The Beginner’s Guide to Programmatic Advertising

Just when you thought that you knew it all about digital marketing and advertising, a new term crops up – programmatic advertising.

Not sure what it means? Don’t worry. We’ve put together this beginner’s guide to programmatic advertising.

two people working on programmatic advertising

The Old Way Advertising Worked

Did you watch Mad Men, the fictionalized drama series about advertising in the 1960s? Well, advertising did work that way for a long time. Companies hired creative ad agencies, like the ones Don Draper ran, to help them create an ad. Companies paid an ad agency a fee for this, and also paid the people who owned TV stations, radios or print publishing houses a fee to run their ads.  

There were a lot of people involved in the process, and it took a long time to create an ad, negotiate a fair price to pay for running it and then see if the ad really helped increase a company’s bottom line. 


The Way Advertising Works Now

Today, companies invest in digital ads as much, or perhaps even more, than they do for print, radio and tv ads.

Most studies say that for every $1 spent on digital ads, companies usually net a $2 profit. 

In the old model, a company dealt with multiple people, and different companies, to find ad space, negotiate a fair price, create ads, and get data that measures an ad’s input.

Today, companies can use technology and tools to complete big parts of the process, specifically the parts involving finding ad space, negotiating a price, and measuring an ad’s impact. 

Delivering the right ads to the right people with technology – instead of humans – is called “programmatic advertising.” 

Another way to look at it is this: Programmatic advertising includes all steps that involve the ways ads are bought and sold. 

It can be hard for beginner’s to wrap their heads around, so we’ll explain programmatic advertising more, and how our Active Pixel Program, a proprietary process that we at SEO Design Chicago developed, can make the process even easier for companies. 


The Definition of Programmatic Advertising 

If you’re still scratching your head over the way we defined programmatic advertising so far in this post, give us another shot. Think of it this way:

Programmatic advertising is the use of software to buy and sell digital advertising space. With programmatic advertising, and our proprietary Active Pixel Program, you don’t need to manually  request price quotes for ad space and negotiate that price. The Active Pixel Program uses an algorithm, a set of automated rules to be followed in calculations related to ad campaigns, to buy and sell digital space for online ads to be displayed.


The History of Programmatic Advertising

Programmatic advertising started in the 1990s, when digital ad networks were created to help connect website owners with companies that wanted to advertise on their websites. 

These networks were composed of multiple websites.  The owners of these websites worked together to offer their ad space to other companies looking to advertise their products. 

In the mid 2000s, real time bidding was developed. This allowed advertisers to bid in real-time on ad spaces, as they became available on various websites and apps. This meant that companies could target specific audiences based on  things like demographics, browsing behavior, and location.

So for example, a company that sold dog collars could bid on empty ad space on several websites related to the dog or pet industry. 

So programmatic advertising allowed companies to place the same ad on multiple sites, all without having to call a human or negotiate the price. 


How AI is Changing Programmatic Advertising

Programmatic advertising is even more powerful now that artificial intelligence is on the scene. Our proprietary programmatic advertising program, for example, uses AI to help companies pay the least amount of money to run ads on websites that produce results. 

AI can analyze the actions of what people do when they see an ad, and then make decisions on what to do next. For example, if a user clicks on an ad, that’s great. You’re advertising in the right place. If they don’t click, but scroll past an ad, that ad is still likely in a good spot. 

AI can then make decisions about what to do next with that same ad. The ad can stay in the same spot, abandon the website and advertise somewhere else or place the ad on the same site but somewhere else. 

AI in programmatic advertising

What Our Proprietary Software Does

Our program is called the Active Pixel Program. We can’t tell you too much about our algorithm (we don’t want our competitors to steal our great idea) but we can tell you a little.  Pixels are a type of technology that digital marketers can implement to track and measure the performance of ad campaigns and automatically adjust future ad campaigns based on past performance. 

Ad pixels are snippets of computer code. They can be embedded on a website so that a person visiting a website can’t see the code. This code, called pixel code, comes in two types. 

  • 1. 1×1 image pixel: This is a type of code used to track consumer behavior or actions based on how often a person is exposed to an ad. This method is standard and the most common for advertisers to use.
  • 2, JavaScript: This type of code is used when advertisers want more detailed information, like how long the user stayed on the page, what they clicked on, and more. However, this type of coding  is not used as often because many clients, and regular users, don’t want their behavior tracked in such detail. 

Once the programmatic pixel advertising is placed on a web page, business owners can see which users are visiting their sites, and what they’re doing once they’re there.  

At SEO Design Chicago, we can tell you more about what our algorithm does once it has sufficient data. 


Setting Goals

There’s one main goal when it comes to advertising campaigns – increasing profits. But you should have smaller goals in mind too. 

It is important to have your goals set from the start. To do this, we’ll work with you to consider the steps people have to take before making a purchase. Achieving these goals count too:

  • For example, you may want to:
  • Increase brand awareness
  • Get people to download your ad
  • Get people to follow you on social media
  • Increase email newsletter subscribers
  • Have people fill out “contact” forms 

These are all goals you can set before using our Active Pixel Program. Our algorithm can track if you’re reaching these goals through your ads. 

setting goals picture


Making Sure Your Ads Appear Where You Want Them To Appear

There’s a lot of bad stuff online. Obviously, you don’t want to advertise your products on websites that contain fake news, harmful content, or are completely unrelated to the goods and services you sell.

That can happen when one uses programmatic advertising, because so much of the process is automated. 

The good news is that our Active Pixel Program alerts you if your ad is appearing in places you don’t want it to show up. 

We can block specific websites and our algorithm constantly monitors the sites ads appear on. If you get an alert about a suspicious site, you can easily have the ad removed. 


The Pros of Programmatic Advertising

Some benefits, especially when it comes to SEO Design Chicago’s Active Pixel Program, include: 

  • Super Charged Laser Targeting of Audiences: The Active Pixel Program allows companies to target specific audiences with their ads, guaranteeing a maximum return on investment.                                                                                                                    
  • Real-Time Data: With programmatic advertising, and especially with the Active Pixel Program, companies can monitor ad campaign performance in real-time and make instant adjustments to their content and strategy.                                                         
  • Cost Efficiency: The Active Pixel Program erases the need for humans to negotiate ad space, create ads, and manage paperwork and payment.                                                                                                                                                                          
  • Growth: The Active Pixel Program helps advertisers think beyond their current limits. 


 Next Steps

There’s only one way to see if programmatic advertising, and our Active Pixel Program, is right for you. Reach out to us. We’ll start off the conversation with a free SEO audit of your site. We’ll then talk about what you’ve done in the advertising space so far (it’s OK if you haven’t done anything). We’ll discuss your goals, budget and hesitations. In most cases, our Active Pixel Program will only help your company grow. 

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