Suppose the COVID-19 pandemic has shown us anything. In that case, 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 to almost 500 billion in 2022 and will reach 550 billion by the end of 2023.
Programmatic buying and selling of ads is 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. Still, this article will focus on the programmatic monetization tactics that can boost sales for publishers of any size.
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Consider implementing various programmatic monetization tactics
Publishers need new ways to monetize their advertising, and programmatic advertising requires new monetization strategies to be more effective. 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 a built-in marketplace;
- granular reporting abilities;
- various ad formats available;
- better understanding of the audience;
- advertiser-level data;
- work client-side, server-side, or combine both in hybrid.
In the wake of header bidding technology’s 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.
Consider experimenting with different ad formats to generate revenue
To choose the right monetization strategy, one must be fully versed in the ad formats available through programmatic and lucrative for the advertiser’s needs.
Display Ads. Usually refer to banner advertisements at the programmatic ecosystem’s header, footer, or sidebar. 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 shown 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 streaming platforms such as Youtube or as a display banner in the video player.
Audio Ads. Programmatic audio is rising as it can quickly maximize revenues for podcasts, streaming apps, and digital radios. In addition, the placing is done in real-time. It 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 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 targeting capabilities. Social advertisement can also be extended to 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 ads are shown outside and not only on personal devices, the approach to targeting is slightly different; however, all other processes are automated just as with any other programmatic ad format. Along with the increase in digital advertising screens across the country, US DOOH advertising spending is expected to grow to $17.54 billion in 2023.
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 programmatic advertising.
Take a look at the most recent trends in programmatic monetization
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 address 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 content – 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 programmatic 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 from Wordstream shows that 85% of Pinterest users have purchased because they saw a product on Pinterest and found it visually appealing. With the help of powerful AI (artificial intelligence), users can get relevant results, and advertisers can take advantage of this trend by placing relevant ads in 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.
Programmatic 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 excellent 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 have become especially popular in recent years. Podcast ad revenue is expected to hit $2B by 2023 according to a Variety report published on Yahoo, so all evidence points to the steady rise of programmatic audio ads.
Another hot topic within this advertising branch is voice-activated ads integrated within smart home devices such as Alexa or Google Home. With people spending more time indoors, audio ads can optimize buyer’s journeys and seamlessly integrate ads into home devices with high accuracy.
The increasing trend of personalized advertisements
The world of digital advertising is constantly developing, responding to outside triggers and innovative technologies. With abundant information and visual imagery, viewers become more demanding and react to creative and personalized messages. The industry strives for that right now, and programmatic advertising can assist with this aim. Programmatic ad technologies allow advertisers to measure the payoff 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 approach
Last but certainly not least is a tendency in programmatic advertising; it might even be the most important one. The losing game in the ad industry is to stick to one solution and go with it without adjustments and proper strategy. To create a successful programmatic monetization strategy, publishers must evaluate their capabilities and advertising partners’ needs, review the latest trends and ad formats, adhere to technological advancements, and pick the strategy that fits them the most, constantly evaluating the performance and altering it. The importance of the omnichannel approach and solid analytical reports is very high under such circumstances. Programmatic advertising can undoubtedly provide that, but figuring out what works for you as a publisher and what does not is a responsibility worth taking seriously.