{"id":14146,"date":"2024-09-19T02:20:40","date_gmt":"2024-09-19T06:20:40","guid":{"rendered":"https:\/\/illumin.com\/?p=14146"},"modified":"2025-01-30T06:07:50","modified_gmt":"2025-01-30T11:07:50","slug":"guide-programmatic-advertising","status":"publish","type":"post","link":"https:\/\/illumin.com\/insights\/guides\/guide-programmatic-advertising\/","title":{"rendered":"Programmatic Advertising: The Ultimate Guide"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">For every business, being strategic and fully understanding the ins and outs of programmatic advertising before making the transition is critical for long-term success. You could have a brilliant ad, but the campaign will never reach the intended audience without the right strategy and the right targeting. This is where programmatic advertising shines when leveraged well.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Programmatic advertising can be found everywhere: from the websites you visit to the ads on YouTube \u2013 and even new formats like interstitial podcast ads or short clips on your connected television. The medium represented <\/span><a href=\"https:\/\/www.insiderintelligence.com\/content\/us-programmatic-digital-display-advertising-outlook-2021\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">over $96 billion<\/span><\/a><span style=\"font-weight: 400;\"> of digital display transactions in the US in 2021. This guide on programmatic advertising lays the groundwork for a successful programmatic campaign, telling you everything you need to know about how it works and how to leverage programmatic targeting for success.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is programmatic advertising?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The term programmatic refers to how digital ads are sold or bought and programmatic advertising is the process of using technology to automate several aspects of the ad purchasing process. It is more efficient to purchase this way and allows for stronger optimization of digital campaigns.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Programmatic advertising can be used to strategically plan and execute campaigns for specific audience segments, geographic locations, or across multiple channels like video, mobile, display, and <\/span><a href=\"https:\/\/illumin.com\/insights\/guides\/guide-connected-television-ctv\/\"><span style=\"font-weight: 400;\">Connected Television<\/span><\/a><span style=\"font-weight: 400;\"> (to name a few).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This methodology of planning and automating ad buying is effective for advertisers and brands irrespective of size since it does away with the \u201chit or miss\u201d results of traditional display advertising campaigns. With the strategic planning and adjustments made possible through programmatic, reliance and efficiency increase. Algorithms also help advertisers better understand the best way to spend their ad money.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Programmatic advertising works especially well when building a long-term connection with your audience. It gives advertisers the upper hand for scalability and optimization, helping them create iterative campaigns for improved results. With programmatic advertising, brands can place ads in relevant channels and target the appropriate audiences for better results and improved ROI.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some must-know programmatic terms are:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Demand-side platforms (DSP): <\/b><span style=\"font-weight: 400;\">Platforms that let media buyers automate and optimize digital ad space purchasing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Supply-side platforms (SSP): <\/b><span style=\"font-weight: 400;\">The other end of the spectrum \u2013 publishers use SSPs to manage and sell ad space on their own apps or websites.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">The benefits of programmatic advertising<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Programmatic advertising makes it easier for advertisers to access a broader ad space inventory and leverage effective audience targeting. Some key benefits of programmatic advertising include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reach larger audiences:<\/b><span style=\"font-weight: 400;\"> Advertisers can reach larger, more relevant groups than when purchasing ad inventory from several disparate sources.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increased flexibility: <\/b><span style=\"font-weight: 400;\">Advertisers and buyers can make adjustments to ad campaigns transparently and flexibly.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Better targeting: <\/b><span style=\"font-weight: 400;\">There is less wasted ad spend as targeting is more effective and weighed against impressions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Efficiency: <\/b><span style=\"font-weight: 400;\">Both sellers and buyers can achieve better returns on their respective investments.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">How does programmatic advertising work?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Programmatic advertising requires advertisers to have an automated, ongoing connection with publishers (those with ad space to sell). Through this connection, advertisers can manage ad inventory. This connection is made using software instead of individual, manual negotiations. Additionally, with programmatic advertising, advertisers can pay for ad impressions instead of paying a flat rate across all platforms. Advertisers can also leverage both sell-side and demand-side platforms to buy across open networks.