Programmatic vs Google Ads: Which Is Better?

Programmatic advertising and the Google Display Network (GDN) are synonymous with online advertising. 

Marketers in the US poured more than US$356 billion into digital advertising in 2020 and this figure is projected to climb to US$460 billion by 2024. At the same time, automated advertising now accounts for more than 80% of US digital display advertising spend.

Despite the potential, it can sometimes be hard to pick between programmatic advertising and Google Ads (formerly Google Adwords) when developing an ad strategy.

Don’t worry, we’ve got you covered in this article.

By the end you’ll understand the differences, similarities, and advantages of both programmatic ads and the Google Display Network.

Plus, you'll quickly figure out which is the better option for your products and services.

Table of content:

• Importance of Programmatic Ads and Google Ads

• Which should I choose?

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Importance of Programmatic Ads and Google Ads

Before automated advertising became the norm, advertisers had to establish a relationship with publishers to run ads on their platforms, such as websites, blogs, and mobile apps.

The problem with this model of buying and selling ads is that it's cumbersome and challenging. In some cases, advertisers may not know the publisher that has both a suitable audience and available ad inventory.

Programmatic advertising and the Google Display Network remove the bottlenecks and unnecessary effort associated with traditional marketing. After setting your parameters at the start, everything that follows is automated.

Also Read: 9 Programmatic Advertising Trends You Need To Know

What is the Google Display Network?

The Google Display Network integrates with websites, YouTube, emails, blogs, and mobile apps that partner with Google.

The GDN serves Google Ads to more than 2 million websites, YouTube videos, and applications. Advertisers can potentially reach up to 90% of the world’s internet users.

Being an automated ad network, the network displays ads to prospective customers when they visit a website.

The adverts are served based on the metrics set by the advertiser on the GDN, including age, demographic targeting, gender, interest, qualifications, and more.

One of the GDN’s added bonus is the fact that you can integrate services from the Google product suite (Google calendar, Google Docs/Sheets, etc.) in your campaigns.

How Does the Google Display Network Work?

Google Display Network targeting allows advertisers to choose their targeted audience’s characteristics. Their age, personal interests, gender, and demographics determine which ads are displayed.

Since publishers on the ad network are linked to Google, advertisers can add in metrics such as Google Search history. Advertisers can reach a more specific target audience based on keyword targeting and user demographics.

Getting your keyword targeting and other targeting options right means your ads will appear on sites related to your business where visitors may be interested in your products or services.

To run ads on GDN—if you are not doing so already—follow the steps below:

• Log in to your existing Google Ads account or create a new one
• Navigate to and click on "Campaigns", then "New Campaign"
• Set the campaign type to "Display Network only"

Next, select the types of GDN targeting you want in your campaign.

Ads are sold on the GDN under auctions that invite bids either on a cost-per-click (CPC) or cost per thousand impression (CPM) basis. The winner pays the minimum necessary to outrank the next advertiser.

What is Programmatic Advertising?

Similar to the Google Display Network, programmatic ads are also automated, removing the need to connect with many third-party agents. However, unlike the GDN, the programmatic advertising process encompasses many other ad exchanges and ad networks, including the GDN.

Programmatic ads can also encompass native ads.

Advertisers use demand side platforms (DSPs) to buy ad inventories to create campaigns. On the other hand, publishers use supply side platforms (SSPs) to show they have available ad space.

The DSPs and SSPs quickly connect advertisers and publishers without requiring direct negotiations. By automating the process, programmatic ads allow advertisers to reach their target audience at the right time and price.

Is Programmatic Advertising Similar to Behavioral Advertising?

Behavioral advertising is a type of audience targeting that can be used during the development of a programmatic ad campaign. Behavioral ads measure an individual user's online behavior, such as shopping habits, to generate ads.

Behavioral targeting is falling out of favor, however, with the rise of privacy focused regulations such as General Data Protection Regulation (GDPR).

As such, programmatic advertising’s other targeting options such as contextual targeting are an increasingly more desirable strategy.

How Does Programmatic Advertising Work?

Programmatic ad campaigns are broader in concept than those on Google Display Network, mainly because they can encompass a wide range of platforms, including GDN.

Using DSPs and SSPs, programmatic advertising software allows advertisers and publishers to quickly connect on ad exchanges including Google Ad Exchange, Rubicon Project, and AppNexus.

These programmatic ad exchanges use third-party data from data management platforms (DMPs), such as Cloudera and Salesforce DMP.

Unlike in the past when buying digital ad inventory was intricate, programmatic ad buying is simpler. On the DSP side, advertisers use real-time bidding (RTB) to bid for digital ad spaces available on an ad exchange.

The advertiser with the highest bid secures the individual ad unit, but other advertisers can still win other ad slots in subsequent RTBs.

There are a number of deals that can programmatic advertising offers and these include:

• Open Auction - The most typical auction, which involves RTB.
• Private Auction - This is similar to an open auction, but publishers can restrict advertiser participation. 
• Preferred Deal -  Publishers use this option to sell premium ad inventory directly at a fixed CPM.
• Programmatic guaranteed - A single advertiser agrees ad space and pricing with publishers bypassing auctions altogether.

Programmatic advertising charges on a cost per mille (CPM) basis, meaning that advertisers pay per thousand impressions.

Programmatic Advertising vs Google Display Network: The Similarities

GDN and programmatic advertising have some similar features, including automation, creative placement, shared basic targeting options and targeting capabilities, as well as supporting the major ad creatives.

Aside from their differences in terms of reach, both platforms are fairly similar and can help businesses build a strong marketing strategy.

Programmatic Advertising vs Google Display Network:

The Differences

Although both programmatic advertising and the Google Display Network are very similar in scope, there are a few differences in addition to reach that you should know to help you make the right marketing decision.

Pricing

GDN doesn't require as large budgeting as programmatic advertising. It employs the following payment models, making it a cheaper option.

• Cost per click (CPC)
• Cost per mille (CPM)
• Cost per action (CPA)

Programmatic advertising only uses the CPM model.

Cost-Effectiveness

Because all the processes are automated, both platforms are cost-effective. However, programmatic advertising uses real-time bidding in a vendor neutral environment to reach a larger audience.

As such, weighing up which is more cost effective will come down to your marketing campaign’s budget and audience objectives.

Video Advertising

Programmatic advertising can include video ads and you can set the scope of your campaign to include or exclude YouTube.

Which should I choose?

Both approaches are effective, but programmatic advertising takes the lead in terms of reach, ad variety and number of deal-making options. That said, launching ad campaigns with programmatic advertising can be more expensive than with GDN and is a riskier bet for those without experience in the space.

If you're just starting to experiment with digital advertising, you may be better off limiting your ad campaigns to GDN until you find your feet. As your revenue grows you can then set aside a budget for programmatic advertising and experiment.

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.