With each passing day, there are advances in technology and with it new and effective ways of reaching your audience.

While the potential this creates for digital marketers and businesses using digital channels to reach audiences, this also means that there are more tools to learn and master and more tactics to work into your marketing strategy.

The benefit is that your strategy will become more powerful and efficient, and your targeting more precise. But it also adds to the ever-growing list of terms and tech you need to conquer.

Introducing Programmatic Advertising

Programmatic advertising is a recent addition to the broad spectrum of digital advertising tools and techniques — and one you should get familiar with, in particular regard to the differences between programmatic and display ads.

Is programmatic taking over for display networks? Do you need to be using both? Let’s take a look at these two digital advertising tools to help you determine how to best leverage them both to boost your return on your online advertising investment.

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What is Programmatic Advertising?

Programmatic advertising is an automated method of buying ad space on a range of websites. By employing machine intelligence, you can purchase ad placements that are the best fit for your business based on the specific parameters you set.

The advertising space is sold through ad exchanges rather than an ad network. A site publisher offers the ad space and advertisers enter automated bids to purchase it. The exchange uses analytics to sell and place ads in the space in real-time — that is, as the site is loading — determining where to place the ad to get the best ROI.

Demand-side platforms are used by the ad buyer to place bids on ad space from the supply-side platform, which is used by the ad sellers. The exchange’s job is to match up the two with the best placements.

Ads can be targeted by keyword, demographic and interest, in similar fashion to display networks. However, programmatic advertising offers more in-depth targeting by leveraging third-party data, such as what the user ordered for dinner and whether they ordered it through a platform such as Uber Eats.

When a user visits a website, the exchange extracts that information. If it matches the target you’re trying to reach, your ad enters an auction with others looking to reach the same target. The highest bidder’s ad will be shown on the website.

What is Display Network Advertising?

A display network serves as an interface between an advertiser and a site publisher. An advertiser can select a target audience based on various criteria and control the schedule and placement of an ad, such as if it is to display in an app, on a website, or even on a specific page of a website.

Literally millions of sites can be targeted in this way and the ad placements are finalised ahead of time based on how you bid.

This is one of the most tradition forms of online advertising available, and in most cases the ads are banners of various sizes.

Display networks cover a significant portion of the internet. For example, the Google Display Network includes more than two million websites, reaching more than 90% of users worldwide.

Other network options include Yahoo and Bing. You also have options for different bidding strategies based on how you want to pay — by impression, acquisition, or click.

Differences and advantages

There are many similarities between the two ad types. Both can reach a global audience, can be targeted by demographic and use search history information.

Where they tend to differ is in overall reach and the different types of ads that can be run. They have their pros and cons, which you can take advantage of to develop the right advertising strategy for you.

Programmatic Advertising pros and cons

While it seems as though Google owns the internet, the Google Display Network and other networks can only give you access to the websites that are within their network. While it is significant, the reach isn’t always as wide as what can be achieved through programmatic advertising.

Programmatic ads provide access to the Google Display Network, in addition to various ad exchanges. In total, the reach for programmatic ads is more than 95% of the internet. The addition of all those long-tail websites provides a substantial inventory, so there is potential to be seen by more people than on a display network.

Programmatic ads are often native, so they are designed to fit into the design of the page where they show up and not look like an ad. This makes it more likely they’ll be seen and result in better customer engagement. There is also the option to run rich-media ads, which open up super interactive options for a campaign.

These ads work with vast user-generated data rather than search history alone, so you can be far more specific with targeting than with display ads. TO further improve targeting, an advertiser can also add in owned collected data.

The downsides here are that these ads have more of a learning curve to make effective use of them, so it’s a better option for those who already have a good grasp on digital advertising.

Pricing is almost always in CPM (cost per thousand impressions) and if you underbid, you might get no impressions at all. Most ad exchanges require a minimum per month ad spend which might be more than you should invest if you’re just starting with online ads.

Display Network Advertising pros and cons

Display networks offer closed advertising ecosystems, which means you’re limited to placing ads on the websites that are part of the network. While you might miss out on a lot of websites, most networks claim to have a high reach in terms of internet users.

Networks can offer good targeting options, including keyword, topic, interest and demographic. Most use their own search data, which might not be as granular as the data for programmatic. Whether this is a pro or con depends on how precisely you need to target to find your audience.

There is no minimum spend expected in a display network, so you can start by bidding just a few dollars, then scale up as you learn more and refine your specific requirements.

Benefits can also be found in a varied pricing model, which allows for more flexibility. Your options include CPC (cost per click), CPM (cost per thousand impressions) and CPA (cost per action).

The actions you pay for can be getting a user to sign up for a newsletter or a free trial. Impressions are guaranteed regardless of how much you bid.

One major downside here is that display ads tend to look like ads. Not all publishers in these networks can support rich-media ads, so you miss out on the interactivity that can overcome banner blindness. Around 90% of online ads go unnoticed by users.

Which to choose — Programmatic or Display?

As your digital marketing strategy and sophistication evolves, it is important to consider all the advantages and challenges of both programmatic and display ads.

Programmatic advertising has clear advantages for a sophisticated strategy, but it might offer more features than what is required and at a higher cost. Consider a mix as you build your ad portfolio.

If you need help refining your online advertising strategy and how it fits within your overall marketing strategy, contact us for an obligation free chat. We help businesses of all shapes and sizes with all aspects of digital marketing to help them reach customers across different platforms.

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