Is programmatic advertising effective for B2B companies

The advertising industry has evolved over the years, especially for B2B marketers. Marketers these days need to look beyond traditional means to reach, engage and capture new audiences. This is one of the main reasons why programmatic advertising has garnered so much attention lately, especially in the B2B community.

Programmatic advertising is one of the most effective ways to reach a larger audience. But what is programmatic advertising and how does it work in the B2B marketing space?

Programmatic advertising remains a huge question mark for many B2B and digital marketers. Well Named. Programmatic is a new and relatively modern advertising alternative. It’s a perfect mix between machine learning, automation, data science, and programmatic ad buying, which, again, are relatively new concepts.

Although there is a lot of confusion surrounding programmatic advertising, we aim to clarify this for you. In this article, we’ll explore why programmatic advertising and programmatic marketing are important and why B2B marketers are showing more and more interest.

Let’s start with the basics.

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What is programmatic advertising?

An online advertising space

Programmatic advertising is a systematic algorithmic process of buying and selling advertising space in real time. For example, Google Ads and Facebook Ads, two of the most popular advertising platforms on the web, are programmatic.

Each programmatic advertising platform uses complex mathematical formulas to determine seller goals, third-party consumer data, the best ad format, bidding preferences, and consumer online behavior to organize an advertising strategy. effective purchase.

Programmatic Advertising Jargons Marketers Need to Know

There are a lot of words and terminologies in the digital advertising and programmatic advertising space. As a marketer, you need to know these terms to avoid confusion and fully understand how programmatic advertising works.

Here are some important programmatic advertising terms a B2B digital marketer should know in 2022.

  • Demand Side Platform (DSP)

A DSP helps marketers automatically purchase digital advertising space made available by media publishers using ad exchanges. Buyers can target specific audiences based on information such as website category, geographic region, age, online habits, and more. In the DSP, the advertiser configures their preferences to target the most relevant and appropriate audience. The software then automatically searches the marketplace or advertising network for opportunities that match these parameters.

  • Supply Side Platform (SSP)

Publishers use SSPs to manage their existing ad space, while marketers use DSPs to manage ad buying. To improve the visibility of the publisher to potential consumers, an SSP can connect to different advertising exchanges. An SSP allows a publisher to more effectively control and manage an ad space inventory. For example, publishers can set a minimum price for different impressions and define a specific format for buyers.

Programmatic auctions take place on a trading floor known as an ad exchange. As seen in a true auction, once a publisher makes their inventory available for purchase, the ad space will be sold to the highest bidder. The distinction is that B2B advertisers can buy advertising space on channels such as display, mobile, connected TV, etc. Additionally, all bidding activity is powered by an algorithm, ensuring accuracy and an unbiased bidding system.

Real-time bidding in programmatic advertising

Real-time bidding is where most of the action takes place. The automated auction venue where advertisements are sold between DSPs and SSPs. In real-time auctions, the SSP and DSP define their parameters in advance. While DSPs specify the audience they are interested in, SSPs specify the floor price of their inventory. The whole process of finding the right place to show the ad at the right time takes place in milliseconds when a web page is about to load.

Unlike RTB, which is largely an open exchange, a private marketplace gives publishers the choice to select advertisers who can buy their ad space. In this scenario, publishers will provide their inventory to a few pre-selected advertisers.

Is programmatic advertising worth the hype?

Programmatic Advertising can ensure that money, time and other resources are spent optimally. The fact that programmatic advertising is automated and paves the way for personalized ad delivery to an audience is one of the key factors why many digital advertisers invest in it. Almost 93% of total display advertising spend goes to programmatic advertising in the UK [1].

70% of respondents to the 2020 State of Programmatic Advertising survey said their programmatic efforts were successful in some way [2]. Additionally, 23% said their programmatic efforts were very successful in achieving their strategic goals. By 2022, programmatic ad spend in the UK is expected to exceed 9.3 billion (USD) [3].

All of these numbers suggest that programmatic advertising is effective and definitely worth a shot.

What are the benefits of B2B media buying?

Now that you have a basic understanding of how programmatic advertising works, let’s explore the benefits of B2B media buying.

