Programmatic explained for contextual ad adepts

21 November 2017

Those, who know the theory of programmatic buying, still have the questions as to its practical value. The specialists that switch from contextual to programmatic advertising doubt its real potential. Let’s take a look at the results programmatic can bring you.

How is CPC different for programmatic and contextual advertising?

Contextual advertising is based on an existent demand. A user gets a specific ad after a specific search request. Clicks mean that buyers found what they were looking for.

Programmatic media buying serves a higher level of sales funnel. It’s mostly aimed at brand awareness and forming the demand. A user can click on a banner even with no intention to buy something, just because the offer seems interesting. Up to 40% of conversions from programmatic campaigns happen 2 weeks later after a user first comes to the site.

Impressions are just as important as clicks. While users are reading the resources of their choice, the relevant content linked to the interests is in the view. This helps build a positive association with the brand and pushes to choosing it in the future. Thus, any contact with a user is valuable and it’s cheaper in comparison to contextual ads.

Do we always pay for clicks? Can we pay for actions that happen on the site?

CPM is the main payment scheme. Programmatic ad platform has to pay to SSP, DSP and DMP by CPM. The same principle applies to customers to make the whole chain clear.

A platform can agree with an advertiser on the minimum number of clicks. But any CPC or CPA calculations will be used for estimations only.

What about banner blindness?

Banner ads hold the main share of programmatic. That’s because the technology started with them. But now we have young and promising formats – video and native advertising.

If you don’t have enough resources for video production, native ads are available for everyone. They consist of the same basic elements: image, text, title. Their main difference is they resemble the original content. For example, native ads can get into the gallery of blog posts. They get more trust, as they fit into the functional site’s elements.

How can we be sure, our ads will be seen by anyone?

You can use the specially designed formats. These are the fullscreen or non-skippable video ads. They are highly effective, but they are not available on each platform, which makes them more expensive.

You also have the viewability metric at your disposal. You can get the info on the threshold of viewability for your ads. 50–60% is a nice number. It’s an estimated value and you can get actual 70% views. And if you set a higher threshold, you might cut off 90% of your potential views.

What Conversion Rate can we get?

The expected value should be calculated as based on the specific client’s stats. Each programmatic agency has its accumulated data on the median values. But conversions depend on such factors, as:

  • how attractive is an advertiser’s offer,
  • if an ad and a landing page match together,
  • how convenient is your site’s interface,
  • intuitiveness of user interface – how easy is it to make a purchase.

Programmatic buying is not overly complicated. When you know how to set it up, it can be more effective than the usual contextual tools.

Don’t expect your CR to jump or your CPC to drop in an instant. But you should definitely give a try to programmatic.

Wide reach and precise targeting let you find an audience, wherever it is. Add a good creative to the mix, and here’s your loyal audience for the future demand.

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