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What is Programmatic Advertising?

Date01 Feb, 2023
Type Advertising, Media
Author Flipp Advertising

Programmatic advertising is a term we throw around a lot as marketers, but is a highly misunderstood offering. If you’ve ever found yourself nodding your head along but actually wondering “what exactly do they mean by programmatic?”, then this article is for you.

Let’s start with the basics. What does programmatic actually mean in the context of advertising? Programmatic refers to the way that the ads placements are searched for, selected and purchased. Rather than chosen one-by-one by an individual, programmatic ads use an automated system powered by AI technology and machine learning to choose the best inventory based on the information that you provide. Although it is an automated process, it’s still overseen by a digital marketing expert to ensure that it is being fed the right information and that the selections are a good fit and are producing results. 

There are many benefits to using programmatic advertising in your media planning, but also things to watch out for. 


The Benefits


Cost effective:

The process of programmatic advertising is very efficient compared to human-to-human negotiations for ad space, making your advertising dollars go much further. Coupled with the fact that what you end up spending is based on performance (often measured as CPM, which is the cost of a human (or humans) viewing an ad 1000 times), you can rest assured that your ad dollars won’t be wasted. In fact, it has been shown that programmatic advertising can help marketers stretch ad budgets 10 to 20 times further than non-automated advertising. 


Highly segmented targeting available:

Prior to programmatic being available, marketers had to purchase ads on a per site basis.  This method is far more accessible and efficient. There are literally 1,000’s of ways to target your audience using programmatic data, the most common being by audience interests and behaviours, or location-based targeting. However, you can get much more granular. For example, if you know that your ads will perform best on Wednesdays at noon – you can use a strategy called dayparting to ensure that is when they are shown.  


Multiple publishers:

Another great aspect of programmatic advertising is the amount of publishers available. This allows you to choose the right publisher/vendor based on your specific strategy. Once you’ve outlined your goals, audience, budget, and preferred channels, you’ll have many inventory options to choose from. 



The nature of these ads also mean they are easy to turn on and off as needed. If budget fluctuations, market conditions, or changes in messaging are a concern within your campaign strategy, then investing in programmatic could be a great option vs investing heavily in something less flexible like traditional out-of-home advertising. 


The Draw Backs


Brand safety issues:

Since the ads placements are being selected using AI, rather than individually by a person, there is less control when it comes to what else is on the page where your ads are being shown. However, there are some ways to protect your brand by specifying topics you do not want your brand to be associated with. You can also ensure that your ads aren’t shown on your competitor’s site, for example. 


Inventory can be low grade: 

Depending on the publisher you choose and the targeting you set, your ads could also appear on sites that have low impressions and/or audience numbers. 


Viewability issues: 

Similarly to brand safety and inventory issues, viewability could be a concern for certain ad placements. Viewability refers to the amount of the ad that is actually viewable (can be seen) by the user. This is measured in terms of the percentage of your ad that is shown. The higher the percentage, the more of your ad that is visible on average. If your call to action is cut off, or your logo, or another important aspect of your creative isn’t viewable, it can have a big impact on your overall messaging and impact. 



With so many programmatic vendors out there, there are some great ones but there are also some duds. You could be buying from a low standard vendor who buys their own traffic with bots. To avoid this, we recommend working with an agency with media capabilities to help direct your media strategy and planning. 


Programmatic Media Channels


Now that you understand the basics, you may be asking yourself “are programmatic ad buys only available for online display ads?”. The short answer is no, programmatic ad buys are basically available for any placement that is “digital”. There are many channels that are available through programmatic vendors including video, connected TV, digital audio like Spotify and podcasts, and digital out-of-home. Connected TV (CTV) in particular is seeing huge growth in the industry, with the boom in streaming services offering ad placements. In the U.S., July 2022 was the first month that streaming’s share of total TV time surpassed cable TV. The overall media investment in CTV is expected to reach 14.4% in 2023, with 92% of U.S households reachable via CTV (up 11% year over year).


Some programmatic vendors will offer their services across multiple platforms. This is especially helpful, as you can control how many times your audience has seen your ad across different channels and helps to streamline your programmatic ad buy (sometimes leading to cost savings). This is called having an ‘omni-channel offering’. 


When it comes to vendors, you are probably most familiar with the Google display network.  However, there are many others! Each vendor has a niche and specialty, whether it’s their audience targeting, their inventory, the type of creative they can run, or the markets they have the best penetration in. Also, when it comes to restricted content (cannabis or liquor for example) certain vendors have limitations on running campaigns for these industries, while others specialize in serving these markets. At Flipp, we recommend programmatic vendors to our clients based on many factors outlined in their media strategy, including the campaign goals, target audience, creative limitations, market, and budget. 


Is Programmatic Right For You? 


Programmatic advertising could be a great addition to your media strategy. Flipp us an email to chat more about your upcoming media goals and how we can help create and execute a strategy that delivers.