What is Programmatic Display Advertising?

Programmatic advertising is a way to buy and sell ads on digital spaces. The buying and selling of ads is all done through an algorithm. 

The algorithm, or calculation, is based on data about users that includes their demographics (age, gender, location and more) and their past digital behavior (sites they visit, shows they watch and more).

The algorithm also includes components that factor in the maximum amount of money companies will pay for their ads to appear, and how much publishers are willing to sell ad space for.

In other words, it’s a way to buy and sell ads without too much human involvement.

Programmatic advertising also means you can target specific users. You no longer have to show an ad to everyone in the hopes that some people take an action, like visiting a store or buying a product. 

That’s the method traditional TV and radio ads took. Ads appeared to everyone on tv or everyone tuned into a radio station. But only a few people took action after seeing or hearing the ads.

With programmatic advertising, you target the group of people most likely to be interested in your products and services, increasing the likelihood that more people will take an action after seeing or hearing the ad. And you do it for a lower cost than traditional tv or radio commercials. 

At SEO Design Chicago, we make programmatic advertising even better  by offering a proprietary tool called the Active Pixel Program. We,  a group of tech-savvy people, developed a unique algorithm to make digital ad sales and purchases easier. 

 

What is Programmatic Display Advertising Specifically?

With programmatic advertising, ads can appear in a variety of formats including video ads, audio ads, and ads that include text and images.  Let’s look at each closely. 

 

• Connected TV (CTV) Ads

Programmatic Connected TV advertising means video ads appear on smart TVs that include streaming services like Hulu. On Hulu, for example, programmatic ads are called over-the-top (OTT) advertising. These video ads are non-skippable (unless a person pays for a no – ad subscription, and are shown before, during, and after streamed content on Hulu.

This is a great way to advertise since subscription services, and ad-supported applications, have risen substantially the past few years. 

• Audio Programmatic Ads 

Programmatic audio means companies can run ads during or before podcasts, or in between songs or programs on streaming services like Spotify, Soundcloud and Google Play Music. 

 

• Digital Out-of-Home Programmatic Ads

Think of old school billboards – the static large placements along highways. Now imagine those ads are screens that are constantly changing. Programmatic Out-of-Home advertising means ads are shown on digital billboards, digital screens, and other physical spaces like bus shelters or panels in malls.  These digital ads are perfect for companies that want to sell products or services to people in specific zip codes. 

 

• Social Programmatic Ads

Facebook, Instagram, Snapchat, TikTok, and X all allow for programmatic advertising. Companies can pay to appear in the feeds of certain target groups. 

• Native Programmatic Ads

Native ads are embedded into the website or app a person is looking at. Instead of an obvious banner ad at the top of a website, or a pop-up video ad, native ads blend in more seamlessly into a website.  

• Display Programmatic Ads

Now here’s the heart of this blog post. Programmatic display advertising is the most common form of programmatic advertising. They are ads that contain a combination of words, images and hyperlinks and appear in the header, footer, or sidebar of websites or apps.

Display ads are arguably the most powerful of the various programmatic ad types because companies can show them ONLY to people searching for certain terms online, in certain zip codes and based on other demographics, like age, gender and household income levels. Out-of-home ads can’t zero in like this. They’ll appear to  EVERYONE driving down a highway, for example. Age, income level, gender and other issues aren’t a factor. 

 

Why Display Programmatic Ads are So Popular

Let’s be clear. Digital ads are incredibly effective because more people are consuming personalized content through digital devices. Traditionally, there wasn’t as much content out there. People couldn’t personalize what they watched, read and listened to the way they can now. Accordingly, ads were more general, targeting “everyone.”

PwC’s Global Entertainment & Media Outlook report predicts that by 2027, digital ads will account for nearly 3/4s (70.8%) of most companies’ advertising budgets. 

Programmatic display ads can be in the formats of text, video, audio, gif, images, HTML5 and Flash on specific web pages like search engine page results. The ads are often personalized for specific users, tailored to what they’ve recently searched for or things people in a user’s demographic group often look for online. 

Programmatic display ads include Google Ads, but also include placement on other websites that work with programmatic vendors. 

At SEO Design Chicago, we have developed a programmatic display algorithm called the Active Pixel Program. This allows companies to run ads on Google owned sites like Gmail and YouTube, but also a variety of other websites, like Amazon and Walmart.

One reason programmatic display ads are so popular is that a decision maker within a company doesn’t have to agonize over how and where each and every ad dollar goes. An automated system, like the Active Pixel Program, automates the decision-making process of ad placement. That said, decision makers at companies decide beforehand how much they’re willing to pay for ad placement and on what platforms. Decision makers can also change their strategy at any point if the desired results aren’t being achieved.

How do you know if your goals are being met? First, we work with the marketing team within a company to establish goals for ads. Of course, one goal is sales. But other goals can be increased web traffic, having customers put items in carts even if they don’t complete the purchase, and lead generation.

We then give you regular reports, that are easy to understand, showing if your ads are reaching these goals, along with where your ads are being shown, to whom, on what devices and when. 

If you don’t like what you’re seeing, we’ll change your goals and other things, like the maximum amount you’re willing to pay for ads. 

 

What Do Bids Have to Do with Programmatic Display Advertising?

Part of programmatic advertising, and our Active Pixel Program, includes setting a limit on the maximum amount you’re willing to pay to run an ad in any particular space, like a website.

This process is known as real time bidding. It takes place super fast, even faster than we can type this sentence.

When we set you up with our Active Pixel Program (or if you try to run programmatic advertising campaigns on your own), you tell us what the maximum amount of money you’re willing to spend on an ad is.

Basically, whenever a website has an advertising space they want to sell, they put the space in an auction.  That’s when the real time bidding takes place. In less than a second, the space is sold to the company who placed the highest bid for their ad to appear in that spot. If you win the auction, your ad will appear.

Later, you can analyze the impact the ad had on users through analytics reports. You’ll see how many people saw the ad, and what – if anything – they did after seeing it. Did they call your business (you can set up a unique phone number tied to each ad that is forwarded to your company phone number)? Did they click on the ad? If they did click on the ad, what if anything did they do when they arrived on a webpage that ad linked to?

 

What is the difference between programmatic advertising and display ads?

Display ads are one  type of programmatic advertising. 

Display ads are the content themselves – the text, photo(s) and hyperlinks. 

Programmatic display advertising is the process of getting your ads to appear on websites. 

Some display ads exist, but are not tied to programmatic advertising. For example, a publisher can sell a banner ad space to one particular company. That ad could appear to users who visit the site anywhere in the world. 

Increasingly, both publishers and businesses are seeing that this “everyone sees the same ad” approach doesn’t work as well as programmatic advertising. 

Programmatic display advertising only shows ads to specific users based on different marketing demographics, such as shopping and browsing behaviors across devices.

One Thing To Know About Programmatic Display Advertising

There’s a learning curve you must overcome when dipping into the programmatic advertising space.  Working with partners like us at SEO Design Chicago can help businesses swim in the programmatic advertising waters, and not sink in it. Eventually, you may learn enough from us to take over your campaigns.  

Or maybe you’ll realize that it’s best left to people like us. We have the time, and expertise, to run your programmatic advertising needs through our Active Pixel Program. 

Reach out to us today through our chatbot, email, or the regular old phone. We can schedule a consultation and move forward from there.