Companies are increasingly seeking new ways to promote their products or services. In recent years, both in Poland and worldwide, Programmatic Advertising has been gaining growing interest. What is it, and is it worth using?

What is Programmatic Advertising?

Programmatic Advertising is a method of buying and selling online ads using automated processes and algorithms. Instead of negotiating prices and terms with individual publishers, advertisers can use technological platforms that automatically select the best ad placements and formats for their campaigns. Programmatic Advertising allows for better audience targeting, budget optimization, and ad effectiveness measurement, making it recommended and utilized by marketing professionals. Competivo also recommends it.

The automation of the ad buying and selling process is possible thanks to self-learning algorithms that determine in a fraction of a second whether a person might be interested in a particular ad. The system matches the ad to the audience based on age, gender, interests, online behavior, or the devices they use. Traditionally, a decision is made whether to purchase a specific number of impressions or airtime for a certain period. Thus, each time a user visits a website, the system selects the ad that offers the best chances of conversion. This gives programmatic ads a significant advantage over traditional ones in terms of achieved results.

In 2021, programmatic ad spending reached around $155 billion, representing a growth of over 100% in the last 4 years. Programmatic ad purchases are typically based on CPM, meaning cost per thousand impressions. However, rates can vary across different platforms or depending on targeting precision, industry, format, or ad placement. The average CPM rate ranges from $0.5 to $2.

Advantages and Disadvantages of Programmatic Advertising

Programmatic Advertising offers many benefits for advertisers. Firstly, it allows for tailoring ad content to users’ preferences and behaviors in real-time. Ads can take various forms – video, graphics, audio – making them more relevant, engaging, and effective. Additionally, Programmatic Advertising enables the use of data from various sources such as CRM, social media, or geolocation, allowing the creation of more personalized and segmented campaigns. It also facilitates campaign management across multiple channels and devices, increasing brand reach and awareness. Programmatic ads can be displayed on platforms not available in Google Ads. Of course, a significant advantage of programmatic ads is their much lower cost compared to specialists, as well as the absence of the need to pay intermediaries. Another major benefit is the ability to choose the number of impressions per user, avoiding intrusiveness.

However, programmatic ads are not without challenges. One of them is the issue of ad safety and quality. Advertisers must ensure that their ads do not appear on inappropriate or harmful websites that could damage their reputation or violate copyright laws. Therefore, it is essential to use trusted partners and tools that provide transparency and control over ad placements. Another challenge is the complex and dynamic nature of the Programmatic Advertising market, requiring continuous monitoring and adjustment of strategies to changing conditions and trends. It is also crucial to remember that collecting user data must comply with GDPR regulations. Another serious threat is ad fraud, involving the display of fake or invisible ads, which can waste the advertising budget, erode trust in advertisers, and reduce campaign effectiveness.

Is it Worth Using Programmatic Advertising?

Programmatic Advertising is a modern and effective way of conducting online advertising that offers many benefits for advertisers. However, to fully exploit its potential, one must be aware of its limitations and risks, and employ appropriate technological and analytical solutions. Programmatic Advertising is not only technology but also an art and science that requires creativity and knowledge. Marketing specialists, such as Competivo, recommend programmatic ads and assist in creating marketing strategies based on them and monitoring their performance.