If the recent pandemic has shown us anything, it is the crucial role of the Internet in our daily lives, work, and business ventures. Numerous research shows that the time people spend online has increased significantly. Combining this with the need for brands and online entrepreneurs to adjust to the changing digital landscape, we can comprehend why the programmatic advertising market has grown by 24.9% to reach $14.2 billion in 2020.
Automated buying and selling of ads seem incredibly lucrative during crisis times, as it can effectively help launch ad campaigns reasonably quickly, with minimal costs and workforce, great targeting options and scaling abilities, higher ROI, and cross-device campaign possibilities. Of course, there are many more attractive qualities of programmatic ads, but this article will focus on the programmatic monetization strategies that can boost sales for publishers of any size.
What is programmatic advertising
Programmatic advertising is excellent for helping publishers get the best possible price for their inventory. But, of course, various combinations can help achieve this goal, along with many other available possibilities.
First, let’s quickly recap the terms and definitions. Programmatic advertising is the process of buying/selling ad inventory in real-time through automated bidding exchanges.
Monetizing ad units requires a Supply-side platform or SSP. A platform that helps publishers to oversee all of the automated ad sales and related processes. One of the best features of this solution is eliminating any mediators such as sales managers to negotiate any stages of the ad management. Instead, the SSP links to ad exchanges and evaluates the ad space for sale; then, this space is auctioned to the highest bidder, bringing the most lucrative price home.
Programmatic sales are ideal for publishers with significant amounts of web traffic. With its optimization algorithms and consistent delivery of the highest CPMs (cost per 1000 impressions), programmatic attracts many websites to automate ad sales and maximize ad revenue.
Here are some of the main benefits of SSP for publishers:
- More control over your inventory. With SSP, you can set prices and make deals more clearly and transparently. You can make sure that your ad space is sold at the maximum possible price. Having access to ad exchanges and ad networks can bring more partners, create more competition, and thus increase rates.
- Great reporting. Measuring data from bidding processes can be evaluated for potential adjustments. You can always bring necessary changes according to performance reports. Various filters can assist with picking only the best and most trusted advertising partners and blocking the undesired ones.
- Simple interface. Control your inventory from one place.
- Integration possibilities. The SSP can be single-player or combined with other solutions such as ad servers and data management platforms to get the best results.
- Great targeting capabilities. The leverage of different types of data helps SSP to create advanced targeting options. The platform can often employ remarketing, geo-targeting, data and IP address targeting, website or app targeting, and many other possibilities to enhance the accuracy and quality of shown ads.
- Wide reach. Another great feature of SSP is the potential reach, thanks to the access to multiple ad exchanges and networks that allow advertisers to get the best inventory on thousands of websites with affordable prices and minimum efforts – increasing the demand for publishers who utilize programmatic advertising.
We have mentioned that SSP can be combined with other solutions to enhance the platform’s capabilities. For example, an Ad exchange is one such solution that provides many additional opportunities for the publishers.
Ad exchange stands for a digital marketplace that ensures the programmatic selling and buying of the ad inventory by utilizing real-time bidding (RTB).
Real-time bidding is a technology that provides each auction participant an equal opportunity to win in the programmatic auction for the ad inventory, with the highest winning bid.
Ad exchanges usually connect sellers and buyers via supply-side platforms (SSPs) and demand-side platforms (DSPs). As a result, they provide numerous opportunities in terms of various ad formats and cross-device campaigns possibilities.
Ad networks are also used similarly, but it serves as a mediator that offers advertisers previously unsold impressions from different sources. On the contrary, ad exchange provides a centralized connection between publishers and advertisers.
Many advantages can be gained from tapping into ad exchange for publishers in particular:
- access to the extensive demand for their inventory;
- possibility to set the minimum CPMs to get the best possible yield;
- filtering and blocking of fraudulent or undesired media content;
- vast control over the ad formats and integration types;
- flexibility to set the time and place of the ads;
- ability to offer customization options to advertisers to automatically upload specific ad parameters such as message, ad creative.
Overall, ad exchanges are really great at helping publishers squeeze the most out of their inventory, grant control over who bids in the auctions, and facilitate the highest possible incomes.