Programmatic advertising has transformed the world of advertising. The hype around programmatic advertising is warranted, and the stats don’t lie. One of the main reasons why programmatic advertising has become a staple in B2B and B2C is its high efficiency. Also, traditional advertising techniques have slowed the speed of buying and selling inventory and are far from effective compared to programmatic advertising.

As mentioned earlier, machine learning algorithms are driving the entire B2B media buying space, accelerating the matching of publishers to digital environments. Therefore, B2B programmatic advertising is considered to be one of the easiest and most effective ways to display advertisements to an audience.

Disadvantages of programmatic advertising

Although programmatic advertising offers many advantages, it has some disadvantages. As a marketer, you should also know the downsides of programmatic advertising.

Fraud in the programmatic ad space inflicts heavy monetary losses on advertisers. It is crucial to understand that a significant increase in bot traffic over the past few years is another reason why advertisers are losing billions of dollars every year.

Brand safety is another downside of programmatic advertising. If algorithms are used without human supervision, your programmatic ads may appear in inappropriate places. For example, your brand may appear on fraudulent news websites or alongside objectionable (or even fraudulent) content.

Keep an eye on these activities and keep updating your blacklisted (banned websites) or whitelisted (allowed websites) websites to protect your brand safety. you will reach a smaller audience in this case and you avoid your brand being linked to controversial content.

Another major issue is the continued lack of industry openness regarding platform fees. Unlike conventional digital media buying, programmatic advertising has many participants. Ad exchanges, publishers, DPS and SSP providers, agencies, data verification providers, etc. are just a few examples. Many of these participants are crucial to the programmatic ecosystem, but they all also receive a share of the advertising budget. According to a 2020 transparency study, only 51% of advertiser spend in the UK programmatic market reached publishers. [4]. However, it can be very difficult to understand the fees that each party collects.

Determine the success of programmatic advertising campaigns

Accurate performance measurement is crucial because programmatic advertising involves different variables. Therefore, involving a skilled data scientist in campaign management can be beneficial. The top three most notable programmatic KPIs, according to the 2020 State of Programmatic Advertising Survey, were:

  • Return on Ad Spend (ROAS)
  • Return on investment (ROI)
  • Conversion after click (CTC)

Instead of sticking to industry standards, evaluate various metrics to prove which are accurate predictors of your unique business goals. Consider using a range of tactics to gain accurate campaign insights.

Does programmatic advertising have a future?

Programmatic advertising is only expected to gain momentum in the coming years thanks to new technologies, increased awareness, and more. In fact, according to current trends, programmatic marketing or advertising will soon overtake traditional marketing channels including radio, newspapers, and television.

We think we’ve just explored the tip of the iceberg when it comes to programmatic marketing, and there’s so much more to learn and discover in the future. This is true, not least because of the growing interest in creating virtual worlds, including the metaverse. Brands will have even more opportunities to promote their products on the internet when augmented reality (AR) and virtual reality (VR) become more prominent.

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Feature image source: Photo by Will Francis on Unsplash

Image 1 source: rawpixel.com

Image 2 source: Image by Arek Socha from Pixabay

Sources:

[1] Fisherman. B (2021) “Outlook for programmatic digital display advertising in the UK 2021” Insider Intelligence [online] Available at: https://www.insiderintelligence.com/content/uk-programmatic-digital-display-advertising-outlook-2021 [accessed October 2022]

[2] (2020) “THE STATE OF PROGRAMMATIC ADVERTISING STRATEGIES, TACTICS AND TRENDS” [online] Available at: https://ascend2.com/wp-content/uploads/2020/05/Programmatic-Advertising-Survey-Summary-Report-200512.pdf [accessed October 2022]

[3] (2022) “Programmatic advertising in the United Kingdom (UK) – statistics and facts” Statista [online] Available at: https://www.statista.com/topics/6912/programmatic-advertising-in-the-uk/ [accessed October 2022]

[4] (2020) “PROGRAMMATIC STUDY ON SUPPLY CHAIN ​​TRANSPARENCY” ISBA [online] Available at: https://www.isba.org.uk/system/files?file=media/documents/2020-12/executive-summary-programmatic-supply-chain-transparency-study.pdf [accessed October 2022]

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