Did you know that today, global spending on programmatic advertising is 595 billion USD per year? And as large a number as that already is, the market is still growing at a rate of 9% annually. It’s safe to say that programmatic advertising platforms are quickly becoming the norm as advertisers rely more and more on its advantages, such as automation and streamlining. But where do you start? In this article, we’ll help you gain a thorough understanding of programmatic advertising platforms and explore how to navigate them effectively. Keep reading to better understand what they have to offer and how you can integrate them into your processes.

Programmatic Advertising Platforms: An Introduction

Programmatic advertising is the automated process of buying and selling ad spaces without actual interaction between the publishers and advertisers. Instead, programmatic advertising platforms use algorithms and relevant software to work their magic. However, things weren’t always this smooth sailing. Back in the 1990s, programmatic advertising platforms weren’t as efficient as they are today. The first rendition was merely a space that aggregated all ad space inventory. However, the actual process of buying was still manual. Thankfully, things have vastly improved since then.

How Programmatic Advertising Platforms Work

So, how much better do things look for digital advertisers today? Here’s a quick look at the entire process up to ad display:

  1. Advertisers determine the goals of their campaign
  2. The publisher declares its available ad inventory
  3. Real-time bidding takes place
  4. The winner is declared based on the bid amount and how well-matched the ad is to the target criteria
  5. The winning ad is displayed

With programmatic advertising platforms, these steps occur all in a matter of milliseconds. As an advertiser, once you’ve configured the details for your campaign, such as target audience and bid range, you’re good to go!

The Importance of Programmatic Advertising Platforms in Today’s Digital Advertising Landscape

The use of programmatic advertising platforms in online advertising is the norm for a reason. Think about how many advertisements you encounter in a day when you’re simply scrolling on your phone. Now, imagine the sheer amount of work it would take to handle that amount of advertising without the help of these platforms; it would be virtually impossible! Because of this advancement, you can enjoy an unprecedented level of targeting capabilities. You’ll have access to a lot of relevant data that will allow you to speak to your audience in the best way possible. Programmatic advertising platforms do this at speeds that are not humanly possible. With the competition that exists nowadays, it’s important to act fast. And with this tech in your corner, you’ll always be able to do so.

Key Components of Programmatic Advertising

Programmatic advertising is a process that needs the participation (whether manual or automated) of both advertisers and publishers. On your end, programmatic advertising platforms may be the only component that’s relevant to you. However, as you’ve seen in the previous section, there are a lot of forces at work. In this section, you’ll learn the various programmatic advertising platforms that perform their own functions to allow the full automation of media buying. Keep reading to learn more about each of them.

Demand-Side Platforms (DSPs)

Demand-side platform (DSP) programmatic advertising allows you to automate the purchase of the ad. As an advertiser, you’ll use this platform to:

  • Participate in real-time bidding;
  • Target and segment your audience;
  • Manage the campaign;
  • Optimize the ads.

The demand-side platform ensures that you’re matched with the most suited publisher based on the audience, budget, ad quality and more. Programmatic advertising platforms for advertisers are capable of managing various formats as well, including display, mobile, video and in-app ads.

Supply-Side Platforms (SSPs)

Meanwhile, the supply-side platform is the advertising platform for publishers. It allows the publisher to:

  • Manage their inventory of ad spaces;
  • Disqualify low-quality ads or those that are not good matches;
  • Display the ad with the highest bid and best suitability (Note: Different programmatic advertising platforms have different considerations);
  • Provide reports to facilitate better decisions moving forward.

Through all these functions, the publisher will be able to earn revenue from ad spaces while ensuring that a certain level of quality is maintained on their site. Such programmatic advertising platforms have the publisher’s best interests in mind.

Ad Exchanges

Through the ad exchanges, you, as the advertiser, receive access to programmatic ad networks that may be used for your campaign. This is where you and the publisher “meet,” allowing both parties to learn relevant information through an automated process. Unlike the first two programmatic advertising platforms discussed, ad exchanges are considered neutral. They act more like a marketplace where publishers and advertisers negotiate through real-time bidding.

Data Management Platforms (DMPs)

Data management programmatic advertising platforms are responsible for providing you with access to data and information on audience segmentation. The data that you get from DMPs may also be shared through demand-side programmatic advertising platforms. However, it’s not just the advertisers that benefit from DMPs. Publishers will also have access to data, allowing them to better decide how best to monetize their ad inventory. For example, if a specific page attracts a lot of users interested in travel, supply-side programmatic advertising platforms will sell the ad spaces there to travel-related advertisers. Since the audience is highly relevant, they are more likely to bid higher than the general market.

Types of Programmatic Advertising Platforms

Even before programmatic platforms came to be, there were already a lot of pricing structures for media buying. So, it’s no surprise that programmatic advertising platforms mimic these purchase arrangements as well. In the following subsections, we’re going to focus on the various types of programmatic advertising platforms and their pricing structures. Keep reading and see if these other methods to buy ads may suit you better.

