The future is artificial intelligence (AI). We’re not talking about Terminator robots running around (although, who can say?), but instead the technology that gives us the tools to make a lot of decisions very quickly. In marketing, this can come in the form of programmatic advertising, and it can be especially beneficial in your advertisement campaign.
Programmatic advertising is the use of AI to automate the buying, targeting, and placement of advertisements on digital platforms. In a marketplace of millions of ads updated and pulled up in real-time as consumers navigate the web, these tools are invaluable for generating interest in your target audience while cutting down on excessive marketing management.
The benefits of programmatic advertising are many. With the ability of AI to analyze and apply data in targeted ads to a broad audience, programmatic advertising can maximize the effectiveness of most marketing campaigns. However, there are a few drawbacks to keep in mind as well.
Here’s what you should know about programmatic advertising and how it can benefit your ad campaign.
The Benefits of Programmatic Advertising
With the staggering complexity of ad exchange bidding in a marketplace with a quadrillion possibilities, you need a tool to assist in the buying, targeting, and publication of your ads.
Programmatic advertising is here to help you with the following:
Data Analysis and Application
Everything starts with data. Knowing and understanding your target audience is an essential part of any campaign, and AI programmatic ad tools can help you gather this data and put it into practice.
Machine learning, or the ability of AI to make decisions based on data analysis without being specifically programmed to do so, allows for better study and instant analysis of a target audience and their many behaviors. This data can contextualize user behavior to truly craft a personalized experience that drives customer interaction. In conjunction with social media insights, analytics gathered by AI tools can then be applied to programmatic advertising for ideal targeting.
Modern advertising is all about a personalized approach. In fact, shoppers that clicked on personalized recommendations were found to be 4.5 times more likely to complete their purchase. To achieve higher rates of conversion like this, you need a targeted ad approach that makes millions of instantaneous decisions based on customer demographics.
Programmatic advertising allows you to target your audience by setting parameters for sites and intended demographics. Automated buying can ensure your ads find the right sites with the right users. You’ll be able to achieve the desired results of your data analysis in a fraction of the time you would spend attempting to target ads manually.
With effective data tools, you can implement an effective targeted marketing strategy. But you will also have the feedback necessary to continue improving on those tools. Programmatic advertising allows data to be tracked and harnessed in ways that would be much more difficult to achieve manually. Follow an ad and its effectiveness in converting buyers and you will continuously draw more and more data that improves your ad campaign.
In this manner, you can continuously test ad strategies alongside the usual A/B tests. The level of transparency programmatic data offers is the gift that keeps on giving. Marketers obtain more data, which improves ads, which increases conversion rates, which increases ad buying power. You can grow a programmatic ad strategy that helps your business grow exponentially.
The potential of programmatic advertising is about as limited as your marketing budget. Programmatic advertising can reach a massive audience and make many decisions instantaneously.
No one has the time or capability to engage in real-time ad buying auctions across millions of platforms with millions of possibilities, but with a programmatic ad campaign, you can select a market and target your ads for less work and greater effect. With the kind of data and ability to craft content around certain demographics, you can better advertise on social media and across the web. Your audience will grow with your business.
What are The Drawbacks of Programmatic Advertising?
While the benefits of programmatic advertising likely outweigh the disadvantages, it is important to consider every factor when determining the right ad campaign strategy for your business or product. Programmatic advertising isn’t right for every business.
Here’s what to keep in mind.
Programmatic advertising isn’t cheap. For small businesses with limited ad budgets, you may want to look in different directions. Your ideal daily budget for an automatic bidding strategy should be two to four times your Cost Per Acquisition (CPA). That means if you have a CPA of $200, you’ll need $400-$800 per day to spend on bidding for ad space.
With any digital platform, you are open to fraudulent activity. Programmatic advertising can potentially lose some money if the system is not smart enough to recognize a fraudulent situation. Many AI tools have this fraud protection builtin, but it is important to recognize the risk.
Additionally, programmatic advertising gives the marketer less control than a fully manual campaign. This could be a great thing as it saves a lot of time. However, if you want to be certain where all your ads are appearing and be able to craft them to your own specifications rather than trust it to an AI — or if you have ethical concerns about using AI with customer data at stake — you may not want to go the programmatic route.
Moving Forward With Programmatic Advertising
AI tools are emerging to help us out in nearly every sector of the economy. Programmatic advertising is built on machine learning and automating a system of rapid ad buying and targeting to make sure your ads are seen by the right people. In short, programmatic advertising can benefit your campaign by helping you:
- Generate usable customer data
- Target ads to specific audiences
- Test ads and create a better, personalized customer experience
- Reach a broader audience
These benefits are valuable — if you can afford them. Costs and risk will be the main factors to consider when planning an ad strategy around programmatic advertising, but with the right application, this method can be highly successful for any campaign.