Programmatic Advertising: Bidding Strategies for Display and Video
Digital advertising continues to evolve by finding ways to more effectively micro-target. The goal is to use data analysis to make display and video ads more relevant and timelier. Small adjustments can be made to an ad to appeal to a specific audience. The tasks involved in finding that audience and selecting the right ad to serve up to them is time-consuming. Just like in manufacturing, artificial intelligence (AI) is used to automate many of these tasks. In this way, advertisers can focus their energy on display and video bidding strategy rather than manual tasks like bid adjustments.
Programmatic advertising uses software that is driven by AI and machine learning to automatically bid on and purchase digital ad inventory. It literally targets individuals based on their specific online behavior. Ads can be served up based on brand loyalty, previous purchases, and browsing habits. Programmatic advertising is only as effective as the objectives given. Humans know (or should know) their target audience. AI can determine where they are and make judgements based on their online behavior. But you need to tell them who to look for.
The Human Factor
The idea of AI is to think faster and more intelligently than any human. But AI does not always understand the subtleties of human existence. For example, immediately serving up ads to sell products related to a sports figure who just tragically died. Most users would find this tacky. AI may also find it difficult ensuring an ad is culturally appropriate. The human mind still understands nuance in a way that still cannot be artificially reproduced. However, the speed at which decisions must be made to buy online ad space makes programmatic advertising a necessity.
According to eMarketer, programmatic advertising accounted for 84.9% — nearly $60 billion – of the ad display market in 2019. Video ads grabbed one out of every two dollars spent. By 2021, eMarketer estimates that programmatic ad spending will increase to $88 billion.
The process kicks off when a person visits a website that uses programmatic advertising. A supply-side platform (SSP) works on behalf of the publisher to sell the available ad space for this particular user. The details come from the user’s cookies, such as where they are located, their demographics, and their interests.
The demand-side platform (DSP) acts on the behalf of the advertiser. It reviews the information provided by the SSP about the user. If it meets the targeting and budget criteria, a bid is placed. The SSP selects the winning bid and serves up the ad.
Amazingly, the process takes place in milliseconds.
Here we focus on Google’s ad platform to give you an idea of the bidding strategies available to you.
Below are the five Smart Bidding strategies you can use.
- Target cost per action (CPA): Google helps you get as many conversions as possible without exceeding the max CPA you set.
- Target return on ad spend (ROAS): Google Ads determines the max cost per click (CPC) in an effort to meet the ROAS you set. You have to provide a sufficient amount of conversion data from the past 30 days to feed the algorithm.
- Maximize Conversions: You setup a maximum ad budget and Google Ads optimizes your bid for conversions.
- Maximize Conversion Value: You set up a value, such as sales revenue. Google Ads automatically optimizes and sets bids within your specified ad budget.
- Enhanced cost per click (ECPC): Google Ads adjusts your manual bids automatically for clicks that have a better chance of leading to a sale.
TrueView for Video
Google (who owns YouTube) offers TrueView ads. There are two options for bidding:
- Maximize conversions. Advanced machine learning customizes your bid at each auction.
- Target CPA. You decide the average amount you will pay for each conversion. Your bid is automatically set to garner as many conversions as possible at your target cost.
A critical part of your video ad strategy is selecting the right type of TrueView ad. There are four options:
- In-stream ads will let viewers click on the “skip ad” button after 5 seconds. You only pay when ads are viewed completely or up to 30 seconds. (Your ad probably should not be longer than 30 seconds anyway.)
- In-slate ads, like TV commercials, are shown at various points throughout a video. Best for longer video content.
- In-search ads are based on keywords you associate with your ad. You pay if the viewer starts to play your ad. Compelling content at the get-go is imperative to hold the viewer’s attention.
- In-display ads appear in YouTube-promoted videos. They also show up in video suggestions and related videos. Or, in Google’s CTP (Click to Play) format. You pay when viewers select your ad to watch.
Working with Affix Advertising allows you to tap into our network of direct publishers. Our programmatic buying and real-time bidding environment will get you top ad placement. More importantly, we help your brand identify and create custom audiences and engage them with the messages that will inspire them to act. Now.
Each and every campaign we develop and manage includes Key Performance Indicators (KPI) to drive optimization. What drives us is a deep understanding of our clients’ goals. We maximize your campaign’s reach with our proven data-driven approach. You don’t have to take our word for it: we provide transparent reporting so you know exactly where you are reaching your audience and how they are interacting with your content.
The most effective programmatic advertising includes the human touch. But the humans reviewing your campaign results and tweaking your strategy must have expertise in digital marketing and data analysis. (Um, that would be us.) A free strategy review from Affix Advertising will let you know if you’re on the right track – and how you can improve your programmatic advertising as well as your overall digital marketing approach.