Real-Time Bidding (RTB) Platforms

RTB is probably the most recognizable of the programmatic advertising platforms. But what happens when you choose programmatic advertising platforms that follow real-time bidding?

  1. The publisher declares an ad space for sale.
  2. The ad exchange collects information about the publishing site.
  3. You make your bid.
  4. Your ad is placed if it’s the winning bid.

With programmatic advertising platforms, all this happens instantly so that you can launch your campaign whenever you want it to! It’s also very simple because you’re only paying for the clicks or impressions that you want.

Private Marketplaces (PMPs)

Some programmatic advertising platforms are available by invitation only. This is the case with private marketplaces. The beauty of this option is that you’ll be able to access higher-quality ad inventory while also having less competition for it. This may be the best programmatic display advertising platform if you’re confident that the publisher’s audience is a close mirror to your own. To get your ads placed through PMPs, expect to spend more money. Top-notch publishers using such programmatic advertising platforms will demand more from advertising deals.

Programmatic Direct Deals

Can you imagine having first pick on any ad space from a publisher? That’s a privilege you can enjoy with programmatic advertising platforms that create direct deals. Here are two ways that it can work:

  • Only once you decide that the ad spaces aren’t for you will they be offered to others.
  • Everything is pre-negotiated, so it’s guaranteed that the price will always be within your budget.

Like with PMPs, direct deal programmatic advertising platforms provide you with the benefit of access to a high-authority publisher that’s a good fit for your target market.

Hybrid Platforms

With hybrids, you’re combining two types of programmatic advertising platforms: RTB and direct deals. This means you’ll be able to participate in auctions and negotiate deals with the publisher. What is a self-serve programmatic platform of this kind able to provide you in this case? A lot of flexibility. You can secure spots from sought-after publishers, allowing you to build authority while targeting your audience. But because this combines two programmatic advertising platforms, you’ll also be able to throw your hat in for lower-priority ad spaces. So, if you want to get the benefits associated with both, going hybrid is the way.

MGID: Your Top Programmatic Platform for Native Advertising

Even with talented advertisers, banner blindness is a real problem that is still hard to overcome. That’s why native advertising is such a powerful tool. By blending in to enhance the browser experience instead of standing out, users may be more receptive to your message. Of the programmatic advertising platforms that cater specifically to native advertising, MGID is your top choice. Our extensive publisher network ensures that no matter what market you serve, your ads will always be placed in front of a highly relevant audience. We also support high-engagement ad formats that help boost user interaction with the ads. And no matter where your audience is hanging out, your message will always be heard thanks to our cross-platform reach.

Benefits of Using Programmatic Advertising Platforms

Are you still not sure about whether or not to make the change? There’s many reasons why the overwhelming majority of advertisers use programmatic platforms. However, let’s say that your focus is video ads. What advantages does a programmatic video advertising platform bring you? That’s what we’ll focus on in this section.

Increased Efficiency and Automation

Before programmatic advertising platforms were a thing, getting your ad displayed on a site was a tedious process. You’d have to call publishers, compare and negotiate rates, secure the deal and then get your ad placed… on the next publication at the earliest. Without programmatic advertising channels, even the act of purchasing was an entire job. However, with this technology, the entire media buying process happens in just minutes. Set up the parameters for your campaign and audience, then get your ads placed instantly. Programmatic advertising platforms automate the entire process so that you can set up and launch a campaign within the same hour.

Enhanced Targeting and Personalization

Before your official campaign launch, programmatic advertising platforms provide you with sophisticated targeting options based on demographics, behavior, browsing activity and more. The targeting capabilities you’ll see in the most popular programmatic DSP platforms may vary. However, you can use them all to deliver a more personalized experience to your target audience. For example, programmatic advertising platforms may tell you that only the younger age groups are engaging with your ad. Then, perhaps you should consider creating new versions of the ads to try to capture the attention of older generations.

Real-Time Data and Analytics

Programmatic advertising platforms also provide you with real-time data and analytics. This means that as soon as you run the ad, you’ll be able to see how it’s performing. Of course, we don’t recommend acting right away on the data DSP programmatic ad buying platforms provide. You’ll want to get a more generalized picture first instead of what just came in the last hour. But with the information that you’ll be able to obtain from programmatic advertising platforms, you’ll be able to make decisions based on facts instead of speculations. You’ll know exactly what’s working and what’s not, allowing you to make adjustments as needed.

Cost-Effectiveness and Improved ROI

Programmatic advertising platforms will always give you the best price for the ad placement and/or channel that you want. After all, the entire process is designed for both parties (you and the publisher) to get the fairest deal. And since programmatic advertising platforms provide you with a wealth of real-time data from the campaign, you’ll be able to modify various elements like targeting, creative, and copy. Therefore, a self-serve programmatic advertising platform provides two ways to boost ROI: by optimizing media buying negotiations and by improving the campaign itself.

