Traditional advertising methods involve negotiating with website owners to occupy screen space. And while each bit of screen real estate is precious, it doesn’t guarantee reaching your target audience.

With programmatic advertising, you can use automation and analytics to reach the right people at the right time, increasing your return on investment (ROI). Read on to learn how to adopt this marketing strategy to maximize campaign results.

What’s programmatic advertising?

Programmatic advertising, or programmatic media buying, is a marketing approach where you use automation to buy and sell online advertising space. Instead of traditional, manual negotiations between you and publishers, you leverage software to make real-time transactions.

This online advertising strategy uses algorithms, artificial intelligence (AI), and data analytics to identify the best opportunities for displaying ads to a highly targeted audience, ensuring your content reaches the relevant people.

How programmatic advertising works

Here’s a step-by-step look at how programmatic advertising works:

• Campaign setup. First, you can set up a programmatic advertising campaign on a demand-side platform (DSP), an automated system that helps you choose your audience, ad format, and budget. You can also add data to DSPs, like customer demographics and interests, to identify who should see your ads.
• Bidding. When someone visits a website with ad space available, the website (or publisher) shares information about that visitor to an ad exchange — a marketplace where you bid for opportunities to show your ads to site visitors. The DSP evaluates all the bids from different companies based on how well the visitor’s persona matches an advertiser’s target audience and budget.
• Ad delivery. The winning bid appears on the publisher’s site almost instantly. This process occurs in milliseconds while the website loads for the visitor, ensuring a smooth and fast browsing experience.
• Campaign optimization. You can use the DSP to collect and analyze performance data to measure campaign success. If you don’t see the desired results, you can adjust your strategy immediately by changing your target audience, ad format, and messaging for a higher ROI.

Types of programmatic advertising

You can choose between bidding and non-bidding options when you buy programmatic ads. Here are four common types of programmatic advertising to consider:

1. Real-time bidding

Real-time bidding (RTB) is an open auction system in which the highest bidder receives advertising space. When someone visits a website, an auction occurs in real time among you and other advertisers for the opportunity to display programmatic ads to that visitor.

2. Private marketplace

In a private marketplace (PMP), publishers invite a select group of advertisers to bid on premium screen real estate. It gives sites greater control over who can access high-quality ad placements that yield higher bids and conversion rates.

3. Programmatic direct

In this approach, you can directly buy ad inventory without bidding, typically through prenegotiated agreements with publishers. It allows guaranteed impressions on specific sites, ensuring visibility to a niche audience.

4. Dynamic creative optimization

Dynamic creative optimization (DCO) tailors ad content based on user behavior, demographics, and location to ensure each person sees the most relevant ads. It offers a more personalized browsing experience with a higher chance of people interacting.

The benefits of programmatic advertising

Whether you’re trying to boost your ROI or reach broader audiences, here are several benefits programmatic advertising offers:

• Efficiency and automation. Programmatic advertising automates ad buying, bidding, and placement, which reduces manual labor so you can focus on more creative and strategy-based tasks, like creating the ads and refining marketing campaigns.
• Precise targeting. Programmatic advertising allows you to use real-time data and machine learning through DSPs to target highly specific audiences based on demographics, behavior, and interests. Reaching the right people at the right time across multiple marketing channels increases your engagement and conversion rates.​
• Increased reach and scale. This advertising tactic connects you with thousands of publishers and expands potential audience reach. With websites and formats from different industries, you can use omnichannel marketing to reach multiple demographics worldwide.
• Real-time optimization. Programmatic DSPs provide real-time campaign insights that allow you to quickly adjust your target audience, formats, and budgets. You can identify trends and make data-driven decisions to improve performance and avoid low-quality or fraudulent ad placements.‍
• Adapting to new trends. This method uses AI and machine learning to evolve and meet changing consumer behaviors. With AI-powered personalization, you can deliver highly customized ads across audio, in-app, and even augmented reality (AR) or virtual reality (VR) formats.

Common formats for programmatic advertising

You can use programmatic advertising to buy ad space across various formats, like:

• Display advertising involves static or animated banners that appear on websites and apps. These ads build brand awareness and use retargeting strategies to remind previous visitors about a brand.
• Video ads appear within video content, like pre-roll (before a video plays) and mid-roll (during a video) ads. They can also be standalone ads on social media feeds or streaming platforms.
• Native ads blend in with a website’s content and typically appear as a sponsored post that matches the look and feel of the surrounding material. For example, a native ad might appear as a suggested article on a news site that seamlessly integrates with other content.
• Social advertising involves ads on social media platforms that engage people based on their activity and interests. These include image, video, and carousel ads. A cloud storage company might use Facebook’s programmatic advertising feature to show plan recommendations for people who follow tech influencers, for instance.

Effective programmatic advertising: 4 best practices

After choosing the type and format, follow these actionable strategies to maximize your programmatic ads.

1. Define clear objectives and KPIs

Begin by setting specific campaign goals and performance metrics. Pair objectives like increased brand awareness and conversions with key performance indicators (KPIs) like click-through rate, cost per acquisition, and return on ad spend.

For example, a software company looking for free trial sign-ups might set a target of increasing conversions by 20% within three months.

2. Segment and target your audience

Divide your audience into various segments based on demographics, browsing behavior, location, and purchasing intent. This helps you create personalized messaging that resonates with each segment.

For example, a cybersecurity company could break their audience into:

• Students. This ad could offer a discounted rate for the company’s password protection browser add-on and mention how student data is worth protecting.
• C-suite professionals. This ad might boast how the company’s services can preserve a company’s reputation and protect sensitive client data.

3. Use an omnichannel approach

Leverage programmatic advertising to reach your audience across multiple touchpoints, like web, mobile, and TV. Omnichannel marketing with consistent messaging reinforces your brand, and varying formats cater to different segments and their media consumption preferences.

4. Test and optimize continuously

Use A/B testing to experiment with various headlines, formats, and targeting strategies to see what works best for your audience. You can also leverage DSPs and analytics platforms to monitor performance and adjust marketing efforts for a better ROI.

Drive attention to your website with Webflow

Programmatic ads might draw attention and bring visitors to your website, but the sales funnel doesn’t end there. With Webflow, you can create visually appealing, modern websites that attract customers. Then, you can integrate analytics apps to monitor your audience’s behavior and preferences.

Plus, Webflow offers a scalable content management system that brings editorial, design, and development teams together in one platform, allowing you to align teams around marketing campaign needs.

Grow your business and boost your advertising reach with Webflow Enterprise today.