What is programmatic advertising
May 16, 2023
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What is programmatic advertising

“Today’s constantly connected consumers have changed the way they purchase - how they find out about products and services; how they engage with brands; how they review and buy; and how they recommend.”

The Fundamentals of Programmatic

Programmatic advertising enables brands and agencies to bid automatically on advertising spaces across a broad range of platforms and publications. This involves a complex ecosystem of algorithms that can place ads on hundreds of websites within milliseconds, based on data collected from online users to ensure that the ads meet their needs.

Benefits of Programmatic Advertising 

One of the biggest benefits is that programmatic advertising helps the advertiser make data-driven decisions, increasing ad revenue. It’s also budget-friendly, allows you to take a close look at KPIs, and helps you target highly specific audiences. 

Budget-friendly: Though it sounds expensive, programmatic advertising is budget-friendly. Because you can see results in real-time, you will only spend money on what you know will be effective. 

Key Performance Indicators (KPIs): Because you can measure the success of campaigns in real-time, your campaign management is consolidated and streamlined. Success is in one place, no going back and forth. 

Audience Targeting: Your audience will be found for you, so you’ll hit your target every time. You can also choose the best devices to advertise on. For example, a desktop ad might not have the same effect if the ad is optimized best for mobile, and programmatic platforms will make that decision for you.

Types of Programmatic Ads

When getting started with programmatic advertising, you have options available to make sure the ad is optimised for your campaign. Depending on your KPIs determine what channels are best to invest in. 

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Let’s go over the different types that are available for you.

Display ads 

The most common form of programmatic advertising, these are visual ads placed in the header, footer, or sidebar of websites or apps. Display ads can be dynamically optimised, updated, and personalised based on user data.

Video ads

There are three main types of video ads available to advertisers.

In-stream video ads are shown within the video player. This is by far the most common type of video advertising, and advertisers can choose from options including:

  1. Pre-roll: ad shows before video plays
  2. Mid-roll: ad runs in the middle of video content
  3. Post-roll: ad runs after the video ends
  4. YouTube bumper: brief but non-skippable ads shown before video

Out-stream video ads appear within articles natively or as pop-ups.

In-display video ads show up in the search results or as a sponsored video recommendation.

Social ads

Whether it’s Facebook, Instagram, Snapchat, Pinterest, TikTok, or Twitter, advertising on social media can be bought through APIs (application programming interfaces, which enable computer programs to talk to each other) or through a demand-side platform (DSP) integrated with them 

Native ads

Native ads are baked into the website or app they’re being served on, for seamless viewing. Instead of a loud banner pop-up video ad blaring in your face, native ads blend naturally into the content, providing a better user experience. Native ads can be programmatically placed in the header, footer, sidebar, or within the content itself.

The most common native ad formats are:

  1. In-feed units: ads appear within feeds, like paid placements in editorial homepages that look like an article.
  2. In-article ads: appear within paragraphs of an editorial piece.
  3. Paid search units: ads appear at the top of the search results, looking similar to organic search results.
  4. Recommendation widgets: a recommendation of a similar piece of content that the user may like.

Audio ads

Podcast placements and  Spotify ads are a few ways advertisers can buy ads programmatically. While most podcasts and audio shows rely on manual, private ad deals for their primary placements, programmatic ads can be bought at scale for freemium platform users.

Digital out-of-home (DOOH)

Out-of-home advertising (OOH) used to involve visual, static signage like a mall poster on a highway billboard. However, as digital signage has become more affordable to mass produce, OOH now provides advanced targeting and measurement tools that weren’t ever possible before.

In-app programmatic advertising

Given that the average consumer spends four to five hours per day engaging with mobile apps, it’s worth taking a closer look at how programmatic advertising in mobile apps actually works.

Web-based ads work within search, banners, videos, and classifieds, but in app ads have different display formats, size requirements, and display durations.

The most common formats are bottom-locked banners, which offer greater reach, and interstitials, which pop up between user actions, such as in between levels of a game.

Rewarded ads are a way of integrating into a gaming context where viewers can advance after viewing an ad. Also, while ad-blockers are now built into certain browsers, in-app ads are not (yet) vulnerable to ad-blocking software.

Social, news, and gaming apps have some of the highest mobile user penetration, and offer strong potential for return on investment (ROI) from in-app programmatic advertising.

How does programmatic benefit advertisers?

In addition to streamlining the advertising process, programmatic advertising offers a host of other benefits. It provides a wider range of inventory, targeting, and strategic options to enable advertisers to reach their ideal audiences more accurately, quickly, and affordably.

Efficiency and lower CPMs

Programmatic advertising has streamlined the way advertisers can reach multiple audiences with unique messaging and creatives simultaneously. This has led to cutting out expensive middlemen and costly buying and selling practices, effectively lowering CPMs across the board.

Cast a wide net in-home and out-of-home

Programmatic advertising has come a long way in terms of its capabilities and adoption. With 72% of all digital ad displays now being powered programmatically, advertisers can reach a massive audience accurately and quickly.

Faster, transparent insights

What’s better than more reach? More…. timely reach. The time from bid to delivery is crucial when you want to show up at the right places at just the right point in the buyer’s journey. In addition to showing up faster, programmatic lets advertisers see immediate, measurable results, enabling nimble campaign fine-tuning, and continuous optimisation. And with the help of AI, audience targeting is only getting smarter.


Let’s finish with a round-up the key points:

  • Programmatic advertising is an automated media-buying process that uses AI and machine learning to segment audience data, identify efficient placements, run auctions, and sell digital ad impressions in real time.
  • Programmatic advertising has become ubiquitous for its scale and efficiency, reaching about $99.43 billion in ad spend in 2022 and forecast to keep on growing. It’s used across multiple channels, both in and out of home.
  • To be successful with programmatic, invest in creatives, experiment with different combinations of targeting options, research your audience, and minimize ad fraud

If you are interested in know more get in contact hello@fuel.agency