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Editors note: This article has been updated in 2022 to reflect current developments in the world of programmatic advertising.
90% of digital ad spend in the UK is now programmatic. But, do you really know the in’s and out’s of programmatic success? If you’ve been curious about how to set up and run programmatic advertising campaigns – this article is for you.
In this article, we’ll set out a series of programmatic best practices. We’ll break the process down into seven easy steps that will help you understand and master programmatic advertising, keep up with your competition, and drive the best results.
Table of Contents
Getting started with programmatic advertising
Just so we’re all on the same page: programmatic advertising refers to the automated buying and selling of digital advertisements. Automating this process saves brands time and money. More importantly, programmatic ad campaigns can use data to target customers — allowing constant optimisation of KPIs during the customer journey, a growth in efficiency, and improved success. Now, let’s discuss how to get started with programmatic advertising:
Step 1: Prepare, set goals, and get ‘creative’
If you’re ready to boost your brand’s performance with programmatic ads, you’ll first need to do your research, set goals and think about your creative strategy.
Setting KPIs for programmatic advertising
Your performance goals will help you determine your ad campaign settings. For instance, if your goal is to increase traffic to your website, you’ll want to select wider targeting options and deploy a broader creative message.
Here are some common goals that programmatic advertising can help you achieve:
- Increase brand awareness
- Reach and target new audiences
- Retain and retarget existing customers
- Boost ROI and advertising metrics
- Decrease overall ad spend
- Increase ad visibility
- Be more efficient in reaching your target audience
Getting creative with creatives
Programmatic ad platforms enable you to create campaigns using traditional banner displays, video, native, and/or in-app ads — the so-called ‘creatives’. Each method allows you to reach customers in a slightly different way, and you’ll want to choose the method or combination of methods best aligned with your specific goals.
Let’s take a look at each of these creative mediums in a little more detail:
- Banner ads: These are highly effective for building brand awareness and reaching a broad audience. They’re also effective in retargeting existing customers, benchmarking a respectable 0.7% CTR when deployed this way. But the real value of banner ads is ‘top of funnel’ — keeping your brand front of mind and educating potential customers.
- Video ads: Video has the benefit of using sound, movement and narrative to grab customers’ attention. Video ads have a CTR of about 0.2%. However, again, a large portion of the value delivered by video ads comes from awareness. In addition to watching CTR, keep an eye on VTR (view-through rate), the number of full views your video ad receives. This is the best benchmark for understanding how effective you have actually been at reaching your audience.
- Native ads: Native ads are ‘editorial-style’ advertisements that blend in with the content of the website on which they’re displayed. Their organic feel is often successful in grabbing customers’ attention, and they have a CTR of around 0.2%. Native ads are particularly useful for driving high-quality, targeted traffic to your site.
- In-app ads: In-app ads are run on mobile apps. These have a relatively high CTR of 0.58%. In-app ads are an especially effective method to promote your own app via paid mobile user acquisition.
Dynamic Creative optimisation along the funnel
Dynamic Creative Optimisation (DCO) is a form of programmatic creative. Using DCO, you can generate unique ads for each customer, an ability that is particularly useful for product retargeting. However, DCO also makes sense to deploy in the mid- and upper-funnel — it’s worth experimenting.
If you want to know more about use cases along the customer journey, I can recommend our Growing Ecommerce podcast. In episode 23 “Programmatic advertising behind-the-scenes” podcast host Mike Ryan talks to smec’s Programmatic & Analytics Team Lead Markus Harant about the technology behind programmatic and how to measure the performance along the funnel:
Step 2: Select your DSP
Once you’ve set your KPIs and determined the type of creatives you’ll be using, it’s time to pick a demand-side platform (DSP).
A DSP enables you to control your ad spend, as you’ll be responsible for setting your own budgets. When you launch a campaign on a DSP, you specify your bid, and you’ll then begin competing against other advertisers for inventory. The highest bidder will win the impression.
DSP examples and criteria
There are a lot of DSP tools on the market. While some of these tools are designed around specific markets (Amazon DSP, for example), others are more generic. Some of the top players you should make sure to investigate are:
No matter which one you pick, DSP selection is incredibly important, as this will determine your success in programmatic. Partnering with tech experts can help you choose a platform and make the most out of its features. So when investigating, keep the following in mind:
- Targeting options, including browser, operating system, location, language and more.
- Analytics, as you’ll want easy, transparent, real-time access to data.
- A user-friendly interface, as you’ll need to be able to change settings regularly and view your data in an easy-to-analyse way.
- Tech support, for when you run into technical issues.
- Support for major creative ad formats, including video, banner, and mobile.
- Data sets available through the platform will make a big impact on how effectively you will be able to target those ads.
- Inventory is the number of advertising spaces a programmatic platform makes available to advertisers.
- Deal management allowing you to engage in different types of programmatic auctions across the inventory options — e.g. private auctions or preferred deals.
Step 3: Set your campaign parameters
Once you’ve chosen a DSP, you’ll need to specify the parameters of your campaign. Setting the necessary KPIs and aligning them to the right buying methodology is done through two main labelling criteria: insertion orders and line items.
Insertion orders (IO) are documents that contain overarching information about your campaign. That includes broad information about the inventory and ad (e.g. start and end dates, target audiences and the number of impressions), ensuring the proposal is processed.
IOs are documented proof of the ad proposal and should be reviewed thoroughly. They help advertisers manage their budgets and provide critical criteria allowing you to ensure your ad’s success. IOs can have an “active” or “paused” status, which controls whether or not the related line items are enabled to bid on inventory.
