Insights
October 27, 2020

Why Programmatic Advertising Matters More Now

Thanks to the global pandemic, a lot of people are spending more time online these days. That means advertisers will need to shift their strategy from offline (traditional) advertising to online (digital) advertising.

We are seeing so many brands and businesses channelling their marketing funds towards online digital real estate since the COVID-19 outbreak. This makes it harder for brands to ensure that their digital presence won’t get lost in the concentrated pool of advertisements. It can be challenging to stand out from the crowd when every other brand is also fighting for the same online user’s attention.

Here’s why programmatic advertising matters more now than ever before because it can help advertisers get their money’s worth.

What is Programmatic Advertising?

As we have covered in an earlier post, programmatic advertising is the automation of buying and selling online advertisements. When we say automation, what we mean is ad buyers will no longer need to manually request for quotations, tenders and proposals before deciding on which ad space works best for their campaign. From a technical standpoint, programmatic advertising is the technique of utilizing a platform to sell ad inventory on publishing sites as well as on the advertising side.

There are two key components of programmatic advertising: the supply-side platform (SSP) and the demand-side platform (DSP), which are both stored on the Data Management Platform (DMP). Here’s how SSP and DSP works. The ad space will be listed by the publisher on the SSP so that the ad viewer can see it. The SSP takes on the role of the seller for the publisher and informs the advertisers of additional details like the site, user and ad space attributes. By doing so, it enables the DSPs to bid for the right ad space and advertise the product or service for sale.

To put it simply, programmatic advertising uses real-time data, algorithms and other basic information like user demographics, location, interests, behaviour, hours active online, device and phone operator details, etc. to precisely target the right audience for the right marketing campaign. It gives ad buyers the flexibility to tweak their ad specifications according to their budget allocation. In short, programmatic advertising allows ad buyers to make better decisions so that they can optimise their advertisement reach.

Is Programmatic Advertising Effective?

Yes, very much so. See, programmatic advertising helps you plan and manage your advertising budget wisely. It allows you to target the right set of target users. Thanks to an abundant amount of data, you can customize your ads – messaging, space/location, and timing – and ultimately reduce the budget on ad viewers who are not keen to buy your product.

With that said, it’s important to note that data is useful when you know how to interpret and apply it. Although programmatic advertising gives you access to a wide pool of data (that’s constantly growing), you need to know how to use the data so that your ads appear less intrusive to your target audience. One way is to apply contextual targeting where you can use keywords or contextual page relevance to target users.

With programmatic advertising, you’ll have a more transparent media-buying experience where you no longer need to rely on agencies or third parties to handle your ad spend. One added feature of programmatic advertising is its ability to reach audiences across multiple channels and format. It can tap into target audiences who are on mobile, desktop, tablet, TV, etc. The programmatic advertising reach just keeps growing and growing.

The Impact of Programmatic Advertising During Covid-19

The programmatic ad spends predictions made before Covid-19 and the global lockdown has drastically changed. Industries like event-planning, travel and automotive saw a decline in ad spend as people were instructed to stay indoors for their safety. Nonetheless, other industries like education and training, technology, health and safety, as well as cosmetics saw an increase in ad spend. It is an indication that while some industries are taking a hard hit, others are thriving because people are creatively finding ways to cope with being indoors for long periods.

Despite the decline in ad spend during the first few months of the global lockdown, programmatic advertising ad spend will only continue to increase with time (as indicated in the graph above). This is because the pandemic has altered the utilization and optimization of advertisements with many industries shifting to online ad space. As a result, this will persuade more brands and businesses to allocate more budget towards digital efforts (i.e. digital and programmatic advertising) so that they can optimize their budget.

Will there be a rapid increase in ad spend soon? Hard to say due to the uncertainties caused by the pandemic. Should brands and businesses continue to pump in cash for digital advertising? YES! Brands and business should continue to allocate budget for digital marketing and advertising efforts to ensure that they are targeting the right people for their products and services.

If you’re still unsure of how to go about programmatic advertising, you can talk to us today to find out how to optimize your digital marketing and advertising reach. We also provide other social media advertising as part of our Digital Marketing Services.

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