By Brett Konen on May 6th, 2020
What’s a Programmatic Ad Agency, & Why Do I Need One?
Programmatic advertising is one of the most efficient, cost-effective, customizable, and data-driven methods of buying paid media. It has become the new norm in digital advertising in a few short years—so quickly, in fact, that many people still don’t understand exactly what programmatic means.
We’re here to clear that up. Below, we explain what programmatic ads are, what programmatic ad agencies do, what sorts of ads can be managed programmatically, and why you should consider hiring a programmatic agency to manage your digital ad campaigns.
What Is Programmatic Advertising?
Despite the fact that 70% of digital ads are currently bought and sold using programmatic technology, even pro marketers are sometimes confused by the definition of programmatic advertising. Outbrain provides a great overview:
“Programmatic advertising is defined as the automated buying and selling of online advertising space. But actually, it’s much more than that.
The market for digital advertising space is run by ad exchanges, who operate computerized auctions that bring together both parties of the transaction:
- Advertisers, who want to buy ad space on the internet.
- Publishers, the website owners with digital space to sell.
Programmatic advertising … uses algorithmic software that handles the sale and placement of digital ad impressions [in the time it takes a webpage to load].
Programmatic also incorporates traffic data and online targeting methods to serve impressions more accurately, efficiently and at scale, which means better ROI for advertisers and publishers alike.”
In short, programmatic advertising uses algorithms and data sets to target the right audience at the best price, which makes this method of digital ad buying the best way to maximize your ROAS. Yes, the process is a little complex, but that’s why programmatic agencies exist.
What Does a Programmatic Ad Agency Do?
If programmatic ad tech uses algorithms to help get ads in front of the right people at the right times, what’s the point of a programmatic agency?
Good question. Think of those ad buying platforms (also known as demand-side platforms, or DSPs) as race cars, and programmatic agencies as professional drivers on a closed course. DSPs are complex pieces of technology, and they interact with data management platforms (DMPs) to help you find and reach your most likely potential buyers online.
Together, these technologies can serve ads to an endless array of specific and highly granular audiences based on each viewer’s demographic, location, interests, behaviors, time of day, stage of the purchasing funnel—even the weather in their city at that exact moment. There are millions of data sets available, data grains to optimize for, and targeting strategies to test and learn from. A few things programmatic is really good at:
- Expanding the reach of your ad campaign with third-party data sets
- Using your existing first-party data to build lookalike audiences of potential customers
- Transparency (i.e., telling you exactly who is seeing your ads and why—something traditional ad formats like print and radio struggle with)
- Real-time reporting on campaign performance across a variety of metrics
- Improving campaign performance over time
Here’s another way of thinking about programmatic: In theory, there’s such a thing as a perfect ad campaign. It would show your ads exclusively to buyers with the highest statistical chance of conversion no matter where they were in the world, targeting each of them at the precise moment they’re likeliest to buy with the ad creative most likely to resonate. In practice, perfection is impossible, but programmatic advertising is designed to get your campaign as close to perfection as the current state of technology and ad buying best practices will allow.
To return to our race car analogy, no matter how good the car, it will always go faster with an experienced driver. Most brands simply don’t have the in-house expertise or time to tackle countless data dives and day-to-day campaign optimizations—and they don’t need to. It’s more cost-efficient to outsource this capability by hiring a programmatic ad agency, which is why teams like PrograMetrix exist.
What Sorts of Ads Can Be Managed Programmatically?
Almost any digital ad format can—and for cost-efficiency’s sake, generally should—be bought and sold programmatically. The following are all ad formats a programmatic agency can handle:
- Display ad campaigns (e.g. banner ads of all sizes, placed across thousands of websites)
- Mobile ad campaigns (e.g. mobile display and in-app ads)
- Video ad campaigns (e.g. pre-roll ads on YouTube and other video platforms)
- Connected TV/ OTT ad campaigns (e.g. through streaming TV services like Roku and Hulu)
- Native ad campaigns (ad content that blends into surrounding editorial content, available across thousands of blogs and websites)
- Digital audio ad campaigns (e.g. through podcasts or streaming radio services like Spotify, Pandora, or iHeartRadio)
- Paid social ad campaigns (e.g. Facebook, Instagram, Twitter, and LinkedIn ads)
- Paid search ad campaigns (e.g. Google Ads)
- Geofenced and geotargeted ad campaigns
- Digital out-of-home (DOOH) ads, voice ads, wearable ads, and other emerging ad channels
- Ad buying through private marketplaces (PMPs) or programmatic direct
- Ad retargeting and dynamic creative
Why Should I Work With a Programmatic Agency?
A programmatic ad agency is a smart choice for most brands running digital ads because:
- Algorithms alone won’t get the best results—a combination of algorithmic and human expertise will outperform a programmatic platform’s auto-optimization (auto-opt) feature.
- Programmatic DSPs (particularly industry-leading options like The Trade Desk) are expensive to pay for and difficult to learn.
- Programmatic expertise is more cost-effective to outsource to an agency than to hire for.
- Most “full-service” agencies claiming to handle programmatic campaigns are outsourcing to programmatic specialists like PrograMetrix; working directly with a programmatic agency cuts out the middle man, saving money for your campaigns themselves.
- A programmatic agency will help you identify more key takeaways from your campaign data, which will help you run more effective ad campaigns across all formats in the future.
In the next installment of this series on programmatic ad agencies, we’ll discuss how to choose the right programmatic ad agency. Check back next week to learn more, or click here to schedule a free consultation.