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Digital marketing has drastically changed the way that brands interact with audiences. With the emergence of programmatic advertising, ad displays can be optimized to reach the right audience at the right time and place. The automated bidding process also makes it easy for advertisers to buy, place, and optimize their ads using data collected in real-time.
Compared to traditional advertising, which is done manually and takes time to set up, programmatic advertising relies on algorithms to complete the process in a fast but accurate manner. It also tracks and analyzes the campaign’s performance as it is running, so advertisers can focus their budget and efforts on more successful campaigns and get the best return on ad spend (ROAS).
Programmatic advertising technology is very efficient and simplifies what used to be a very complex process. However, automation does not mean that the campaign should be left to run on its own. Careful preparation, as well as continuous monitoring, are still necessary. Following these best practices can help you run an effective programmatic advertising campaign.
Choose the Right Platform
Programmatic advertising is possible because it runs on a sophisticated ecosystem of programs. A Demand-Side Platform (DSP) coordinates with a Supply-Side Platform (SSP) for the list of publisher sites and available spaces for ad placement. When an ad requires placement, it goes into the DSP and finds a match on the SSP. An ad exchange is then made through real-time bidding (RTB).
When choosing a DSP to use for your programmatic advertising, consider more than just the pricing. Find out what the ad inventory looks like, what features are available, and what type of ad exchange is used. Also, check if it offers safety measures against ad fraud, so your advertising investments remain protected.
Opt for Outcome-Based Bidding to Lower Costs
Another consideration for choosing a DSP is whether it offers outcome-based bidding. Most automated bidding systems make purchases based on cost per thousand impressions or CPM. However, some campaigns may prefer outcomes based on clicks or conversions.
Outcome-based bidding uses a machine-learning algorithm. It allows advertisers to pay on a cost per acquisition (CPA) basis to maximize conversion. This kind of system results in an overall lower CPM, which saves money for the advertiser.
Use the Right Audience Targeting
Programmatic advertising is all about optimizing ad performance, and it starts with identifying the right audience for your campaign. There are several ways to do ad targeting.
- Demographics targeting focuses on the traits or qualities of specific populations like age, gender, marital status, educational attainment, and even household income. This is the most commonly used type of targeting.
- Location targeting or geotargeting works best for ads that promote a physical location or event. This ensures that the ad is only shown to an audience within a certain proximity based on their zip code or even IP address.
- Behavioural targeting looks at the audience’s online activities like what they search for, what websites they visit, and whether they shop online or abandon items in their digital shopping cart. Even if demographics and location seem like a perfect fit, the lack of buying behaviour can result in poor conversion for your ad.
- Contextual targeting also uses data from users’ online activities, but instead of looking at their buying behaviour, it evaluates the keywords used in the websites they browse. Ads that may be relevant to those keywords appear alongside related articles. This tactic may best work for audiences who may still be at a decision-making phase.
- Retargeting may seem like a nuisance, but there are some instances when seeing the same ad on different websites is an effective form of advertising. This tactic may work for users who have engaged with or purchased from the advertiser previously. Retargeting can then be used to convert them into repeat customers. However, this type of audience targeting isn’t always applicable to all campaigns.
Apply Frequency Caps to Reach a Larger Audience
While targeting allows you to reach the best audience for your ad, you may want to implement frequency caps to prevent oversaturating impressions. The cap sets a limit on how often certain users will see your ad for any set period. Being bombarded with the same ad over and over can be detrimental to how users perceive your brand and make them less likely to interact.
Additionally, a frequency cap makes your media budget more cost-efficient because it redirects the impressions to other users. Take note that while impressions simply count the number of times the ad has been displayed to a user, reach determines the number of unique users who have seen the ad. Frequency capping thus results in a higher ad reach, so more of your target audience is able to see the ad. Getting a higher reach without needing to increase ad spend means better ROAS for your campaign.
Programmatic advertising is a game-changer for making digital marketing smarter and more cost-efficient if it is used correctly. There are many ways to maximize its features and the opportunities that they offer. Start by applying these best practices and make use of programmatic advertising’s real-time analysis of the live campaign to adjust as needed.
