Programmatic advertising is the process of automating the purchase, sale, delivery, and measurement of digital advertising campaigns via advertising technology (AdTech) platforms.
These AdTech platforms allow advertisers, publishers, and agencies to create, run, and optimize ad campaigns with minimal human involvement.
Programmatic advertising is not a new concept, but it is constantly evolving and becoming more sophisticated. According to eMarketer, programmatic ad spending in the US is expected to reach $98.55 billion in 2023, accounting for 88.7% of all digital display ad spending.
If you want to take advantage of this growing trend and boost your online marketing performance, you need to choose the best programmatic advertising services for your business.
In this article, we will explain how programmatic advertising works, what benefits it offers, and what are the best programmatic advertising platforms to use in 2023.
How Does Programmatic Advertising Work?
Programmatic advertising works by using software and algorithms to automate the buying and selling of ad space on various digital channels, such as websites, mobile apps, social media, video, audio, and connected TV.
The process is typically divided into four categories: demand-side platforms, supply-side platforms, ad exchanges, and data management platforms.
- Demand-side platforms (DSPs) are used by advertisers and agencies to set up and manage programmatic campaigns on multiple ad exchanges. A few examples of well-known DSPs are Google Display & Video 360, Amazon Advertising, Roku, and Adform.
- Supply-side platforms (SSPs) are used by publishers and app developers to sell their ad inventory to advertisers via ad exchanges. A few examples of well-known SSPs are Google Ad Manager, PubMatic, AppNexus, and Rubicon Project.
- Ad exchanges are the marketplaces where DSPs and SSPs connect and bid on ad impressions in real time. A few examples of well-known ad exchanges are Google Ad Exchange, OpenX, Index Exchange, and MoPub.
- Data management platforms (DMPs) are used by both advertisers and publishers to collect, store, and analyze user data for audience segmentation and targeting. A few examples of well-known DMPs are Oracle Data Cloud, Adobe Audience Manager, Salesforce Audience Studio, and Lotame.
The programmatic advertising process can be summarized as follows:
- A user visits a website or an app that has ad space available for sale.
- The website or app sends a request to an SSP, which provides information about the user and the ad space to an ad exchange.
- The ad exchange broadcasts the request to multiple DSPs, which use user data and targeting parameters to determine the value of the ad impression and place bids accordingly.
- The ad exchange selects the highest bidder and sends the winning ad to the website or app, which displays it to the user.
- The advertiser pays the ad exchange, which pays the SSP, which pays the publisher, minus their fees.
All of this happens in a matter of milliseconds, making programmatic advertising a fast and efficient way to reach the right audience at the right time with the right message.
What Are the Benefits of Programmatic Advertising?
Programmatic advertising offers many benefits for both advertisers and publishers, such as:
- Increased efficiency and scalability: Programmatic advertising eliminates the need for manual negotiations, contracts, and requests for proposals, which can be time-consuming and error-prone. It also allows advertisers and publishers to access a large and diverse pool of inventory and audience across multiple channels and formats, which can increase their reach and exposure.
- Improved targeting and personalization: Programmatic advertising leverages user data and artificial intelligence to deliver relevant and customized ads to each user based on their demographics, interests, behaviors, location, device, and context. It also enables dynamic creative optimization, which means that the ad content can be adjusted in real time based on the user’s response and feedback.
- Enhanced performance and measurement: Programmatic advertising provides advertisers and publishers with real-time data and insights into their campaign performance and outcomes, such as impressions, clicks, conversions, and return on ad spend. It also allows them to test, optimize, and refine their strategies and tactics based on the data and feedback, which can improve their efficiency and effectiveness.
What Are the Best Programmatic Advertising Platforms to Use in 2023?
There are many programmatic advertising platforms available in the market, each with its own features, benefits, and drawbacks.
Choosing the best one for your business depends on your goals, budget, and preferences.
However, to help you narrow down your options, we have selected five of the best programmatic advertising platforms to use in 2023, based on their popularity, reputation, and functionality.
Google Display & Video 360
Google Display & Video 360 (DV360) is one of the most widely used and powerful programmatic advertising platforms in the world. It is part of the Google Marketing Platform, which integrates various Google products and services for digital marketing.
DV360 allows advertisers and agencies to plan, execute, and measure programmatic campaigns across display, video, audio, native, and connected TV formats.
It also provides access to Google’s extensive inventory and audience network, as well as third-party inventory and data sources.
Some of the key features and benefits of DV360 are:
- Unified platform: DV360 integrates with other Google products and services, such as Google Ads, Google Analytics, Google Cloud, YouTube, and Google Search, which can provide a seamless and holistic marketing experience.
- Advanced targeting and optimization: DV360 leverages Google’s rich user data and machine learning capabilities to deliver relevant and personalized ads to each user. It also offers various tools and options for campaign optimization, such as automated bidding, frequency capping, budget pacing, and creative optimization.
- Comprehensive reporting and attribution: DV360 provides detailed and actionable reports and insights into campaign performance and outcomes, such as reach, frequency, viewability, brand lift, and sales lift. It also supports various attribution models, such as last-click, first-click, linear, time decay, and data-driven, which can help measure the impact of each touchpoint on the customer journey.
The main drawback of DV360 is its high cost and complexity. DV360 is not a self-service platform, which means that advertisers and agencies need to work with a Google partner or reseller to access and use it.
It also requires a minimum monthly spend of $10,000, which can be prohibitive for small and medium-sized businesses. Moreover, DV360 can be challenging to navigate and master, especially for beginners, as it has a steep learning curve and many features and options.
Amazon Advertising
Amazon Advertising is another popular and powerful programmatic advertising platform that allows advertisers and agencies to reach and engage millions of Amazon shoppers across various channels and formats, such as display, video, audio, and sponsored ads.
It also provides access to Amazon’s exclusive inventory and audience network, as well as third-party inventory and data sources.
Some of the key features and benefits of Amazon Advertising are:
- Massive reach and influence: Amazon Advertising can help advertisers and agencies reach a large and loyal audience of Amazon shoppers, who are more likely to have high purchase intent and trust in Amazon’s brand. According to Amazon, its advertising platform reaches over 200 million monthly unique visitors in the US alone2.
- Unique data and insights: Amazon Advertising leverages Amazon’s rich and proprietary user data, such as shopping history, product reviews, wish lists, and Prime membership, to deliver relevant and personalized ads to each user. It also provides valuable insights into user behavior and preferences, such as search terms, product categories, and purchase patterns.
- Flexible and transparent pricing: Amazon Advertising offers various pricing models, such as cost-per-click (CPC), cost-per-thousand impressions (CPM), and cost-per-view (CPV), which can suit different campaign objectives and budgets. It also provides clear and detailed reports and invoices, which can help track and optimize campaign performance and spending.
The main drawback of Amazon Advertising is its limited inventory and creativity. Amazon Advertising mainly focuses on its own inventory and audience network, which can limit the reach and exposure of advertisers and agencies outside of Amazon’s ecosystem.
It also has strict guidelines and requirements for ad formats and content, which can limit the creativity and flexibility of advertisers and agencies.