Programmatic Advertising; What is it and does it actually work?

Key Takeaways:

• What is programmatic advertising?
• What’s the use case?
• Potential challenges with programmatic ad
• Measurement and setting up for success
• Is programmatic advertising right for you?

There are many types of digital advertising. The challenge is never choice of channels, campaign types or ad formats, it’s knowing where to start or what’s right for your business.

Programmatic is one of the current buzzword-esque advertising opportunities.

You’ve no doubt heard it in conversation, been asked if you’re doing it and rightly have questions to understand what it is and what the benefits are.

What is programmatic advertising?

Very simply put programmatic is display format ads, showing in placements across the internet.

These are usually served by software platforms and can offer placements and targeting methods which sit outside of traditional channels such as Google and Meta ads.

Programmatic campaigns leverage these platforms to target audiences with precision and scalability.

This broader reach has the potential to enhance your ad revenue by tapping into audiences outside of these established platforms

The benefits can range from broader brand awareness and reach, through to driving action with remarketing lists in placements your other campaigns aren’t hitting.

Impressions, clicks and consequent metrics can be cheaper than more popular, competitive channels.

Two of the most common approaches are to run Amazon DSP, if you’re an ecomm brand with products in the Amazon channel or to send the display traffic directly to your website.

What’s the use case?

Programmatic works really well for those looking to drive brand awareness rather than direct action in terms of sales and leads.

The broad audiences, combined with lower cost impressions can get you out there in a visual format, to a much higher volume.

This can be very useful if you have a new to market proposition where there perhaps isn’t demand to capture via search advertising.

Over sustained periods of time, this activity can work to increase brand search where you may see an uplift in Google Ads brand campaigns or in your Amazon sponsored ads.

As with any brand awareness activity, high spend across a sustained period of campaign activity will be required to really give this a chance to have an impact.

If you’ve saturated reach in more go-to channels such as Google, Meta and Linked, then you may also find that programmatic is the logical next step to keep driving additional volume for your business.

Search advertising is highly effective for driving sales and leads as it carries the user intent that someone in the moment the ad is shown is actively looking for what you offer.

The downside to this is that you can reach constraints on scaling given that you are limited to showing ads when someone searches.

Potential challenges with programmatic ads

This isn’t a channel for SME in my opinion.

If you have limited budgets, it should go onto the channels where you have the highest likelihood of driving qualified leads or sales at a profitable return first. If you can saturate investment there, then it makes sense to expand and test programmatic.

Programmatic advertisers often face challenges with traffic quality and user qualification.

Taking it back to user behaviour we have to consider a user with intent to enquire or buy targeted, and then what were they doing at the time the banner ad was displayed and what’s likely to be their level of action knowing that.

If someone is browsing on a particular site, to get them to click away and then take a performance based action like making a purchase can see quite low efficacy, not just in programmatic, with banner ads generally speaking.

Google and Meta have the best data on all of us as users. You have the best chance to drive performance in those channels, provided that campaigns are set up correctly.

If you’re looking to drive brand rather than performance, understand that deep pockets and sustained investment for a period of time that’s required to really have an impact.

Like all things in paid media, it’s just a numbers game. To see results you need to create an environment where that’s likely to happen.

Measurement and setting up for success

To ensure that programmatic is adding value for your business, it’s important to set out the right surrounding measurements.

This will allow you to see if the performance being driven is really having a commercial impact.

It should form part of a balanced marketing strategy that prioritises both brand awareness and measurable outcomes.

1. If you’re sending traffic to your website, add Microsoft Clarity so that you can review user session screen recordings. If the traffic is good quality, you will see the users engaging with the site and leading to action being taken. If not, you will see the short 0-5 second sessions before a bounce.
   
2. If you are running Amazon DSP or website programmatic, annotate in your ads account when activity started so that you can review if there was any uplift in brand search. You can also use Google Ads Keyword Planner retrospectively to check this. If you have brand campaigns on though, it should be clear.
   
3. Always check your source of truth! As a visual advertising channel, programmatic relies on something called view-through conversions. This is when an ad has been served (not necessarily seen) and then the user has come to the site and converted. This can very often lead performance to look good when commercially, there is no impact. All websites have a time lag between initial visit and close. Some percentage will have come back and converted anyway. Check your business reports on Amazon and your topline store revenue. If the channel indicates it’s up and to the right but the commercials are flat, you have an attribution overlap on your hands.
   
4. Review primary metrics in-line with secondary metrics. Lower cost-per-impression or cost-per-click in isolation isn’t beneficial if it isn’t converting. Sometimes a channel such as Google Ads may have higher click costs but still convert profitably because the conversion rate is much higher, due to the user intent in the targeting.

Is programmatic advertising right for you?

It’s right to have an understanding and awareness that this channel exists for your business.

Blended into an effective broader strategy, online ads can add huge value. If you haven’t established performance there, it might be time to do that and then use this channel as the cherry on top.

Use cases

• Large brand
• Have saturated spend in main channels
• Looking to drive brand awareness
• Non-performance KPIs

Not ideal for

• SME with limited budgets
• You haven’t established demand capture in search ads
• Paid social isn’t in place
• Those who only want to invest in performance KPIs

The barriers to entry are becoming less and less which is something that’s really positive for programmatic advertising. You can always take the approach of test it and find out what happens.

Ensure that you have our measurement guidance in place and it will either add value for you, in which case you can measurably know it is or it won’t and you’ll have the insights quickly to course correct back into other advertising.