Programmatic & Native Advertising: The Future of Ad Buying

At first, I believed programmatic advertising was going to be really hard to understand, but actually, it’s totally simple. In short, it’s just buying ad space, but taking humans out of the equation. Programmatic advertising is solely done through software and machines, but is the exact same thing as calling up a company and doing it that way. This can’t be done with all types of advertising though, just with digital advertising (which is where most of our advertising is headed anyways). By using this new way to purchase advertising space, it saves a lot of time and money, while improving efficiency. Sitting on the phone with human ad buyers and salespeople has proven to be expensive and even unreliable. Programmatic advertising removes people from the situation, thus making the process much cheaper, improving efficiency, and eliminating any extraneous variables that might make a person not perform their job up to the right standards.

Let me bfea-programmatic-slide1-01-2013reak it down further. Programmatic ad buying is just like buying anything on Amazon or your favorite stores website. It’s strictly done with machines, and only machines. You have a few clicks here and there, and you’re done! No need to deal with people over the phone or in person, making life harder for you. You’re able to get what you want without all the hassle. Now take that, and think of it in the form of buying advertisements! Programmatic gets rid of all the busy paperwork that no one likes in the first place. Originally, buying ads, letting the campaign run, spending money, and then optimizing the campaign took up to a month or longer, and with programmatic, it can all happen in real-time.

So what does programmatic advertising cost? Premium programmatic is commonly sold on a cost per thousand (CPM) basis. Thesforecast-shareofselectdigitaladsalese rates can range from $15 to $25 or even higher depending on the type of advertisement you desire. These premium programmatic advertisements will be shown on homepages. As demand for the use of programmatic advertising increases, so does the price for it. Here is a chart (props to Business Insider!) predicting the share of digital ad sales, showing that non-programmatic sales are decreasing as time goes on. Let me put these percentages into actual dollar amounts so you can see the impact! When RTB (real-time-bidding) is estimated at 33% in 2018, that means $18.2 billion of U.S. ad sales will be towards RTB – up from $3.1 billion in 2013!! This growth is going to be driven by mobile and video advertisements. Companies that are hopping on the programmatic ad bandwagon are reaping the benefits. These businesses include Rubicon Project and AOL.

As with anything new and technological, there are going to be some obstacles necessary to overcome in order to make it the best it can be. First of all, there needs to be a fea-programmatic-slide5-01-2013way to educate advertisers as well as publishers about what this method of buying ad space is, what it does, and where it can take advertising into the future. Another barrier that’s considered a top priority is navigating through a multi-device landscape, being able to go from smartphone, to tablet, to laptop, and back again. According to those that work with programmatic advertising, there just isn’t an easy way to do this – but that’s not to say this can’t be done. There’s also the risk of losing cookies, which are currently essential for advertisers and marketers to help inform them of buying behavior. If these cookies are taken out of the equation, that could pose a problem for agencies and marketers. One more problem with automated placement, is the fact that advertisers don’t want their ads to be shown with content thats low quality or not even relevant, as well as being put next to controversial content. There needs to be a better method of putting ads in the right spaces As for TV ad space buying becoming programmatic…it’s hard to tell what the future holds. Many people are stubbornly against that idea, even though data has shown a 4% increase in programmatic TV ad buying from 2014 to 2015. While that increase may be small, and the total is only in fact 5%, it’s still an increase, which should be given credit!

Next, I’d like to talk about native advertising and what that is. Simply put, native advertising

“is a form of paid media where the ad experience follows the natural form and function of the user experience in which it’s placed.”

native

The rise of native advertising has advertisers now integrating their ads directly into the content. The key word there is integrating; making sure it flows well and matches the actual content that it’s part of. These ads are supposed to have the same look and feel of an editorial piece, and so far, it seems to be working well for advertisers. Native advertising techniques are still new to the game, and it’ll take a long, long time before they ever surpass any other techniques. Here’s why,

  • Tracking the analytics for native advertising has proven to be very difficult because they haven’t matured enough to be at the same standards advertisers expect from other forms of advertising campaigns.
  • Audience targeting isn’t refined enough for native ads to swoop in and take away the ad spend of current forms of digital advertising.
  • Consumers are becoming more aware of native advertising tactics and don’t want to feel the sense of being tricked into reading pieces that are just trying to sell something.

