Programmatic Advertising: The Future of B2B Marketing

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Remember the iconic scene from the 2002 sci-fi movie “Minority Report,” when a camera takes a retina scan of Tom Cruise’s eye and a billboard calls out to him, “John Anderton! You could use a Guinness right about now!”?

Programmatic advertising is the precursor to this type of real-time, immersive, direct targeting that will eventually happen outside of the web browser. Data is compiled in fractions of seconds and an ad is generated to the precise target, at the exact time of need, while efficiently utilizing ad dollars.

What Is Programmatic Advertising?

Programmatic advertising is an algorithmic process of buying and selling ad space in real-time. For example, the social media platforms many marketers use every day, like Google Ads and Facebook Ads, are programmatic. These platforms use complex mathematical formulas that evaluate a seller’s goals, inventory data, third-party consumer data, ideal ad formats, bidding preferences, and consumers’ online behavior patterns to create an efficient, cost-effective buying strategy.

When a streamlined, cohesive approach is needed to maximize the efficiency of campaigns across all points of the funnel, “ad stacks” provide end-to-end solutions for enterprises that need comprehensive tools in a concise platform. Examples of “ad stacks” that deliver programmatic ads include AdRoll, Quantcast and Sizmek.

Although agencies have a wide range of technology tools at their disposal, it’s the high-level tools that truly define the vast capabilities of the most effective ad stacks. The magical combination is composed of a sophisticated ad tech stack, message-matching landing page, and voilà, a powerful path to conversation. 

Real-Time Bidding vs. Programmatic Direct: What's the Difference?

There are two main types of programmatic advertising: real-time bidding (RTB) and programmatic direct.

Real-Time Bidding

Just like it sounds, real-time bidding automates the buying of ad space in real-time based on information gathered about the page and the user. This information is passed to an ad exchange, where ad inventory is sold to advertisers via auction.

This occurs within one of two platforms used to access the ad exchange:

  • SSPs (supply-side platforms): These platforms allow publishers to access the ad exchange and list their ad inventory for auction.
  • DSPs (demand-side platforms): These platforms allow advertisers and agencies to access the ad exchange auction and bid for ad space.

How Real-Time Bidding Works

When it comes to real-time bidding, there are six basic steps that occur:

  1. Publishers make their ad space available via the SSP.
  2. Advertisers decide which audiences they want to target with their ads based on audience data, existing customers, or new prospecting audiences.
  3. When a website user visits a web page, information gathered via cookies is reported back to the ad exchange.
  4. If the website user matches the target audience defined by the advertiser, the advertiser will then enter an auction, competing against other ads for the same audience.
  5. The ad with the highest bid is then shown to that website user on the site during that visit.
  6. Publishers get paid for the ads they show on their sites.

Steps 3-5 are carried out in less than a second as the web page loads, allowing for a seamless customer experience.

Programmatic Direct

Programmatic direct is a simpler way for advertisers to buy preferred ad inventory. It is sold directly by the publisher, allowing more control than real-time buying channels. Programmatic direct advertising does not go through a bidding process.

There are typically two types of programmatic direct advertising:

  • Programmatic Guaranteed Deals: Made for reserved inventory at a set price.
  • Unreserved Fixed-Rate Deals: Gives direct buyers first access to blocks of inventory at a set price.

In both cases, the ads are managed programmatically and come with all the benefits of programmatic targeting. In some cases, the negotiations themselves are automated between the buyers and sellers.

Super-Precise Targeting Powered by Data

Programmatic advertising allows advertisers to reach a relevant audience with greater precision due to automated bidding based on real-time data. This kind of data-driven targeting is not possible with traditional display advertising that’s bought upfront.

Key Benefits of Programmatic:

  • Reduces human error in the process of media buying, since automation targets the exact audience, at the right time.
  • Allows you to focus on strategy instead of creating insertion orders.
  • Generates brand awareness and engagement through efficient CPMs that are highly targeted to your ideal accounts and key personas.
  • Detects ad fraud using machine learning techniques that help identify fraudulent click behaviors.

What Are the Different Formats of Programmatic Advertising?

Programmatic advertising covers a range of advertising formats. Compared to a decade ago, there is a range of different and growing options. Let’s dive in.

Display

Display ads have been around for quite some time. However, rather than staying static, ads have become more personalized. Over the years, there has been constant technological development, mobile optimization, and in general, better use of data. With the rise of new technology, many B2B marketers have embraced programmatic creative strategies that target viewers, with the right offer, at the right time.

Native

These are programmatic ads that blend into the content either on a website, social network, or other application. For example, it could be for sponsored content, so setting up contextual targeting as well as tailoring your ads is very important.

Video

Buying and serving digital video programmatically across channels is now a key strategy for marketers. In 2018, spending on programmatic video advertising in the US amounted to $23.8 billion dollars. By the end of 2021, video ads are expected to almost double, reaching just over $40 billion dollars.

There are three main types of video ads:

1. In-stream ads: These ads appear in the video player itself — think the advertisements that run before a YouTube video.

2. Out-stream ads: Out-stream ads appear between online articles. These are placed either within the content or show up as pop-up windows. Here is an example of an out-stream video ad on Forbes:

 

3. Display ads: These ads are displayed in search results or video recommendations.

 

Audio/ Voice

While popular podcasts still follow the traditional model of ad placement, programmatic audio can amplify revenue efforts. Programmatic audio platforms rely on real-time audience data to place ads and utilize engaging ads to optimize the user experience. 

Does Programmatic Only Make Sense for B2C Brands? 

