6 Types Of Programmatic Advertising (Plus Advantages)
Updated 6 September 2023
Programmatic advertising allows marketers and advertisers to automate the media buying process. There are many types available for programmatic advertising and media buying, with the most appropriate depending on a brand's audience and marketing goals. If marketing and advertising interest you, or you want to start a career in this sector, learning more about programmatic advertising can help you advance your career. In this article, we explain six types of programmatic advertising and review the benefits.
What Is Programmatic Advertising?
Programmatic advertising is automated technology that determines which media to purchase for digital ads. For example, instead of a media buyer purchasing space on a website to display an ad, they use a program that automatically purchases and displays appropriate content. Programmatic media buying and advertising uses algorithms and data to purchase media, and show ads that attract viewers.
6 Types Of Programmatic Advertising
There are several different types of programmatic advertising that marketing teams can apply to many advertising formats. Advertisers select the most appropriate media for the campaign based on target market information. For example, if the target market prefers reading articles to watching videos, the advertisers are more likely to use display or native advertising. Here are examples of programmatic advertising:
1. Audio ads
An audio ad only uses sound, such as voice and music, to advertise to listeners. These ads appear in media that focus on audio platforms, such as podcasts, music streaming programs and news websites. Some audio ads can accompany videos and display media. For example, a marketer for a car manufacturing company may place programmatic advertising, such as an audio ad, within a podcast about new cars.
2. Digital out-of-home ads
Digital out-of-home ads are those that you observe in public places. Advertisers often place these ads on billboards, public transport, airport screens, in cinemas and sports arenas. For example, a shopping centre may have a kiosk with information on clothes and food that also displays interactive advertising maps highlighting local stores.
3. Display ads
A display ad uses images and visuals to communicate information, and generate interest in a product. These ads often appear in the header, sidebar and footer of websites, and search engine results. Websites can also show display ads as overlays and pop-ups. For example, when browsing a carpenter's blog, a user may view display ads on the sides and top of the web page. One ad may be for a hardware store that sells tools and fixtures, while another advertises a large truck the user might use to transport wood for carpenter projects.
4. Native ads
Advertisers create native ads using the content's form and style. For example, a native ad for lipstick in a lifestyle magazine may appear as an article about choosing the correct shade. Here are some types of native ads that programmatic advertising marketers use:
Rewarded video ads
5. Social media ads
These ads appear on social media websites, using the same form as the content on user profiles. Programmatic social media advertisers consider users and their interests when determining which ads may be most successful in their feed. Marketers can also use programmatic advertising to choose influencers and manage influencer marketing campaigns.
6. Video ads
A video ad uses visuals and audio to communicate information about a product or service. They often appear in places where users consume video content. For example, if a user searches on a video website for easy recipes, programmatic advertising may show an ad about a meal kit subscription service.
Types Of Programmatic Media Buying
Media owners and buyers can complete transactions depending on their needs. Here are some different methods advertisers use to buy media for programmatic advertising:
The preferred deal method allows advertisers to choose the ad inventory they want. In preferred deal offers or spot buying, advertisers select their choice of media before the media owner offers it on private marketplaces or in auctions. The buyer and seller negotiate on the ad's price, and target audience before completing a spot deal.
Programmatic guaranteed deal
Programmatic guaranteed, or programmatic direct, dealing is a traditional approach to media buying. The media has a fixed cost in this type of transaction. It differs from other types of buying because the owner does not auction the media or require a bidding process for the ad space.
Private marketplace deal
In private marketplace media buying, the owner uses the auction method. Unlike in real-time bidding, private marketplace deals are more selective. For example, there are often restrictions on which advertisers and publishers can participate in the auction. Many private marketplaces invite their advertisers, and some also offer application processes.
Real-time bidding is open to all advertisers and publishers. In this type of media buying, the price of the advertising slot changes in real time. Buyers and sellers also refer to this as the open auction process. Real-time bidding can be a cost-effective way to purchase media, especially if the brand has a large audience.
Advantages Of Programmatic Advertising
Programmatic advertising is more efficient than the traditional method because it allows advertisers to delegate the task of choosing which ads to show and where to show them. For example, advertisers can use AI technology to automatically select ads likely to impact the user. Here are some other advantages you might gain with programmatic advertising:
Marketing and advertising teams often have strict budgets they adhere to when promoting content, and showing ads. Programmatic advertising uses data to make decisions, helping advertisers ensure they can optimise their advertising spend. Programmatic advertising can help companies improve their return on investment and allocate campaign funds to the most effective areas.
The goal of many online marketers is for a user to select their ad and visit the website or landing page for the product, or service, encouraging them to make a purchase. This format can create opportunities for fraudulent ads that can download viruses, steal personal information and make advertising more challenging for real businesses.
Programmatic advertising platforms offer transparency and have requirements that reduce fraudulent advertising. They use real-time data from publishers to determine which sites are legitimate. Many platforms also block fraudulent advertising bots and harmful ad campaigns, which improves the advertising experience for everyone.
In traditional advertising, analysts can require a significant amount of time to gather data about how an ad performs. This delay can make it challenging for companies to measure performance. For example, when a company advertises its restaurant in a local newspaper, knowing which customers visited due to the ad is complex.
Programmatic advertising uses real-time data based on clicks, impressions and direct purchases to provide an accurate assessment of how an ad performs. For example, if programmatic advertising places the restaurant ad on a local travel site, it can track which customers view the menu or place an online order through that link. This type of data collection can help the platform learn more about the target audience and further optimise ad placement.
Targeting is when you determine your target audience for direct advertising. For example, a vitamin company may determine its target audience as middle-aged people with an average income who care about improving their health. Programmatic advertising can improve targeting by using first-party and third-party data to understand the audience profile better.
For instance, the vitamin company could use the data from programmatic advertising to further narrow the target audience to those who live in high-altitude areas and require certain supplements for bone support. Targeting also includes contextual advertising, which gathers information on both the user and the page they are viewing. This allows the programmatic advertising program to determine who to show the ad to and where to show it to them.
Roles That Use Programmatic Advertising
These are some jobs that might require programmatic advertising skills:
Digital Marketing Analyst
Paid Media Strategist
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