Data Management Platform or DMP is another useful solution that can help publishers better monetize their inventory.
Essentially, DMP is a platform that gathers data from all advertising channels and accumulates as much information about the audiences as possible.
DMPs are responsible for data collection, storage and segmentation, and versatile analysis of the intel and filtering.
Publishers can leverage DMPs to determine the preferences of their audiences, which ad content performs better and assists in leveraging this knowledge. These possibilities result in superior personalization and more relevant ad content, thus increasing viewers’ engagement and conversions. Such opportunities are attractive to the advertisers and lead to more clients for the publishers who implement DMPs.
Some of the key benefits of implementing DMP for publishers are:
- convenient multi-sourced data storage in one place;
- access to different types and vast amounts of data;
- audience insights with powerful analytics;
- utilizing Big Data analytics and Machine Learning to get a complete customer profile and improve your CRM systems;
- superb targeting capabilities;
- easier to navigate and comply with privacy laws via DMP.
DMPs are usually integrated with demand-side platforms (DSPs) on the advertiser’s side or supply-side platforms (SSPs) on the publisher’s side and ad exchanges to take full advantage of the ad inventory available.
Simple integration of DMP with different DSPs opens up access to new sources of revenue for publishers by offering their segmented audiences intel to multiple platforms. In addition, DMP helps publishers monetize the data they aggregate by tracking various user activities and analyzing their online behavior. This information is valuable for advertisers as it facilitates better targeting and drastically improves engagement with their ad content.
Even though targeting options are at the advertiser’s level, DSP can be leveraged to the publisher’s advantage. To improve scalability and gain access to more audiences, publishers need to alternate and optimize their media buying. DSP can offer this chance to avoid dealing with agencies and provide an in-house automated media buying through RTB. In addition, it means fewer operational processes and human resources savings.
Taking advantage of the DMPs functionality is another good way to attract new clients. Advertisers are always on the hunt for quality data that enables better targeting and more engaged viewership. DMP can quickly provide such services, topped with great analytics and assistance in GDPR adherence struggles. Implementing DMP into one’s monetizing strategy is an excellent way to receive maximum yields by fully leveraging one’s data.
Programmatic monetization strategies
There are a couple of ways to leverage programmatic advertising for publishers. First, it can be done through different types of programmatic deals, and it is essential to figure out which type is beneficial for a particular business model and strategy.
Open Auction or Real-time Bidding (RTB) is a way of media buying/selling ad impressions that can be bid in real-time. Through auctions, publishers offer their inventory in an ad exchange with a minimum price per thousand impressions (CPM), and advertisers place their bids; the highest bid wins.
Programmatic direct deals encapsulate three types of ad buying – Private Auctions, Preferred Deals, and Guaranteed Deals. Direct deals mean that the ad exchange is not a part of an ad selling/buying process, and the deal is struck between a seller and a buyer without any intermediary.
Private Auction is similar to Open Auction but gives a chance to publishers to grant participation rights to certain advertisers. An invite-only auction gives bidding priorities to a selected group of advertisers before the inventory becomes available for everyone. The rest is pretty similar to an Open Auction – publishers set a minimum cost, advertisers bid, and the highest offer wins the auction.
Preferred Deal is an option that does not include an auction but instead enables publishers to sell premium inventory at a fixed price to a predetermined group of advertisers. The CPM is negotiated beforehand, and the bidding takes place in real-time among the selected advertisers, granting the right to inventory to the highest bidder or the one that bids the negotiated price. In this way, advertisers gain access to the most desired inventory, and publishers get a stable and predictable income.
Guaranteed Deal is similar to the preferred deal, but the fixed amount of impressions is for sale here, and the exact price is negotiated with a buyer beforehand. So both seller and buyer are guaranteed to make a deal with these predetermined conditions.
Header-bidding auction is an advanced programmatic deal where publishers propose their inventory to various demand partners at the same time before making calls to their ad servers. By arranging multiple sources bidding on the same ad slot simultaneously, publishers can achieve better yields.
