Varos Glossary

Programmatic advertising

What is Programmatic Advertising?

Programmatic advertising is a media buying method available in most paid ad platforms. This bidding method leverages automation technologies and algorithmic underlying methodologies to allow both advertisers and publishers to reap more rewards for every ad campaign.

The term ‘programmatic’ describes how the price of a specific ad spot will vary based on different variables and calculated on the fly. Advertisers will have a bidding strategy configured that then determines whether to bid or pass on the ad spot.

One of the primary reasons why programmatic digital advertising has become so popular is that it allows advertisers to have more control over their ad spend while also making the most of every dollar.

Are Programmatic Ads and Display Ads Different?

Display ads are what most advertisers are used to — are these different from programmatic ads? Programmatic ads and display ads have some key differences to understand, which include:

  • How the ads are priced: Programmatic ads refer to how the pricing of the ad spots is determined, which is calculated based on a wide range of factors.
  • Where the ads appear: Display ads refer to the format and network that the ads will appear on. With display ads, you’ll select a specific network, while programmatic ads can typically be across multiple networks (such as Google Search and YouTube).

However, these terms are not mutually exclusive. Programmatic display advertising describes a campaign that uses both to bid on ads programmatically based on the location of the campaign. Advertisers and publishers alike can still benefit from the popularity and effectiveness of display ads while maximizing returns with programmatic ads.

Benefits of Programmatic Advertising

Why should advertisers choose programmatic advertising over other media buying options? Keep in mind that every business's needs and objectives are unique, so while programmatic ads can be perfect for one company, they may be lacklustre for another.

However, there are still notable benefits to consider. Let’s explore some of the key benefits that make programmatic ads a compelling option for any advertiser.

Creating Highly Scalable Ad Campaigns

Both B2C and B2B programmatic advertising allow advertisers to have granular control over the costs of every ad they run. Due to the automation aspect of the mechanism, programmatic advertising gives you a high degree of control over how much you spend and how effectively you spend it.

As a result, advertisers can create cost-effective campaigns that set the stage for effective scaling. Ad campaigns that are too costly or have a lacklustre ROI can severely impact scalability. Conversely, an ad campaign with an ideal ROI provides increasingly greater benefits as it scales.

Real-Time Data for Better Refinement

Programmatic ad campaigns will give you real-time data about your campaign’s spending. You can make changes on the fly, provided the platform allows it, or use the data to refine other campaigns that have not yet launched. You may discover that the price of a single ad spot is higher or lower than expected, allowing you to refine your bidding strategy.

Once a campaign is complete, advertisers will have a wealth of data about bid performance and results to inform future campaigns. With programmatic data, it becomes easier to control how much you spend for every click or impression, as well as better understand your ROI.

Running Cross-Device Campaigns

Cross-device campaigns are a necessity, and most ad platforms will charge differently from mobile and desktop users. As a result, other bidding methods can make it a challenge to properly target users on either device. 

For example, a bid of $1 for an ad spot might be perfect for desktop users, but your industry is more competitive for mobile users, and a bid of $1 will never earn the ad spot. Programmatic advertising addresses this problem by allowing you to set dynamic bids depending on the situation so you target any device.