The short answer is no. In fact, with B2B companies spending less on digital advertising than most e-commerce companies, it can be even more important to focus ad dollars where they are most impactful. This is precisely what programmatic buying does best. Naturally, there are plenty of benefits to programmatic advertising; both in the business-to-consumer (B2C) market and in the business-to-business (B2B) market.

Manage Advertisements on One Platform

Advertisers can manage all of their digital advertisements through one platform. In 2021, you no longer need to go to various platforms such as Google, LinkedIn, and Facebook to manage your ads. This is a huge resource saver for businesses!

Cost and Time Savings

Through programmatic targeting, advertisers now have the ability to place highly relevant advertisements in front of website visitors. Since the ads are relevant to the person viewing them, the cost of acquisition will be reduced. Highly targeted advertisements are often more expensive, so it’s likely that your cost-of-lead will increase. 

However, since your sales team is following up on more qualified leads, the cost-of-acquisition will be reduced. Real-time bidding technology adjusts bids based on supply and demand.

Real-Time Optimization

With programmatic advertising, your efforts benefit from real-time data. Conversion rates are checked and optimizations are put into place immediately. Variations of your ads can be served and text can be adjusted dynamically so you don’t serve ads for an extended time that are not performing well.

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The most significant reason why programmatic advertising works in B2B marketing is because of its targeting abilities; There are several DSPs (demand-side platforms) your business can choose from to run programmatic ads.

Examples include: 

Each programmatic DSP has a network of ad exchanges. These ad exchanges communicate with certain programmatic SSPs and therefore “publishers.”

Let’s say you work for a technology company that sells software and your target audience is CIOs. Your ideal target audience for this niche is not likely to visit certain publishers; such as publishers that write content about animals or fashion.

In order to specifically target your audience, you need to identify which DSP has access to a network of publishers that CIOs are likely to visit.

Integrations with Marketing Systems and CRMs

There are tools available on the market that let you integrate your marketing systems such as Hubspot and Salesforce with your DSP of choice. This integration allows you to automatically show ads to people based on their behavior in your marketing system.

Let’s say you have a lead that shows no engagement; your programmatic ad tools could serve them content that converts the lead into an MQL. This means this lead is now further down in your marketing funnel and now you can automatically show a different set of advertisements to this person.

As you can imagine, programmatic advertising strategies can lead you and your team to success, while saving a lot of internal resources through automation. Now that we know B2B companies can successfully use this type of advertising, let’s dive into some of the challenges.

The Challenges of Programmatic Advertising

Though programmatic advertising provides a great deal of value to both B2B and B2C advertisers, it can pose a challenge for brand management, because buying is based on the user rather than the content of the website where the ad is served. To help solve this issue, you can use a site blacklist to specify sites you do not want your ads to appear on. These types of lists are managed through the demand-side platform.

Be aware that websites often change domains, so it is best to constantly update your blacklist. On some platforms, you can exclude entire categories of content, in addition to specific sites. Or you can take the opposite approach and create a whitelist of acceptable sites where your ads can be shown. Keep in mind that this will limit your reach and will likely make your buy more expensive.

Also note that low-quality sites provide cheaper traffic, and often agencies will not use a blacklist or keep it updated because it can drive up the cost of buying, therefore making it hard to reach your delivery KPIs. (It's something you should ask your agency to do!)

View-through conversions are a contentious issue among marketers. If you are unable to report against these, you will struggle to show direct benefits. Programmatic provides advertisers with access to targeted data sets in order to hone in on desired customers in less time. By doing so, this allows advertisers to create a full-funnel strategy and provides 1 on 1 messaging to users at the right time in their buying cycle. You’ll get higher quality visitors that should convert at a higher rate at the bottom of the funnel. 

Other issues with programmatic advertising to consider:

  • Programmatic relies on cookies to track users across devices, which can be challenging. Facebook requires user logins, not relying on cookies, therefore fewer challenges across devices.
  • Publishers can mask their URL, which allows them to list their website as a more reputable website, instead of their own. This can mean that the buyer has no idea where the ads are actually running.

The Future of Programmatic Advertising

Programmatic advertising continues to grow and is projected to account for 86.5% of all digital ad spend in the US in 2021. We will likely see it take over TV and radio. It’s time for audio services to start innovating in a similar way, and early indications point to the fact that we’re finally on the cusp. The real futuristic impact of programmatic advertising lies in the AR and VR spaces where it will allow limitless opportunities to sync brands directly into a unique virtual environment.

Imagine putting on your VR headset, immersed in a new car racing game. As you select your car, you scan the cockpit, reviewing the realistic instruments and gauges. Imagine looking down at your watch and seeing a watch on your wrist that is targeted to you by your income bracket. As technology progresses, brand integration will be seamless and highly targeted. Currently, only a few options for VR ad placements exist. This will change as the medium develops its ad-technology infrastructure.

It seems that it’s really only a matter of time before the possibility of “Minority Report” advertising becomes a reality. And, no doubt after digesting all of this information and the implications of programmatic advertising, “{First Name}, you could use a Guinness right about now!”

We’re always here to help you launch and optimize your paid social campaigns. Contact us today!

Posted In: B2B, Programmatic
William Crane

William Crane

William oversees all of Beacon Digital's marketing automation work, as well as all paid media (social and search). He is an experienced digital marketing director with over 9 years of experience leading, developing, and implementing digital marketing solutions for B2B clients. He has worked with a variety of clients from large multinational corporations with multiple business units to local, small businesses. He works hard to ensure that all digital marketing strategies are tailored to the client’s goals, needs, and, ultimately, deliver the results they are hoping for. He is passionate about developing successful marketing automation strategies as well as utilizing data to not only demonstrate not just what happened, but to gain vital insight into how to improve performance.