The header bidding can be done via header bidding wrappers. For example, Adtelligent Header Bidding Platform offers a simple setup of the framework, with the following range of benefits available:
- access to numerous big buyers using built-in marketplace;
- granular reporting abilities;
- various ad formats available;
- better understanding of the audiences;
- advertiser-level data;
- work client-side, server-side, or combine both in hybrid.
In the wake of header bidding technology arrival, Google recognized the need for the proper response as it had begun to lose its position in the digital advertising ecosystem. As a result, Google Open Bidding handles any interaction between a publisher and an advertiser in Google Ad Manager utilizing a server-to-server (S2S) integration. The main difference with header bidding platforms is that Google conducts all interactions as an S2S vendor, not in the web browser as with header bidding auctions.
The technologies are pretty similar. However, Open Bidding has a few disadvantages:
- More difficult to implement. Header bidding is very simplistic in its integration – anyone can get the wrapper code from open source Prebid, and the publisher is good to go. To start with Open Bidding one must have a Google AdX account and access to the premium Google Ad Manager 360. It means more costs and additional requirements to be eligible for the GAM 360.
- Less transparent. During header bidding auctions, publishers have access to all of the data concerning bidding, as the auction is happening on their website. Open Bidding by Google gives access to publishers, but only to specific data without complete control of the process.
- Worse cookie matching. Due to the need for cookies to be synchronized between Google’s servers and ad exchanges in the bidding process. In header bidding, participants can match cookies during each request, making the whole process more precise.
Many publishers prefer combining Open Bidding and header bidding. It requires more proficient technical knowledge and higher maintenance, but publishers can get a better yield by adding additional demand. The drawbacks of this strategy can include higher page latency that has to be counteracted.
Beneficial ad formats for monetization
To choose the right monetization strategy, one must be fully versed in the ad formats available through programmatic and lucrative for advertiser’s needs.
Display Ads. Display ads usually refer to banner advertisements at the header, footer, or sidebar in the programmatic ecosystem. These ad slots generate income based on clicks and impressions by users on websites and apps for display networks.
Video Ads. Video ad format continues to gain popularity and attract advertisers and publishers alike. We can distinguish three main types of video advertisements:
- In-stream. Ads are integrated directly into the video player and showing during a video stream. An excellent example of in-stream ads are commercials that run after you click the Play button.
- Out-stream. Ads placed between online articles or other ad spots without video stream and player. They can be placed within the text or appear in a pop-up (interstitial ads).
- Overlay. Ads are usually displayed as recommendations on the streaming platforms such as Youtube or as a display banner in the video player.
Audio Ads. Programmatic audio is on the rise as it can quickly maximize revenues for podcasts and all kinds of streaming apps and digital radios. In addition, the placing is done in real-time and is targeted towards the viewer, which gives programmatic audio a considerable advantage in the face of the more traditional audio advertising.
Native ads. This ad format is inherently more flexible than the traditional display ads and can adjust to the medium shown. They can also appear on other websites or apps besides the standard header, footer, and sidebar.
Social Ads. Programmatic social advertising appears on social media platforms and takes advantage of its users’ vast amount of data to increase the targeting capabilities. Social advertisement can also be extended to the programmatic influencer marketing that can automate campaigns, find the right influencers to participate in them, and automate managing the ad campaigns.
Digital Out-of-Home (DOOH) is a digital equivalent of old-school out-of-home advertising. It includes such features as geofencing, tracking, retargeting, personalizing, attribution and measurement to assist with relevance in content and location of the ads, as these types of ads are shown outside and not only on personal devices, so the approach to targeting is slightly different; however, all other processes are automated just as with any other programmatic ad format.
As we figured out the basics, it is high time to jump to the main monetization trends that can be implemented to get a higher yield and maximize potential profit from the programmatic advertising.
Latest programmatic monetization trends
With the already evident rise of programmatic advertising and the expected further growth, many trends and adjustments are on the rise. Therefore, it is essential to stay up to date as the technology quickly evolves, adhering to the ever-changing market demands.
Increased interest in location-specific advertising is based on the IP addresses data and the information about their offline activities. Utilizing programmatic targeting capabilities in the best way possible, users can receive relevant ads at a perfect moment, close to the mentioned location, or in line with their daily routines. It became especially relevant during the pandemic, as fewer people use public transport, and ads should be tailored more precisely to each individual and their routes/locations. To fully take advantage of this trend, publishers need to calibrate their inventory for local and mobile searches and connect data from big tech companies.