Scalability

Using programmatic advertising platforms, you can easily invest more into a successful campaign or cut back on one that’s not performing well. This allows you to always allocate your ad budget in the best way possible. Programmatic advertising platforms can also be used to expand your campaign across various channels. By doing so, you’ll be able to reach even more of your target market and follow around interested audiences no matter where they’re browsing.

Challenges and Considerations When Using a Programmatic Ads Platform

Even though programmatic advertising provides a lot of benefits, such as boosted ROI, lower ad spending and efficiency, it can also come with a few challenges. Programmatic advertising platforms may also be prone to certain issues related to transparency and data privacy. And with more stringent data privacy laws in effect, this can prevent your campaign from reaching its true potential. So, to help you decide how to best use programmatic advertising platforms, let’s focus on the challenges and considerations and how you can overcome them.

Ad Fraud

Ad fraud refers to fake clicks, impressions and traffic brought about by bots and/or the competition. So, even if the dashboard on programmatic advertising platforms shows that the ad is performing well based on interactions, you may not get the returns you’re expecting. Ad fraud can also severely inflate your ad budget and harm the overall performance of your campaign. Using programmatic advertising platforms that have sophisticated fraud detection tools is a great way to prevent this. Blacklisting problematic publishers can also further prevent this issue.

Lack of Transparency

Some programmatic advertising platforms may not tell you where your money is going. Even though you can see the numbers from a macro perspective, you may not have any idea how your budget is allocated and why. That’s why it’s necessary to select programmatic advertising platforms that promote transparency. How detailed the insights you receive is a good clue on how upfront they are with the advertisers. We also recommend looking into the opinions of other advertisers, especially if you’re new to the scene. This way, you’ll gather more information about prospective programmatic advertising platforms that you’re thinking of using.

Data Privacy Concerns

There are regulations surrounding how user data should be handled. Failure to do so may result in fines or outright banning. So, how compliant are your preferred programmatic advertising platforms? Unless you hire an expert, the only way of knowing whether a certain platform is compliant is by understanding existing regulations. So, before selecting from your shortlist of programmatic advertising platforms, we recommend learning about the data privacy laws in your target market. This way, you’ll be able to avoid loss of trust from your potential customers as well.

Best Practices for Using Programmatic Advertising Platforms

A tool is just that — a tool. It doesn’t guarantee your success, but it helps you get there! That’s why the way you utilize your selected programmatic advertising tools is just as important as what you use. So, what should you remember when using them to set up your campaign? That’s what we’ll tackle here. In the following subsections, you’ll learn how to best take advantage of a digital media buying platform. These are general practices that will apply in almost all cases. However, specific ones may be useful, depending on what industry you’re in.

Setting Clear Goals and KPIs

Programmatic advertising platforms must be used with a clear goal in mind. For your campaign, are you expecting to get financial returns on your budget? Or perhaps improved brand awareness is your goal? You need to know this, before you even think about programmatic advertising platforms. Your goals will also determine which KPIs will be most relevant. For brand awareness, cost per mille and number of impressions are highly relevant. Depending on the pricing model you used in the programmatic ads platform, you’ll want to look at the cost per click, cost per install or any other cost-based metric. Check the click-through rates as well.

Selecting the Right Platform for Your Needs

Programmatic advertising platforms are always associated with a virtual place where content will be published. For example, with MGID, you’re opening the doors to 32,000+ websites where your ads can be placed. When choosing the most suitable programmatic advertising platforms, consider these.

  • Target audience: The channel that you use should support publishing somewhere your audience is hanging out.
  • Supported ad formats: In the e-commerce space, it may benefit you to stick to programmatic advertising platforms that let users buy right off the ad.
  • Budget: For lower budgets, you may want to start with options with a smaller demand.
  • Integration capabilities: Good programmatic advertising solutions will support integrations to make campaign management easier.

Optimizing Campaigns for Better Performance

You’ll have a lot of data to work with once the campaign is live. Now, your goal is not only to improve the impressions or click-through rate but also to lower the costs to get results. Here are a few ways that you can do that with a programmatic marketing platform.

  • Split testing: This ensures that you’re running the best version of the ad and creative.
  • Audience targeting: Based on the data coming in through programmatic data providers, you can see which market segments are responding to your ads. Then, you can focus your budget on them.
  • Real-time monitoring: Since programmatic advertising platforms provide the data in real time, you see right away how various campaign segments are performing. Adjust things as needed.

Automate and Systematize the Media Buying Process with Programmatic Advertising Platforms

Advertisers today are lucky! They’re always getting the best price for their ad and finding the best-fit platform for their ad content. This is all thanks to media buying platforms that have made what was once a tedious process practically instantaneous. The most important thing is to identify the most appropriate programmatic ad buying platform for your target market and goals. Do you plan on adding native advertising to avoid banner blindness? Register on the MGID platform today. Apart from our superior programmatic native advertising platform, you’ll get access to top tools and resources to help you succeed. With our high-level tools and your creativity, you can generate great success from programmatic buying.