Native advertising has so much hype and controversy surrounding it, that native ads themselves aren’t gaining the brand awareness, it’s the fact that people are talking so much about the technique of native advertising in general. It has all this publicity, but sort of for the wrong reasons. Measuring the ROI for native ads is hard right now, but as this technique becomes more commonplace, it’ll be easier to gather the data needed to check its performance. As the hype dies down, it will be easier to tell if the return on investment is coming from the ad itself, or if it was only coming from publicity.

As for the future of both programmatic and native advertising, I believe they both will be around, and for the long haul. I think programmatic advertising has a bright future, and it will only be a matter of time before TV gets taken over by it. Many people believe this could never happen, but never say never! I’m sure this isn’t the first advertising method that people were skeptical about at first. With native advertising, I believe it will take a while before it becomes a prominent space in a companies ad spend. The hype of native advertising as a topic needs to calm down dramatically before we can understand if it’s even a useful way to advertise in the first place! As more and more “premium” advertisers migrate their ad spend towards digital, I definitely recommend programmatic advertising. It’s not going anywhere and it’s only becoming more and more popular. Over the next few years I predict lots of tweaking will be done in order to overcome the aforementioned obstacles, and it’ll be hard to find a reason not to spend money with programmatic advertising. As for native, I still recommend it because just like programmatic, it’s not going anywhere; but i also recommend waiting a while for the hype to die down and then evaluate if it’s worth it to invest in.

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Paid Search…aka Search Engine Marketing

In a nutshell, there are 2 different types of search engine marketing (SEM), organic, and paid. Organic search engine marketing is made up of the natural, unpaid search engine algorithms. Paid search engine marketing is the exact opposite, meaning your company will pay the search engine to have your website displayed on the results page. The rate you pay is most commonly determined by how often your advertisement is clicked on or viewed. These paid SEM ads are displayed in a ‘sponsored’ section on the search engine, therefore thats how you know they’re different from the organic searches. In a study done by HubSpot, 70% of links that are clicked on are organic, while only 30% of links clicked on are paid.

That statistic might make you believe that it’s a waste of time and money to deal with paid SEM, but it’s not! Say your website isn’t ranking well among your competition and among the right keywords, paid search engine marketing is a great way to buy yourself to the top so get noticed. A big mistake that – usually small – businesses will make with paid SEM is that they think that’s all they have to do and they’re done. Rather, they should be using paid SEM as a way to have a better online presence, while still working at their search engine optimization, and ranking higher in organic searches. Search engine marketing should never replace other marketing efforts, it should instead amplify your marketing efforts to give your company a better internet presence.

Here are a few great ways that paid search can help your business:

  1. Landing Page Testing: by having your website link in a sponsored section of a search engine, you can test 2 different landing pages, say 2 separate offers, or you can test the same offer on 2 different landing pages. The latter is a form of A/B testing, and by sending users to 2 different landing pages, with 2 different layouts, but with the exact same offer, you can see which page will result in more conversions.
  2. Finding New Keywords: Through the help of Google Adwords, you can generate a “Search Terms Report” that will show you all the keywords for which your ad was displayed to the user. This report will also give you the performance of each keyword, meaning those keywords that rank high should be added to your campaign, while those that rank low should be reconsidered. The keywords shown in the results are the keywords that users are actually putting into the Google search bar – so they are extremely crucial to your search engine marketing campaign. This report will also show the number of clicks, percentage conversion rate, and how much that keyword will cost to add to your campaign.
  3. Getting in the Game: This is the same as saying you need to know your competition and know how you rank among them. Get yourself in the game, and utilize all keywords that you can, no matter how broad, as long as they are still relevant in order to rank among your competition.

Paid search engine marketing doesn’t work alone, so you need to use it along with other inbound marketing efforts. Maximizing your coverage on a search engine results page is a great goal for your company, and you can do that through organic and paid search engine marketing. What’s great is when you have organic AND paid search results on the same page instead of different pages. Being able to establish your company as a leader is an amazing goal to have and to reach, and a combination of organic and paid SEM can get you there.

Like I’ve mentioned before, the 3 main components of successful paid search engine marketing includes keywords, ads, and landing pages. You need to make sure you match all of these, keep them consistent with one another, and optimize them all to the best that you can. The right keywords will take users to a results page containing your ads, and when they click on those ads they will be taken to your landing pages. Paid SEM doesn’t work without these 3 requirements.