Line items are the granular details that make up your insertion orders. They allow you to set information like impression goals, ad types (display or video), and targeting. They contain information about how specific ad creatives are intended to be displayed, and are important to use across your campaign. Critically, you can set ‘line item types and priority’. This allows you to create a hierarchy of how your ads compete against each other, and for which types of placements.
Step 4: Use data to drive your strategy
To work well, programmatic ads require quality and valuable data. This data gives you the insights you need to target customers and drive sales.
There are three types of data you can use to inform your campaigns and target customers: first-party, second-party and third-party.
- First-party data is perhaps the most valuable data, and it’s free, as this is information that you gather directly from your customers. It includes data about behaviours and interests; actions on your website and apps; CRM and subscription information; social data; survey results; and customer feedback. First-party data is especially useful for making predictions, gaining insights and personalising the content and ads you use to attract customers.
- Second-party data is someone else’s first-party data. It can be purchase second-party data directly from the source via a private marketplace. You can use it in the same way as first-party data, and includes website activity information, mobile app usage, social media data, customer survey results, etc. If you have a small audience, second-party data can add scale to your data and enable you to reach new audiences.
- Third-party data comes from large data aggregators that pull data from various sources. This type of data is not exclusive, so your competitors could have access to it as well. You can combine third-party data with your first-party data to enhance insights and gain scale. Third-party data is also an extremely valuable tool in product development and advertising new products.
Our client INTERSPORT uses their data to successfully steer upper and mid-funnel as well as remarketing programmatic advertising campaigns. Their case is featured in our Programmatic advertising ebook. Check it out to learn more about INTERSPORT’s strategy and how automation comes into play there:
Changes to third-party data affecting programmatic advertising
Online advertising is a constantly evolving ecosystem. Although third-party data has been a long-standing asset for programmatic targeting (one you should incorporate into your strategy), that reality is about to change.
In 2019, Google announced the Google Privacy Sandbox — an update intended to protect users’ privacy and security. Although Sandbox just applies to Chrome (and other browsers running on Chromium, e.g. Opera), Safari and Firefox are in the process of following suit. The introduction of the Privacy Sandbox comes hand in hand with the planned discontinuation of third-party cookies (so the source of third-party data) in Chrome that will come into effect in 2024.
To overcome this issue, brands using programmatic ads will likely need to embrace artificial intelligence. Working with Programmatic advertising specialists can be a smart move here, as the right tech partners will have the expertise necessary to guide you through these issues and create successful programmatic campaigns with first-party data. We are more than happy to support you with this endeavor.
Step 5: Define targeting options
The goal of targeting is to ensure your ads are reaching the right people. Once you’ve set those campaign parameters and determined which data you’ll be using, you’ll need to define your targeting options. Use your data and your goals to choose the type of creative you’ll use to reach each customer persona.
As you define your targeting options, you’ll also need to look at your data and take into account language and location. You should also analyse your data to determine whether you’d benefit from setting geo-specific campaigns. Depending on who you’re trying to reach, you can even change your settings to target different browsers, devices, and operating systems.
Step 6: Prepare for launch
You’re almost ready to launch! There are just a few final things you’ll need to do before your campaign goes live.
You’ll need to:
- Choose your traffic sources
- Upload your creative to your DSP
- Enter the attributes for the creative
- Adjust your creative targeting settings
Once you’ve taken these steps and double-checked your work, you’re ready to launch.
Step 7: Optimise and fine-tune your campaign
As soon as your campaign is live and running, it’s time to start optimising. Use your DSP to access real-time reports and analyse the data contained within these reports to understand the effectiveness of each source through measuring important metrics, such as the campaign’s CTR, CPC, overall spend, conversion value. Use this information to identify potential problem areas in your ad campaign, and use your data to devise strategies to solve these problems.
It’s also important to experiment and test outcomes using frequency capping. By limiting the number of times that an ad is shown to single users, you can reduce your ad spend and increase your campaign’s unique reach. Change your frequency capping and review the impact on CTR and ROI to look for ‘sweet spots’ that maximise conversions while limiting costs.
Remember, this is both a science and an art, and you can (and should) keep adjusting and fine-tuning your campaign. Programmatic campaigns are never ‘done’. You regularly need to update and review your operation.
Master programmatic advertising – a summary
We’ve covered a lot of ground here, so let’s quickly review the seven steps to mastering programmatic advertising.
You’ll need to:
- Prepare and set goals: Set your KPIs and begin thinking about your creative approach.
- Select your DSP: Tool selection is an integral part of your success, as it will determine how you access your campaign settings and analytics data.
- Set your campaign parameters: Your settings will determine your campaign’s length and budget, among other factors.
- Use data to drive your strategy: Data enables you to target specific customers and markets and get more from your ad spend.
- Define targeting options: Armed with data, you can make the most precise choices to target the customers you want.
- Prepare for launch: Choose your traffic sources, upload your creatives and ensure everything is ready to go live.
- Optimise and fine-tune your campaign: Once your campaign is live, you’ll need to continually analyse your data and reports to make adjustments and optimise ad performance.
Making the most of programmatic advertising
Mastering programmatic is definitely a journey, but with perseverance and the right approach, it can be an extremely lucrative endeavor. If you’re still struggling to get started or you simply want the added value that comes with outside expertise, do not hesitate to contact us. Together we will evaluate how we can best elevate your campaign performance through leading-edge technology and savvy strategy. But don’t worry: In the end, it is up to you to decide if we are the right fit.
Remember: your customers are already out there — programmatic ads will help you reach them.