising?

Programmatic Advertising is the process of buying ad space with AI and real-time bidding. It allows businesses to reach their target audience by purchasing ad impressions on websites and ads through an automated bidding system. 

Don’t worry; you are not the one sitting there, waiting for a space to become available – the work is done for you by the demand side platform (DSP) you’re using. For example, if you use Facebook for your ad campaigns, Facebook Ads acts as the DSP.

If everything I’ve said above sounds like gibberish to you right now, don’t worry. It sounds like gibberish to me, too… 😅 But that is why we are here together to get to the bottom of this. Literally. 

So, let’s dig deeper. By the end of this article, both you and I will have a clear understanding of programmatic advertising, what it can do for your info product business, and how to implement it into your marketing strategy. 

How Does Programmatic Advertising Work?

Programmatic advertising relies on software and algorithms to bid on ad space and place relevant ads into that space – this ensures the correct ad reaches the correct user at the right time. 

Let’s break it down. 

When someone visits a website or app where ad space is available, the site or app sends a request to an ad exchange (an online marketplace to buy and sell ad space in real-time). 

Then, the bid is based on user data, such as behavior, interests, and demographics (age, location, etc.). The ad exchange then selects the highest bidder, and their ad is instantly placed in the available space. 

While it might sound like a complex process (which it is on the backend of things), our technology is so advanced that this process happens before the webpage or app even loads. Isn’t that fascinating? 😯

Let’s explore some key components of programmatic advertising. ⬇️

• Demand-Side Platform (DSP): This helps advertisers buy ad placements on multiple platforms and uses AI to place bids.
  
  Some examples of DSPs include GoogleDV360, Facebook Ads Manager, and Xandr.
  
  
• Supply-Side Platform (SSP): This allows website or app owners to sell ad space to advertisers.
  
  A popular SSP is Google Ad Manager.
  
  
• Ad Exchange: The marketplace that connects DSPs and SSPs and assists both with real-time bidding auctions.
  
  Examples of ad exchanges include Google AdX and Index Exchange.
  
  
• DMP, CMP, And Ad Servers: The Data Management Platform (DMP), The Creative Management Platform (CMP), and the servers.
  
  DMP is the brain of the operation: it collects and analyzes user data to improve ad targeting. It can also identify users who did not complete the call-to-action (CTA) and retarget them in the future.
  
  CMP is the ad builder – it creates different versions of dynamic, personalized ads and presents different variations of those ads depending on user behavior.
  
  Ad Servers are the delivery guys. They store and deliver ads to the correct websites, apps, and devices.
  
  
• The Optimizer: AI and machine learning optimize this process. They ensure continuous adjustments in bidding strategies for better results. 
  
  

Why Implement Programmatic Advertising?

Programmatic advertising is one of the most effective ways to promote your info product business. Here’s why:

• AI-Powered Precision Targeting: Programmatic advertising uses contextual, demographic, behavioral, and intent-based data to target a specific audience by tracking user interactions on various platforms, like social media, websites, and mobile apps.
  
  
• Cost-Effective Real-Time Bidding (RTB): RTB saves money. AI optimizes bids in real time, ensuring you pay the best price. The bids are optimized based on performance, which lowers your cost-per-click (CPC).
  
  
• Omnichannel Advertising: Programmatic advertising ensures that your ads are visible on multiple channels and reach your audience wherever they are active. This not only increases your exposure but also creates a seamless brand experience.
  
  
• Dynamic Retargeting: The technology behind programmatic advertising can track the audience who did not click on the ad or complete the purchase or whatever call-to-action (CTA) and retarget them with different ads later on.
  
  Dynamic retargeting ensures the user sees a similar ad but, perhaps, with a limited-time discount. Such retargeting increases your engagement and conversion rates by over 20%.
  
  
• Scalability: AI automates everything, from bidding to placements and optimization. It helps you reach large audiences without any extra manual effort.
  
  You can reap massive results without putting in extra work, which increases your return on investment (ROI).
  
  

Implementing Programmatic Advertising – Pro Tips

Let’s explore some pro tips on how to effectively implement programmatic advertising into your marketing strategy.

• Set Clear Goals: What is your goal with your ad campaign? Are you looking to improve brand awareness, generate leads, or increase conversions?
  
  It is important to define your objectives before launching any ad campaigns; otherwise, you are just wasting money and crossing your fingers for undefined results. 
  
  
• Choose Your DSP: Your DSP is the doorway between your ad and your audience.
  
  Based on the preferred platform of your audience, you should be able to define your ad platform.
  
  There are several types of DSPs: self-serve (like Google DV360 and Xandr), managed ones (which are best for higher budgets), and social ones (like Facebook Ads, YouTube Ads, and TikTok Ads).
  
  
• Set Up Your Bidding Strategy: Figure out what kind of strategy will give you the highest return on investment (ROI). Read this quick article on performance marketing to help you make your decision.
  
  
• Leverage Native Advertising: Native ads blend into the rest of the content. They feel natural and less intrusive, which makes the user more inclined to click on them. This increases engagement and retention rates, boosting your conversions.
  
  
• Leverage Advanced Targeting: Ensure that your ads reach users who search for similar topics and express interest in your niche. Remember to include lookalike audience as well.
  
  Don’t give up on those who did not engage with your ad the first time. Instead, retarget them with different ad creatives and better offers. 
  
  

Closing Remarks

Hopefully, now that we are “at the bottom” of this, you have a clear understanding of programmatic advertising and why it would be effective for your info product business. (I know I do.)

So, to recap, programmatic advertising uses AI and real-time bidding (RTB) to purchase ad space wherever it is available to display your highly targeted ads. The goal is for your ad to reach the right user at the right time.

Programmatic advertising can help you target a specific audience, increase your brand awareness, boost your conversions, and scale your business effectively and efficiently. 

The good news is that most of the work is done by artificial intelligence, so once you set everything up, all you have to do is monitor ad performance and adjust ad creatives accordingly. The placements, the bidding, and the retargeting are done for you.

On that note, subscribe to Vavoza Insider and stay tuned for more helpful marketing topics!

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– Steph