The arrival of display ads and then programmatic advertising were major disruptors in the world of marketing. It has never been easier for publishers to sell ad inventory or for advertisers to find and reach their target audiences.
You can now promote your products and services to potential customers via digital ad space at a fraction of the cost of traditional methods. The emergence of new and more effective marketing strategies makes staying up to date on new terminologies crucial for perfect ad placements.
You’ve no doubt heard of programmatic ads and display ads, with the two terms often being used interchangeably. However, we’re here to clearly define each of these terminologies and discuss how to use either or both together to get the most out of your ad campaign.
Table of content:
What are programmatic ads?
So, what is programmatic advertising? Simply put, any online advertising that uses an automated process rather than manual techniques is considered to be programmatic advertising. Advertisers use artificial intelligence to buy ad space in real-time instead of going through human negotiations and pre-set pricing. It replaces human negotiations with automation for improved efficiency. There are many programmatic ad buying software options on the market.
How does programmatic advertising work?
Programmatic advertising uses software to manage the sale and placement of digital ads across ad exchanges and ad networks. Automation allows advertisers to purchase ad impressions more accurately and quickly.
Programmatic advertising works when a user visits a website. At this point, the publisher auctions off the ad impression, and advertisers place their bids. The highest bidder wins the auction, displaying their ad on the website.
The publishers use supply-side platforms (SSP), and the advertisers use demand-side platforms (DSP) during the process. Both SSP and DSP are computerized platforms that process everything instantly, even though there are many steps involved.
What are display ads?
Display ads are one of the oldest visual-based digital ads typically found on websites. Most display advertising links to a website where a customer can learn more about—or purchase—a product or service.
Unlike content-based advertising, display ads do not appear on a search engine results page (SERP). They may contain images, graphics, and videos in different forms, such as banner ads, leaderboard ads, and video adverts.
Advertisers place display ads into websites' ad space through a display network. As a publisher, you can choose the best ad network suitable for your advertising strategy and begin placing your ads.
How does display advertising work?
To place a display ad, ad publishers can either contact site owners directly, join an ad network, or programmatically acquire ad inventory of a suitable format. To ensure they deliver the ad to the right audience, the advertisers select targeting choices and filter prospective site visitors by demographic, behavioral, geographical, and other characteristics.
Results from page views, click-through rate CTR), and cost per mille (CPM) allow the advertisers to determine whether their display advertising campaign is performing well. This way, they can make changes to their online campaign if required.
What’s the difference between programmatic and display ads?
Programmatic and display ads are two different facets of digital marketing. Programmatic advertising refers to a specific strategy of publishing ads, while display ads are all about particular ad formats.
Some programmatic advertising can involve display ads, while some display ads can be programmatic. That’s why these two terms can overlap.
Treating programmatic and display ads as two components of an overall marketing strategy can help you to improve your return on ad spend (ROAS).
How to get the best reach
Exposing your products/services to as many potential customers as possible will likely be central to your advertising strategy. However, the number of people you're looking to reach can also depend on your business model.
Display ad networks can have a huge audience base. For instance, Google Display Network (GDN) displays ads across 35 million websites and apps, including Google-owned properties such as YouTube and Gmail.
However, if you only use a single closed network, you’ll limit yourself to that network’s publishing partners. On the other hand, using a demand-side platform (DSP) automates the process of buying ad inventory across multiple display networks and ad exchanges.
Most display networks support all major ad types, such as videos, images, HTML5, and rich-media ads. On the other hand, DSPs not only support all major ad formats but also have access to a greater range of ad inventories.
For instance, with programmatic advertising, your video ads are not limited to Youtube or other websites associated with GDN. Depending on your target audiences, some video ads can be more effective on other websites than on YouTube.
Programmatic advertising’s precise targeting
Once you have your data-driven marketing strategy, programmatic advertising allows you to target customers based on a host of factors such as user location, demographics, online behavior and retargeting.
The more precise your targeting model, the greater chance you have of boosting your conversion rate.
Pricing model differences
When it comes to pricing options, display networks usually offer three types of pricing for advertisers. If you are planning to publish your display ads through display networks, you are likely to run across the following pricing choices:
- Cost per click (CPC): In this model, an advertiser pays based on clicks.
- Cost per mile (CPM): This model calculates the cost for every thousand impressions.
- Cost per action (CPA): This plan calculates the cost based on specific actions, such as sign-ups, clicks, etc.
The cost for programmatic advertising is typically calculated using a CPM model, with ad formats and targeting options all set to affect the final cost.
Display ads on a display network are typically charged on a cost-per-click (CPC) basis, which can mean advertiser campaign costs can skyrocket unless a predetermined CPC budget has been set. Once an ad campaign’s budgetary ceiling has been reached the campaign will automatically be suspended, however.
On the other hand, programmatic ads are purchased via real-time bidding (RTB) and are charged on a CPM basis. Programmatic advertising discovers the market price based on supply and demand across multiple ad exchanges and networks.
Because programmatic advertising is considered far more efficient than traditional predetermined pricing methods, it has become the preferred method of buying and selling ad units.
As such, determining the cost-effectiveness of selecting a display ad network over programmatic advertising comes down to your budget and ambitions for reach. A short-term ad strategy that focuses only on display ads means that display networks may prove to be the more reasonable pricing option.
Programmatic advertising transparency
Automation allows advertisers to get in-depth ad reports. With programmatic advertising, advertisers can also track their ads how they want, which is why the process has come to overshadow more traditional deal making in the advertising space.
An excellent marketing strategy begins with a great understanding of the targeted audiences. That being said, the online advertising world offers today’s marketers a wide variety of marketing tools to fulfil every demand of digital advertising.
Display networks offer multiple options and excellent targeting choices for your display ads. Publishing your ads with display networks can help you efficiently promote your products and services.
However, if you are looking for a broader reach and a more advanced way of advertising your products/services, you may want to opt for programmatic advertising for your display ad campaign. It all depends on your business needs and the target audience because you know them better than anyone else.
Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.
If you’re making more than $2,000 in monthly ad revenue, contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.