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For programmatic advertising to work, advertisers need to properly manage their audience, placements, budget, bidding strategy, creatives, and assets. Companies need to mention and specify target audiences, interests, and other essential parameters when leveraging programmatic advertising. These parameters can include:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Demographics:<\/b><span style=\"font-weight: 400;\"> age, gender, location<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Interests:<\/b><span style=\"font-weight: 400;\"> medical news, new devices, health information, etc.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Devices:<\/b><span style=\"font-weight: 400;\"> laptops, desktop computers, tablets<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Behaviors: <\/b><span style=\"font-weight: 400;\">trends in the medical field\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Programmatic platforms like DSPs will use this data to target appropriate audiences. The DSP bids for ad spaces on relevant apps, publications, and websites in real time. Once the relevant audience starts reacting to ads, organizations can view core KPIs like sign-ups, click-throughs, and impressions.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Types of programmatic advertising<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Programmatic advertising is categorized based on how ad inventory is purchased. The most common forms of programmatic advertising are:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Real-time bidding:<\/b><span style=\"font-weight: 400;\"> Advertisers purchase ad space on an open marketplace. Ad auctions happen in real-time where millions of microtransactions can take less than 100 milliseconds to complete.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Preferred deals: <\/b><span style=\"font-weight: 400;\">In this type of programmatic advertising, advertisers can choose the ad spots they want before they go to an open or private marketplace.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Private marketplace: <\/b><span style=\"font-weight: 400;\">In a private marketplace, publishers set agreements with advertisers for ad space. This type of bidding lets websites set their ad space at the best price possible.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Programmatic guaranteed:<\/b><span style=\"font-weight: 400;\"> In this form of programmatic advertising, there is no bidding process. Instead, the ad placement process is automated. In this form of programmatic purchasing, both buyers and publishers can manage and regulate inventory.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Common methods for ad targeting with programmatic advertising<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Programmatic advertising is based on efficient targeting. Here are some common targeting methods:<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Audience targeting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ads are shown to audiences based on data and potential user interest. Cookies from websites may be used to gather this data for <\/span><a href=\"https:\/\/illumin.com\/insights\/guides\/audience-targeting-strategy\/\"><span style=\"font-weight: 400;\">relevant targeting<\/span><\/a><span style=\"font-weight: 400;\">, although there are <\/span><a href=\"https:\/\/illumin.com\/insights\/guides\/cookieless-marketing\/\"><span style=\"font-weight: 400;\">cookieless<\/span><\/a><span style=\"font-weight: 400;\"> data strategies that are gaining momentum. In practice, this means that when a targeted user visits your site, they will shown your ads later when scrolling YouTube or watching a streaming service.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Contextual targeting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In this form of targeting, ads are shown based on the website\u2019s <\/span><a href=\"https:\/\/illumin.com\/insights\/why-contextual-targeting-is-back-in-style-and-how-to-take-advantage\/\"><span style=\"font-weight: 400;\">context<\/span><\/a><span style=\"font-weight: 400;\"> and content. So if an advertiser is selling a health tech product, they might target users on health blogs, publications, or wellness-related platforms and apps.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Geotargeting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Brands can also target customers based on <\/span><a href=\"https:\/\/docs.google.com\/document\/d\/1vUbm0jMqp6MhTAhUVnYP7f5d3S8FUEqV6z2EBF9ofs4\/edit?usp=sharing\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">their location<\/span><\/a><span style=\"font-weight: 400;\">. Data from the current or past locations of users is used to target, ensuring the right customers are reached in the right places.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Keyword targeting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This form of ad targeting focuses on using specific <\/span><a href=\"https:\/\/illumin.com\/insights\/blog\/improve-google-ads-stronger-keywords\/\"><span style=\"font-weight: 400;\">keywords<\/span><\/a><span style=\"font-weight: 400;\"> to reach the right audience. This is very similar to contextual targeting and its execution is most often seen in search and <\/span><a href=\"https:\/\/illumin.com\/insights\/blog\/social-media-fits-into-programmatic\/\"><span style=\"font-weight: 400;\">social media<\/span><\/a><span style=\"font-weight: 400;\"> ads.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Retargeting<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This method refers to the act of re-engaging audiences who\u2019ve previously interacted with your brand. This can be through cookies or a tracking pixel.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What\u2019s next for programmatic advertising?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The future of programmatic advertising is vast given the strategy\u2019s potential. Many ad-tech companies are now turning to automation and artificial intelligence to build even greater efficiency into the media buying journey.