Beginner guide to buying programmatic advertising

Programmatic advertising has become a buzzword in digital marketing and not without good reason. Its ability to leverage data and automate the ad-buying process is revolutionizing how businesses reach their audiences online. But with all the technical jargon and rapid evolution of this space, it can feel overwhelming, especially if you’re just starting.

What is Programmatic Advertising?

At its core, programmatic advertising is the automated process of buying and selling online advertising space. Unlike traditional methods, which involve direct negotiations and manual insertion orders, programmatic uses technology, algorithms, and data to purchase ads across various digital platforms in real time.

Think of it as letting machines do all the heavy lifting. They help you decide the best time, place, and platform to serve your ads to reach your customers effectively.

Why is Programmatic Advertising Popular?

Programmatic advertising is popular because it offers efficiency, precision, and scale that traditional methods struggle to match. By harnessing data-driven technology, marketers can:

Reach the right audience at the right moment with tailored messages.
Save time by automating the typically manual aspects of ad buying.
Optimize spend by allocating budgets to high-performing channels or audiences.

That said, creating a successful campaign requires more than just automation. It demands strategy, expertise, and an understanding of your marketing goals.

How Does Programmatic Advertising Work?

To understand programmatic advertising, you need to familiarize yourself with a few key concepts. Here’s a simplified overview of the process:

1. Demand and Supply Platforms

Programmatic advertising relies on two major players:

Demand-Side Platforms (DSPs): These platforms allow advertisers to buy ad space. DSPs use algorithms and data to decide which ads should appear, where they should be shown, and how much an advertiser should bid.
Supply-Side Platforms (SSPs): These platforms work on the publisher’s side, helping them sell ad space to advertisers.

2. Real-Time Bidding (RTB)

Programmatic advertising primarily operates through real-time bidding (RTB). When a user visits a webpage or uses an app with available ad space, an auction happens in milliseconds. Advertisers bid on that space in real time, based on how likely it is to engage their target audience.

The highest bidder wins, and their ad is displayed immediately.

3. Data Targeting

What makes programmatic advertising so powerful is its use of data. Advertisers can target users based on demographics, location, behavior, interests, or even intent. For example, an outdoor gear company can target users recently searched for hiking equipment.

4. Dynamic Creative Optimization

Another significant advantage is the ability to use dynamic creative optimization (DCO). This technology allows advertisers to deliver personalized ad creatives depending on the user’s preferences or browsing history.

Steps to Buying Programmatic Advertising

Now that you know what it is and how it works, here’s a step-by-step guide to set up your first programmatic ad campaign:

Step 1. Define Your Campaign Goals

Do you want to increase brand awareness, drive traffic to your website, or boost conversions? Start with clearly defined campaign goals. Your objectives will shape everything about your campaign, from audience targeting to the type of creatives you use.

Step 2. Understand Your Audience

The more you know about your audience’s behavior, needs, and preferences, the better your targeting will be. Programmatic platforms allow for:

Demographic targeting (age, gender, etc.)
Behavioral targeting (online activity, interests, searches)
Contextual targeting (serving ads in relevant content spaces)

Step 3. Choose the Right DSP

There are many Demand-Side Platforms out there, ranging from beginner-friendly to enterprise-level solutions. Some popular choices include:

Google Display & Video 360
The Trade Desk
MediaMath

Research each DSP’s features, pricing, and support to find one that suits your needs and experience level.

Step 4. Set Your Budget and Bid Strategy

Decide your budget and bid strategy upfront. Most DSPs allow for:

Cost per Mille (CPM): Pay per 1,000 impressions.
Cost per Click (CPC): Pay only when someone clicks on your ad.
Cost per Acquisition (CPA): Pay when a user completes a desired action, like signing up or purchasing a product.

Make sure your strategy aligns with your campaign goals. For example, if your primary goal is brand awareness, CPM may work best. For conversion-driven objectives, CPA is ideal.

Step 5. Develop High-Quality Ad Creatives

Programmatic advertising works best when paired with compelling ad creatives. Use visuals and copy that resonate with your target audience. If your DSP supports dynamic creative optimization, consider creating multiple variations. Why? Tailored messaging performs better than one-size-fits-all.

Step 6. Launch the Campaign and Monitor Performance

Once everything is set up, launch your campaign. But don’t just set it and forget it! Use analytics to:

Track key performance metrics like click-through rate (CTR), impressions, and conversions.
Optimize budget allocation toward higher-performing channels.
Make real-time adjustments to creatives and targeting as needed.

Programmatic advertising’s strength lies in its flexibility, so take advantage of it.

Common Mistakes to Avoid

While programmatic advertising offers powerful results, it’s not without challenges. Here are common pitfalls to watch out for:

Ignoring Ad Fraud: Some ad impressions are delivered to bots, not humans. Use tools like IAS or Moat to reduce fraud risk.
Underestimating Creative Quality: Poor creatives can lead to low engagement rates, no matter how effective your targeting is.
Lack of Expertise: Programmatic platforms can be complex. If you’re new, consider hiring an expert or seeking training to minimize mistakes.

Why Programmatic Advertising is Worth Your Investment

Over two-thirds of digital ad spend now goes toward programmatic campaigns, and it’s evident why. Done right, programmatic advertising offers unparalleled efficiency, letting marketers:

Harness audience data to reach the right users at the right time.
Save time and manual effort through automation.
See measurable results, with granular insights into what’s working and what’s not.

If you’re serious about scaling your digital advertising efforts, programmatic is no longer an option; it’s a necessity.

Tips to Maximize ROI with Programmatic Advertising

Here are some final tips to help you get the most out of your campaign:

Combine programmatic ads with other marketing efforts (like email marketing) for an omnichannel approach.
Monitor industry trends to stay updated on new tools or data privacy regulations that might affect your campaigns.
Continuously AB test your creatives, targeting, and formats to optimize performance.

Bring Your Advertising Into the Future

Programmatic advertising might sound complex initially, but its impact is transformational once you start. By automating processes, leveraging data, and improving targeting, you can make every ad impression count.

Are you ready to transition into the programmatic advertising space? Take the first step by learning more through a trusted DSP platform or working with experienced consultants.