Top 5 Programmatic Advertising Best Practices for Better Marketing Efficiency

May 21, 2020

What is the role of display, video, and audio advertising in your brand’s digital marketing strategy? No matter what type of product or service you sell, digital advertising is likely one of your most important sources of revenue and user engagement. 

In fact, Forbes magazine predicts digital marketing spend in the US will near $120 billion by 2021, and they also predict that “investment in paid search, display advertising, social media advertising, online video advertising, and email marketing will pace to 46% of all advertising in five years.” 

A large portion of that spend will likely come from programmatic advertising, as brands will continue to focus on leveraging programmatic ad buying to run more efficient, reliable, and cost-saving media campaigns. 

However, programmatic buying/advertising is a complex topic that can sometimes be confusing to marketers at every level. Even if you already have programmatic advertising in place, it can be challenging to ensure that you are getting the best possible ROAS from your programmatic media campaigns. 

Luckily, you can set your brand up for success with programmatic advertising and drive better ROI from your existing programmatic media campaigns by following some programmatic advertising best practices. 

Following best practices for programmatic buying/advertising can help you establish consistent processes for isolating and testing different variables in your programmatic media strategy. You can then measure the success of specific messaging, creative, or audience segments in driving conversions. 

By using these insights to inform how you allocate your marketing budget you can decide how to best utilize the time and resources from your programmatic buying/advertising team to drive campaigns with the best ROAS. As a result, you’ll also see greater efficiency in your programmatic media campaigns and be able to reference your most successful campaigns when building future ones. 

In this blog, we’ll cover programmatic advertising best practices including how you can use audience targeting, integration with analytics data, frequency caps, overlap analysis, and outcome-based bidding to run more efficient programmatic media campaigns that cut down on waste and increase ROI for greater marketing efficiency.

What is Programmatic Advertising? 

Let’s recap what programmatic advertising is and why so many brands value it as part of their digital advertising strategy. 

Programmatic advertising is the purchasing of ad space on a publisher’s website or app through automated bidding. Automated bidding considers the interactions between advertisers, publishers, and data providers, all within the mere seconds it takes for a website page to load, to optimize the media buying process. The advertiser with the winning bid gets to display their ad in the designated space. 

The programmatic advertising environment includes a variety of different programs, but advertisers mostly work with DSPs (demand side platforms) such as Google Display Network, Display and Video 360, the Trade Desk, Amazon Advertising, and Adobe Media Optimizer. DSPs allow advertisers to purchase impressions across a variety of publishers targeted to users based on information such as online behavior, demographics, and cookie data. 

As a result, advertisers can create ads specifically for users with certain characteristics such as age, location, gender, type of device, and more. Most importantly, they can then display their ads to the right audience, at the right time, and in the right place. 

Why is Programmatic Advertising Important? 

Programmatic advertising is much more efficient compared with the traditional, manual way of purchasing display, video, and audio ad space on a publisher’s website or app. 

For example, the traditional process of buying ad space involves human negotiations, contracts, and even RFPs which takes more time and is often more expensive. This is due to the fact that humans are simply less reliable than machine learning algorithms and AI behind programmatic advertising. 

Most importantly, traditional media buying lacks the ability to measure the true ROI of media campaigns in real-time. Without being able to measure the true ROI of your programmatic media campaigns in real-time, you won’t be able to pinpoint which ads and associated aspects of those ads (creative, copy, publisher, when the ad displayed, who saw your ad, etc.) were most successful in driving conversions. 

In comparison, programmatic buying/advertising gives you real-time insights into campaign performance. These real-time insights help drive a continuous cycle of programmatic advertising campaigns while gathering and analyzing results so that you can optimize them for the best ROI and ROAS.  

This also prevents you from wasting precious budget on unsuccessful programmatic media campaigns, so you can reallocate that budget to top-performing programmatic media campaigns instead. 

Now that you have a general idea of what programmatic buying/advertising is and why it is important to brands, let’s walk through our recommended best practices so that you can get the most ROI from your programmatic media campaigns and increase marketing efficiency as a result. 

 #1: Use audience targeting to reach high-value audiences and exclude non-performing audiences to buy media smarter 

Strong audience targeting is one of the most important ways to optimize your programmatic media campaigns and ensure that you spend media budget in the most efficient way. 

Programmatic media buying/advertising allows you to segment users into specific audiences based on predefined criteria. As a result, you can ensure that your ads won’t be served to irrelevant audiences in your DSP (demand-side platform). 

This minimizes wasted ad spend on audiences that are not interested in your product or services, and ensures that each ad has the highest likelihood of getting a user to convert. Programmatic media campaigns with higher conversion rates contribute to better ROI from your overall programmatic advertising.

To get the most from your audience targeting, you should make sure your ads are highly-relevant and customized with the right creative and messaging specific to your target audience.

One way you can do this is through data-driven or data responsive creative. This uses machine learning to determine which variations of a given ad are most likely to drive a specific user to convert. 

Personalized ads have a higher click-through rate, and as a result, tend to drive more conversions. Higher conversion rates contribute to increased ROI, which can help you prove marketing efficiency and advocate for an increase in your programmatic advertising budget. 