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Automation\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Automation in programmatic advertising is already prevalent, however, advances in artificial intelligence technology have helped increase the efficiency, relevance, and profitability of ad placements. Big data insights, GPT-3, and augmented intelligence solutions will also continue to impact marketing automation initiatives.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">More than a demand-side platform\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There is disintermediation on both the DSP and SSP side of ad tech. There is also a paradigm shift in programmatic advertising with both platforms stepping into each other\u2019s traditional boundaries.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">For example: <\/span><\/i><span style=\"font-weight: 400;\">solutions like illumin focus on the entire <\/span><a href=\"https:\/\/illumin.com\/insights\/guides\/journey-advertising-guide\/\"><span style=\"font-weight: 400;\">consumer journey<\/span><\/a><span style=\"font-weight: 400;\"> to holistically enhance advertising outcomes. illumin offers media planning, media buying, real-time intelligence, and more all in one place, reducing marketing costs and enhancing desired business outcomes.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Increased personalization\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ad tech now requires high-level personalization and real-time measurement. It is going to continue to be essential to make decisions based on accurate data and insights \u2013 all while prioritizing user <\/span><a href=\"https:\/\/illumin.com\/insights\/blog\/data-privacy-top-concern-for-marketers\/\"><span style=\"font-weight: 400;\">privacy<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Artificial intelligence and machine learning\u00a0<\/span><\/h3>\n<p><a href=\"https:\/\/illumin.com\/insights\/blog\/ai-in-programmatic-advertising\/\"><span style=\"font-weight: 400;\">Artificial intelligence (AI)<\/span><\/a><span style=\"font-weight: 400;\"> is already used to find patterns, analyze actions, and predict future user behavior. AI can also be used to find the best times and locations to place ads.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Bottom line\u00a0<\/span><\/h2>\n<p><a href=\"https:\/\/illumin.com\/insights\/blog\/whats-in-house-programmatic-advertising\/\"><span style=\"font-weight: 400;\">Programmatic advertising<\/span><\/a><span style=\"font-weight: 400;\"> is not new, in fact, it is as old as the digital banner ad itself. But the late 2000s saw a staggering evolution in the medium and programmatic platforms are more capable than ever. And now, Current technologies like AI are bringing an exciting edge to the world of programmatic. Programmatic advertising is a major facet of modern advertising and its ability to serve media to users at different points in their purchasing path is essential to long-term, digital success.<\/span><\/p>\n<p>&nbsp;<\/p>\n<div class=\"micro-cta-wrap pos-relative\"><div class=\"micro-cta-main radius-24 flex pos-relative\"><div class=\"micro-cta-image\"><figure class=\"micro-cta-thumb object-fit pos-relative\"><img decoding=\"async\" src=\"https:\/\/illumin.com\/wp-content\/uploads\/2023\/03\/demo_CTA-2.png\" alt=\"micro-cta@2x\" title=\"\"><\/figure><\/div><div class=\"micro-cta-text pos-relative\"><span class=\"optional-text\">Advertising made easy <\/span><div class=\"h3\">Learn how illumin unlocks the power of journey advertising<\/div><a href=\"https:\/\/illumin.com\/product\/request-a-demo\/\" class=\"button\">Get started!<\/a><\/div><\/div><\/div>\n<p><span style=\"font-weight: 400;\">To see more from illumin, be sure to follow us on <\/span><a href=\"https:\/\/twitter.com\/illuminHQ\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Twitter <\/span><\/a><span style=\"font-weight: 400;\">and <\/span><a href=\"https:\/\/www.linkedin.com\/company\/illuminhq\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">LinkedIn<\/span><\/a><span style=\"font-weight: 400;\"> where we share interesting news and insights from the worlds of ad tech and advertising.<\/span><\/p>\n<p><a class=\"twitter-follow-button\" href=\"https:\/\/twitter.com\/illuminHQ?ref_src=twsrc%5Etfw\" data-show-count=\"false\" target=\"_blank\" rel=\"noopener\">Follow @illuminHQ<\/a><script src=\"https:\/\/platform.twitter.com\/widgets.js\" async=\"\" charset=\"utf-8\"><\/script><\/p>\n<p><script src=\"\/\/platform.linkedin.com\/in.js\" type=\"text\/javascript\"> \u00a0 lang: en_US <\/script><script type=\"IN\/FollowCompany\" data-id=\"1189312\" data-counter=\"right\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This guide to programmatic advertising explains how the ad platform works and the best practices for using the format.<\/p>\n","protected":false},"author":10,"featured_media":14841,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[20,19],"tags":[64],"class_list":["post-14146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guides","category-insights","tag-programmatic-advertising"],"acf":[],"_links":{"self":[{"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/posts\/14146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/comments?post=14146"}],"version-history":[{"count":0,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/posts\/14146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/media\/14841"}],"wp:attachment":[{"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/media?parent=14146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/categories?post=14146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/illumin.com\/wp-json\/wp\/v2\/tags?post=14146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}