Which programmatic advertising model is right for your client?

Roughly a 7 minute read by Adriana

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Programmatic advertising has been one of the most popular ways to generate and build brand awareness since 1996. DoubleClick was the first ad server, which was later bought by Google in 2007. Despite starting with only 350 advertisers, AdWords managed to disrupt the programmatic processes and environment.

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What exactly is programmatic and why is it such a crucial tool for generating brand awareness?

In short, programmatic is the algorithmic purchase and sale of ad space in real time, through software used to automate the media buying and optimisation of inventory.

Different ad platforms have different tools for creating and running programmatic campaigns. As expected, Google Ads offers the biggest suite of tools.With a network that grows every minute, it offers infinite possibilities for a brand to spread their message.

In 2019, programmatic saw a 20% growth year on year and it’s predicted that 52% of all ad spend will be used towards programmatic this year. This shows that it is definitely an essential part of the buying mix for most advertisers.

In a world of ad fraud and brand reputation risks, what exactly is the right way to buy programmatic for your brand?

There are two main options advertisers can use which are available to everyone, and the pros and cons of each one of them can determine which one’s a match for your brand.

  1. Open auction
  2. Programmatic direct

Open auction

Also known as RTB (Real-time-buying), this method allows advertisers to enter an auction where inventory prices are established in real-time and where any publishers or advertisers can take part.

As with a traditional auction, the highest bidder wins the advertising place and the impressions that come with it. This is also the more cost-effective way between the two.

What are the advantages of using RTB?

Advertisers tend to prefer RTB for a number of reasons besides the lower cost. This algorithm is also audience driven, which allows for a very specific targeting and optimisation of the campaign.

It also minimises the human interaction aspect of buying media space, which in return reduces the time it takes to set up and launch a campaign.

RTB can also implement proprietary algorithms which allow for custom bidding and targeting using AI and machine learning.

Another feature that makes this method attractive is the simplicity of it. Advertisers control all the ads and placements from a single platform, which greatly reduces the optimisations effort and makes reporting much easier.

For example, Homebase wanting to promote a sale on lawn mowers during a hot week in the summer could use open auction to launch national campaigns quickly, cost-efficiently with wide reach targeted at specific audiences such as homeowners with gardens.

What are the disadvantages of using RTB?

There are a few significant cons you need to consider, depending on the brand you want to promote.

The most important is probably the lower quality of the placements and publishers. As the RTB network encompasses thousands of publishers, it can be hard to monitor, control and refine where our ads show and where they shouldn’t, and, as we already know, the internet doesn’t only consist of websites, apps or platforms all brands want to be associated with. This can pose a higher risk of damaging a brand’s reputation when one of their ads appears on a fake news website for instance.

Currently, a staggering 65% of Britain’s biggest advertisers are present in non-brand safe environments, mostly as a result of open auctions.

One final significant disadvantage to take into consideration is the flawed nature of the placement verification tools used by open auction platforms.

For instance, relevant publishers can easily become inaccessible to advertisers due having words such as “Sussex” within the page text, which certain tools flag as being inappropriate because it contains the word “sex”. Another example would be a URL being blocked by default because it contains the character combination “ak47”.

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Programmatic direct

Moving on to the second option, there are a few notable advantages programmatic direct offers.

But first of all, what does it mean and how does it work?

Programmatic direct is a one-to-one media buying process, very similar to the private marketplace model, within which an ad transaction or agreement takes place directly between the publisher and the advertiser, with little to no automation involved. Most premium publishers reserve a percentage of their ad space for programmatic direct.

What are the advantages of using programmatic direct?

The first main advantage is that, unlike open auctions, programmatic direct has a smaller selection of advertisers competing for the same space, which increases your chances of obtaining the space you need or desire.

The quality of the publishers is closely tied to this, and, most of the time, a manual selection of the ad space guarantees better placements for your brand.

A direct consequence of showing on a high quality placement is more transparency and a decrease in bot traffic.

In the UK, 15% of programmatic impressions were fraudulent in 2017. Within this context, more control over placements can refine the traffic significantly and avoid fraudulent traffic.

Additionally, advertisers can use publisher data to refine their audiences and enhance their own data while running programmatic direct campaigns. This kind of data is not always available within open auction platforms and can be crucial depending on the target audience and brand.

One final significant advantage is the directness of the process. Rather than using a 3rd party platform, the advertiser can communicate directly with the publisher, which makes human contact and negotiation viable options.

What are the disadvantages of using programmatic direct?

There are a few cons to review before opting for the direct purchase model.

The most important difference compared to open auction is the price point. Programmatic direct can be significantly more expensive, which can make it a hard sell for the client. This, however, guarantees brand safety, which can be paramount for certain clients.

The model is also less flexible, not allowing for as many tests, changes and optimisations as RTB. In this case, you will need to consider the time and resources needed to implement the campaigns vs the expected returns, and if this method will provide a better ROI than open auction.

Performance is also more difficult to quantify when buying the media space directly from the publisher, depending on the type of ad space and the insights publishers can offer. This ties in with the lack of flexibility, as even with plenty of insights, it will still be trickier to optimise the ads.

For example, A large alcohol brand, such as Jack Daniels may want to be more specific with their ad placements, ensuring that they don’t appear on sensitive websites such as alcohol recovery forums, or websites aimed at children or certain religious groups.

So, what’s the TLDR?

There is no perfect programmatic advertising buying model. It all depends on the brand you’re wanting to promote and on the audience targeting that goes with it.

As there is no one-size-fits-all approach, the best strategy is to conduct a brand analysis and to ensure the programmatic model you’ve chosen respects your brand’s boundaries, while also having the potential to reach your target audience.

Adriana works on multiple PPC and Social Media platforms. From campaign creation to daily optimisations, she makes sure the activity runs smoothly and the targets are being met. Data analysis takes up most of her day, as it is an essential tool for making informed digital advertising decisions.