#2: Connect programmatic advertising data with analytics data for a complete cross-channel picture of campaign performance

Connecting your ads data with your analytics data helps optimize your audience targeting. You can use your analytics data to inform which users and audiences to target, as well as when to target them as they move through different touchpoints on your customer journey. 

This ensures that you best allocate your programmatic media budget to run ads that speak to users appropriately depending on where they are in the conversion funnel. As a result, you can exclude them from certain programmatic campaigns that might not be relevant to them, which in turn prevents you from wasting media spend on showing them an irrelevant ad. 

Connecting your ads and analytics data also establishes a single source of truth for measuring overall marketing efficiency. For example, Google Analytics 360 integrates with Google’s enterprise DSP (Display and Video 360) and other important tools in the Google Marketing Platform, As a result, you can better develop attribution models to help you understand which specific touchpoints and associated campaigns deserve the most budget.  

Correctly attributing conversion credit also helps you better understand the true value of your campaigns so that you can allocate budget to campaigns that drive conversions, and avoid wasting budget on campaigns that don’t. Then, you can optimize the programmatic media campaigns with the best ROI to support other important touchpoints in the conversion funnel. 

This creates a full cycle of managing and optimizing your cross-channel digital marketing which makes it easier to react and pivot your digital marketing strategy in less time.

#3: Analyze and implement effective frequency caps to avoid showing the same ad to users multiple times

Frequency caps let you control the number of impressions on specific users on a monthly, weekly, or even hourly basis. This is a valuable way to run efficient programmatic media campaigns since you can identify different users cross-channel (via integration with your analytics platform) and then exclude them from seeing a duplicate ad. 

Showing duplicate ads to the same users time and time again wastes programmatic media budget and can actually prevent users from converting. This usually happens because they become annoyed by your redundant ads. When customers feel annoyed by your ads, this can damage brand perception and make users less likely to choose your brand compared with competitors that show them fresh, relevant ads every time.  

Implementing frequency capping also helps you allocate your programmatic media budget more efficiently by allowing you to redirect impressions from one user to another. For example, once you have reached the designated limit for how many times one user sees a particular ad, you can redirect that impression to a different user in your target audience.

This helps get your ad in front of a greater portion of your target audience, which increases reach without necessarily increasing ad spend. Increasing reach without increasing ad spend helps drive better ROAS, and better ROAS is a vital way to prove overall marketing efficiency.

#4: Look for overlap between multiple DSPs and/or inventory sources to avoid showing the same ad to a given user across multiple publishers

No matter what DSP you use to buy programmatic media, many of them tap into the same programmatic inventory. Display & Video 360 for example, extends its inventory reach to over 100 partner ad exchanges, as well as unlimited audience targeting ad exchanges. 

This can be extremely beneficial because it allows you to access a large database of available impressions or audiences. However, it also opens you up to the risk of wasting media budget by showing the same ads across multiple publishers for no specific reason. This wasted media budget could instead be allocated to buying other valuable impressions for new audiences and users. To avoid this, make sure that you are not duplicating campaign tactics or audiences across any other DSPs you might use in addition to your main DSP. 

If you are running campaigns using the same tactics and audiences in multiple DSPs, you also might be competing with yourself, and this can waste your budget by driving up CPMs. Unnecessarily driving up CPMs minimizes potential ROAS from your programmatic media campaigns, which minimizes your overall programmatic advertising efficiency. 

It is also important to understand your CPMs and evaluate if they are appropriate based on the specific goals for the type of programmatic media campaign you are running. 

This helps you analyze the overall cost-effectiveness of your ads, which helps you allocate budget appropriately. You can determine which CPMs are too high and adjust campaign settings to maintain the optimum CPM for ROI based on your given budget. The ability to make these types of adjustments contributes to increased marketing efficiency since you can ensure that you don’t waste money on high CPMS with low ROI. 

#5: Leverage machine learning algorithms for outcome-based bidding that lowers CPMs 

While there are multiple DSPs to choose from, one major benefit to Google’s enterprise-level DSP (Display and Video 360) is the availability of outcome-based bidding. 

Outcome-based bidding uses automated bidding strategies built on Google’s ML (machine learning) algorithm. The machine learning algorithm considers various signals when bidding, including things like device, location, language, and dynamics of the auction. Automated bidding then happens on a CPM and PPC basis for campaigns that use either target CPA or maximize conversion strategies. 

Pay-per-click (PPC) bidding is more cost-effective for the advertiser since they only pay when a user clicks on their ad, versus paying each time a user views their ad.  As a result, PPC costs are often lower (CPMs less than $1), which means you can activate a significant amount of campaign reach at a lower cost. This, in turn, helps you adjust bids to maximize results, and you can save marketing budget by paying lower CPMs overall. 

Bottom Line

Programmatic advertising automates and streamlines the process of buying programmatic display, video, and audio impressions. It also gives you better control over how, where, and when your programmatic ads run so that you can receive data-driven insights to inform how you should best allocate your marketing budget. The more informed you are when allocating your budget, the more likely you are to see a higher ROI from your programmatic media campaigns and therefore increasing overall marketing efficiency for your brand.

To learn more about programmatic media buying, get in touch with the DELVE team today to download our free programmatic advertising comparison guide covering some of the main benefits of leading DSPs such as Google Display Network, The Trade Desk, and Display and Video 360.