It’s no surprise that more processes are becoming automated, and marketing is no exception. After all, it takes a lot of time to run ad campaigns, to monitor the data, to research the best market in which to place the ad, and so on. Programmatic ads are designed for that purpose, but there’s some confusion as to how they work. So, let’s take a look, shall we?
What are programmatic ads?
The simple definition is: the use of software to purchase digital advertising.
The traditional process involves human interaction, manual creation and tracking, and research. Programmatic ads eliminate much of the human element, and while this could mean fewer ad buyer jobs, it also lowers the expense of digital ad purchasing.
Before, once the proposals, quotes, and negotiations were complete, the manual insertion orders would begin. With programmatic ads, algorithms determine the best placement of ads, freeing up the human who would have handled the execution of digital ads to improve and optimize that execution while the machine does the dirty work.
Better audiences, better exposure
In 2017, estimates state 84% of all digital ad spend in the US was on programmatic advertising. Thanks to the algorithms, these ads are far less hit-and-miss than human-tailored campaigns, so the reach is greater, and the outcomes more successful. But what is programmatic advertising really?
- Amazon Marketing Campaigns for space in the Recommended For You section
- Facebook targeted ads
- E-Bay advertising based on previously browsed auctions
Those are just a few, but let’s take a closer look at one in particular: Amazon.
Programmatic ads eliminate much of the human element, and while this could mean fewer ad buyer jobs, it also lowers the expense of digital ad purchasing.
Advertising for the little guy
I’m going to use a real-time example to illustrate the benefits of programmatic buying. As a self-published author in my other life, I use Amazon Marketing Services to purchase targeted programmatic ad space to reach a wider audience.
To set it up, I created a campaign and followed the fairly simple directions, waited for Amazon to approve it, and then spent most of my time tweaking the keywords associated with the ad. I took the book cover of my most popular title, wrote an extremely short summary of the plot (the character limit is designed to fit in thumbnail ads), and put in a bid for how much I was willing to pay per click. I set mine at $.05. If someone has an ad competing for the same space, but their bid is $.03, I’ll win and my book will be shown. People who bid higher than $.05 per click will win over me.
Then, and this was very important to me as I’m on a strict budget, I set my daily payout limit to $5. No matter how many ads are shown, once I hit that limit, my ad drops out of the spotlight until the next day, so I never fear going over budget.
Once the ad went up, people who searched for things that matched my keywords would see my book in their recommendations section. The algorithm also found other books similar to mine—same genre, in my readerships’ also-boughts, etc—and put my ad at the bottom of those pages for people browsing in my genre to see, whether or not they hit one of my keywords.
A note about keywords: mine are specific to how Amazon categorizes books in my genre, but a good place to mine for more is in your Google SEO optimization.
I chose things like other popular authors and series in my genre, plot elements, and such. You can have a lot of keywords on your Amazon ad campaign, so I took as much advantage as I could. Depending on your industry, your keyword information may differ. You may not want to tag so heavily on competitors, but in the book buying world, that’s how readers find new authors—by getting recommendations based on their favorites.
By the numbers
Does it work? You bet it does.
I set my daily budget, my per click bid, and all my keywords, and then I walked away while the ad did its thing.
I check it now and then, but it’s still ticking along a year later, at an average return of 12.46% Average Cost of Sales, with nearly 700,000 impressions and more than 3,000 clicks.
I’ve spent slightly more than $100 in the year since the ad went live, and I’ve made nine times that amount in sales.
In the book world, nearly $1,000 in sales on a book that was 5 years old when I placed the ad, that’s not only found money, that’s nigh on a miracle. And because it’s the first book of a series, the sequels have seen an uptick in sales, too, as those who like the story read the further adventures of my main characters. Those readers are now in my pocket (I hope) as I get ready to release the next book in that series at the end of this month.
First, I wouldn’t be able to compete in a big market like publishing without access to programmatic ads like my little Amazon campaign. I simply don’t have the budget to go up against Random House and the like in terms of marketing spend. But by going digital, I’m getting my title in front of fresh eyes without having to do much more than pay between $10-$15 a month for my campaign. I like to think they’re eyes that wouldn’t have found me another way. I certainly don’t have 3,000 friends (yet) on Facebook or Twitter (well, maybe combined, I do) for my social media to have that much impact. So for my super-specific niche of the market, those 3,000 clicks are a resounding success. And I’m a little fish. Even the medium and big fish swim in my waters, and I don’t worry about getting eaten. People still see my ad.
Second, this kind of marketing only gets better the bigger your budget. If you can afford $50 a day, or $100 a day, that’s just that many more times your ad flashes on someone’s screen. The beauty is that someone is more likely to pay attention because the algorithm has chosen them as part of your target audience. The more clicks you get, the more refined your targeting gets, and the more clicks you get. Beautiful cycle, isn’t it?
Last, I’ve learned quite a bit about programmatic ads since setting up a campaign, but when I started, I was by no means a digital ad expert. If you’ve got someone on your team who is? The sky’s the limit for what you can do with a programmatic ad. If I can do it, anyone can. It’s that easy.
READ NEXT: 2018 Email Marketing Trends
LISTEN NEXT: Don’t Assume You Know Your Customers (episode 37)