When running a paid search engine marketing campaign, the most common way to pay for this is through pay-per-click, or PPC. Pay-per-click is a much more cost effective method as opposed to pay per thousand impressions (CPM). The only reason you’d want to use CPM over PPC is to just increase your brand awareness and increase your share of voice. However, when you’re actually trying to make conversions, PPC is your best bet to save money and have the campaign matter. Through PPC, you only pay Google for the advertisement when your ad is actually clicked on (not just when it’s seen or when a mouse has scrolled over it). You could have 100,000 people see your ad on their results page in one day, and if only 10 people clicked on it, you only have to pay for those 10 instead of the 100,000 who saw it. This payment method will save you lots of money. And who doesn’t like saving money whenever they can?

The actual cost of paying per click through Google is based on an auction style method. You have the highest bidder all the way down to the lowest bidder. The highest bid (let’s say $6) accounts for the top, most visible spot, while the lowest bid (let’s say $3) accounts for the lowest, least visible spot. The bids in between follow the correct ranking in order. This isn’t the actual price per spot though. Instead, Google takes the lowest bid, and still puts that for the lowest, least visible spot… but then increases each next highest level spot by an incremental amount (say $0.20). This means, if there are 5 spots, the 5th spot would be $3, the 4th spot would be $3.20, the 3rd $3.40, 2nd $3.60, and finally the 1st spot would be $3.80, even though the original bidder said they’d be willing to pay $6.00 per click.

A quality score is another way that Google makes sure you aren’t just buying irrelevant keywords that have little to nothing to do with your landing pages. The quality score, rated from low to high quality, will analyze how closely the keywords you pay for match your advertisement, and how closely your advertisement matches your landing pages, and give it a rating. This method ensures that companies in a completely different field aren’t bidding high to show up on results pages that are completely irrelevant to the search. The way bidding and quality scores can work together is if you bid higher but have a lower score compared to someone who bid lower and has a higher score, the company with a higher score will get the top position because their ad is more relevant to the search query.

Here are 3 different types of keyword matching:

  1. Exact Match: your ad will only be displayed if the search query includes the exact keyword(s) with words in the exact order.
  2. Phrase Match: your ad will be displayed if the search query includes the same order of words, but may also contain additional words.
  3. Broad Match: your ad will be displayed if the search query includes any or some combination of the words in your keyword, in any given order.

To ensure that costs don’t get too high through your PPC campaign, you want to set a daily budget for how much you will spend. You can tell Google how much you want them to spend each day per ad, and they won’t exceed that limit. You can come up with different budgets for different ads as well! Also, to guarantee all your advertisement expenditure isn’t spent up in just a couple hours, you can ask Google to spread your spending out as the day goes on. Google might also not be able to spend the total amount you give it per day even though they will definitely try. In order to get as close as Google can to spending your daily budget, you must have effective keywords and an effective ad copy. When you create your ad, you are given character limits per line. 25 characters allotted to the title of your advertisement, 37 for the display URL, 35 for your first description, and another 35 for the second.

Just like all other digital marketing methods, you’re able to measure your paid search engine marketing through various metrics. Here are the 4 you can use:

  1. Impressions: one single instance when your ad is displayed through a user typing your keyword into their query.
  2. Clicks: an instance when  viewer actually clicks on your advertisement when it’s been displayed on their results page.
  3. Conversions: this is an instance when a viewer saw your ad, clicked on it, then took the action that you intended them to take when they were brought to your landing page.
  4. Spend: the amount of money you have spent on your campaign so far.

These 4 metrics can help you understand where you might be going wrong in your ad campaign, and where you’re going right. It’s natural that the number of impressions is higher than clicks, and number of clicks higher than conversions. But something important to remember is the higher your percentage metrics (impressions, clicks, conversion) and the lower your cost metrics, the better your ad campaign is performing!

Wordstream has made a great article (not to mention it includes a rad infographic) detailing Pay-Per-Click Marketing as well as an article about What Kinds of Businesses Should Use PPC (with an even cooler infographic), and here are 5 Pay-Per-Click Mistakes That Can Cost You Money!