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What is Programmatic Marketing And Why Do Certain Ads Keep Chasing Me

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Something that’s become extremely interesting and effective for businesses in the last couple years is Real Time Bidding. We’re going to explore what it is below but I highly recommend you check out the webinar which OMG did for the this topic. If you want all the details, you can check it out here.

Real-time Bidding, or RTB for short, is a form of programmatic marketing. Basically, this means that instead of a person placing online Ads, an algorithm does it on your behalf and for your benefit. In the traditional model of display marketing, you’d pay to put a banner ad on a single website, usually because it’s local, it meshes well with what you’re selling, and/or you’re hoping your target demographic visits it.

In that model, the website would give you a cost-per-thousand (CPM) rate. This is the price you’d pay for every thousand impressions on their site and their site alone. The flaw in this system is that it doesn’t care who’s loading the page. Let’s say you’re a car dealership advertising on a video game site. Under the traditional display marketing model, everyone who visits that page sees your ad. But what if a fair chunk of the people loading that page are under the age of 16? Those would be wasted impressions because they aren’t going to be buying a car from you.

With programmatic marketing (sometimes known as programmatic replacing), an algorithm will “read” the people visiting the site and bid on advertising space (this is where that real-time bidding comes in) based on who’s loading the page. This algorithm is actually in an online auction against other programs to win these ad spaces and it all happens in a fraction of a second.

How Does Real-time Bidding Work?

95% of all websites that offer advertising on their website have hooked themselves up to what’s basically a stock exchange for ads cleverly called an ad exchange. There are two platforms in this exchange: the demand platform and the supply platform. On the demand side are providers (like OMG) who help advertisers get their banner ads in front of targeted consumers. On the supply platform side, we have all the online publishers who have ad space to sell on their websites. Essentially what the ad exchange does is work behind the scenes connecting these two platforms to deliver the ads to your targeted audience.

How Do You Target People?

When you get OMG to do your online marketing, one of the first things we do is find out who you want your ad to appeal to. Your ideal customer, if you will. Once we have that info, we set up your ad so it only appears to specific people. This is done by entering certain parameters into our program including:

  • Region/Location
  • Age Range
  • Gender
  • Household Income
  • Contextual Searches (e.g. only on mobile platforms)

Since there’s no such thing as privacy on the internet, anything you’ve entered information to or created a profile for (Facebook, Google, etc.) gets shared online. Even hopping from website to website builds an online profile that sites can use to target specific ads to you.

These search parameters can be extremely specific and used to your benefit. Let’s take our earlier example of the car ads. By using programming marketing, we can set that ad to ignore anyone outside of the age group that wouldn’t be buying cars. Another example would be for a pub or restaurant that had a happy hour and only wanted to advertise it the day of the event. We can also set the algorithm to change the ad-based on the weather (they’re linked up to The Weather Network) e.g. if it was snowing, a tire dealer could instantaneously have ads featuring winter tires on sites.

One other option is to have the ads appear based on what the client has been searching before landing on your website. Every time someone visits a page, the site places a tracking pixel on them. If they leave without a conversion (i.e. buying something, signing up for email, etc.), the ad “follows them” for a set amount of time that we determine. If you’ve ever looked at anything online and then noticed it constantly popping up afterwards on your Facebook, on the side of your Google searches, or on any other sites, that’s why.

Should I Be Using Programmatic Marketing?

You should. You really should. Most large companies are already shifting most of their display budgets on programmatic marketing because of its effectiveness. Think about it. Being able to filter through a large audience and talk specifically to people who are more likely to buy/use your products and services is a huge advantage. It’s a great way to cut through those who are interested and get straight to your key demographic.

Another advantage is that the algorithm learns the longer it runs. For instance, if it sees there’s a certain neighbourhood that’s getting you a lot of conversions, it’ll target that one specifically and reduce ads in another region that’s not paying off for you. The means your marketing money is being spent more effectively. Programmatic marketing reduces wasted ads and wasted conversions. Plus the increased targeting capabilities increases your overall click-through rate and total conversions. Summed up, programmatic marketing can really help your business. No wonder it’s going mainstream quickly.

Is My Ad Appearing on Bad Sites?

A common concern with real-time bidding is if the ad can go on any website, how can you be sure it’s not showing up on anything offensive or pornographic? Simple: topic detection systems. The algorithm will read each site before it bids to see what they’re about. If the site doesn’t match the parameters we’ve set, there’s no bid. This keeps you away from any negative association with any unsavoury sites.

There’s another way this can work to your advantage. If the algorithm determines there’s a site that’s more likely to get you conversions, it’ll bid more to get Ads on there. To continue with the example of the car dealer, the program will bid higher on ad space on the Autotrader website versus HGTV because it knows it’ll probably lead to more conversion for you.

This is just the tip of the iceberg. If you’d like to learn more about programmatic marketing, you should watch our webinar. Or, go straight to the source and get in touch with us! We promise we make your marketing strategy more efficient, get you more conversions, and help you save money. All you need to do is contact OMG today!