UX as a priority
Page latency has been a struggle for programmatic publishers for quite a long time. User experience is essential for views and overall engagement with the ad сontent – no one wants to wait. In the wake of such tendencies, we can observe the rise of footer bidding, which prioritizes the load of the page content over the load of the ads. Instead of loading the ads as early as possible (in the header), it does it as late as possible (in the footer), thus preserving the website’s rankings rather than the ad loading speed. Because if the users do not enjoy the website, they will not pay attention to ads.
Server-side ad insertion (SSAI) or dynamic ad insertion (DAI) is a process during which the ad is seamlessly inserted into the piece of media content similar to the broadcast TV model. It allows showing programmatic ads while delivering a smooth viewing experience and can benefit live and video-on-demand inventory.
Visual search is becoming more and more popular each day. For example, recent data shows that 87% of Pinterest users have purchased because they saw a product on Pinterest and found it visually appealing. With the help of powerful AI’s (artificial intelligence), users can get relevant results, and advertisers can take advantage of this trend by placing relevant ads in the search results close to the content people are interested in. This results in extremely precise targeting and thus high engagement with ad content. Following the demand for such advertising, publishers can take advantage of this trend and leverage the visual search market to gain more profits.
In-game programmatic monetization
This cutting-edge trend is still very new but rapidly gaining popularity. In-game advertising leverages numerous gaming apps and is a relatively new concept, with the programmatic segment being even more revolutionary. The arrival of the 5G technology sparked the trend and made it possible, but much more work needed to be done to figure out high return segments and new metrics for targeting and viewability. The global pandemic also serves this trend as people spend much more time on their devices.
Video advertising is viral among advertisers and publishers at the moment. The trend is intertwined with the 5G introduction due to the data-heavy media used in the process. Video formats are highly engaging and show great results while also allowing for plenty of creativity for advertisers due to the nature of an ad format. So the end-user gets unique video content tailored specifically to their taste thanks to the granular targeting of programmatic; on top of that, the advertisers can now experiment with the Virtual and Augmented Reality (VR/AR) and 360-degree videos to create mind-blowing advertising content. Programmatic publishers can also receive much high-quality intel, as these ads show a high level of responses.
Thanks to the pandemic and quarantining at home, many people turned to music and podcasts for entertainment and educational purposes. Audio streaming platforms took notice, and programmatic audio formats became especially popular in recent years. Podcast ad revenue is expected to hit $2B by 2023, so all evidence points to the steady rise of programmatic audio ads.
Another hot topic within this branch of advertising is voice-activated ads that are integrated within smart home devices such as Alexa or Google Home. With people spending more time indoors, audio ads can optimize buyer’s journey and seamlessly integrate ads into home devices with high accuracy.
The growing tendency for ad personalization
The world of digital advertising is constantly developing, responding to the outside triggers and innovative technologies. With the abundance of information and visual imagery, viewers become more demanding and react to the creative and personalized messages. That’s what the industry strives for right now, and programmatic advertising can assist with this aim. Programmatic ad technologies allow advertisers to measure the pay-off of the ad content and make some adjustments on the go. Thanks to Artificial Intelligence modeling and the overall amount of data, programmatic can deliver creatives based on numerous metrics and explicitly tailored towards a specific group of users while allowing a chance to customize the ads based on their performance.
Holistic advertising models
Last but certainly not least, a tendency in programmatic advertising; it might even be the most important one by far. The losing game in the ad industry is to stick to one solution and go with it without the adjustments and proper strategy. To create a truly successful programmatic monetization strategy, publishers must evaluate their capabilities and advertising partners’ needs, review the latest trends and ad formats, adhere to the technological advancements, and pick the strategy that fits them the most, constantly evaluating the performance and altering it on the way. The importance of the omnichannel approach and the solid analytical reports are very high under such circumstances. Programmatic advertising can undoubtedly provide that, but figuring out what works for you as a publisher and what not is the responsibility worth taking seriously.