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What Are Programmatic Ads?

Flat isometric vector concept of programmatic advertising, social media campaign.

Imagine you’re browsing the internet, shopping for winter boots. You come across a pair that suits your needs, but you decide they’re too expensive and close out the browser to do something else. Suddenly, on the next webpage is an advertisement for an eerily similar type of boot to the ones you were looking at just seconds before! You click the ad, see that they’re less expensive than the others, and hit “Add to Cart.” Now you can cross ‘New Winter Boots’ off your to-do list! 

This is an example of a new type of digital ad-buying that came on the scene just ten years ago, called programmatic advertising. It has completely revolutionized the way people consume, buy, and interact with ads. 

Way way back in the olden days (you know, the mid-90s), it used to be that if a small business owner wanted to get the word out about their products and services digitally, they would have to buy ad space on websites. The introduction of online advertisements changed the game because it opened up a new place to market–it was like watching commercials while browsing your encyclopedia set! But that’s was it; That’s how specific it got. 

With today’s programmatic advertising, a business can cater its ads to the individual click, meaning that every person who visits a webpage sees a different ad customized to their clicking and buying habits. 

Companies can target ads based on location, age, shopping habits, or even lack thereof. For example, boot companies can have their ads appear to consumers who visited their competitor’s website but didn’t purchase anything (which is how you have your swanky, new, inexpensive boots!) 

This ultra-specific targeting is increasingly gaining traction in the advertising realm. In fact, 84.5% of digital ads used in the US are programmatic, and this number is only expected to increase as digital buying becomes more and more commonplace. 

Where Did Programmatic Advertising Come From? 

When the internet first introduced digital advertising, large companies bought ad space directly from the website publisher. However, the internet was rapidly growing, and there became a surplus of space with not enough advertisements to fill it. So, to fix the problem, publisher’s auctioned off their ad space to organizations with a lower budget for digital marketing. Over the years, this evolved into the widely practiced programmatic advertising we use today. 

How Does it Work? 

Programmatic Advertising is most commonly used in three forms: Real-Time Bidding (RTB), Direct Programmatic, and Private Exchange. 

1. Real-Time Bidding (RTB) 

RTB is the most popular form of programmatic advertising ( 90% of programmatic ads use RTB!) 

In order to output the tiny and irresistibly clickable ads that pop up on a webpage, there is a process called an ad exchange that involves two parties: the advertiser and the publisher. 

First, a consumer clicks on a website. While the page is loading, the publisher puts up the ad space for auction, using the Supply-Side Platform (SSP). 

Then, interested advertisers place bids on the space using their Demand-Side Platform (DSP). And just like a standard auction, the highest bidder wins. The only difference between an ad exchange and a classic auction is that an ad exchange takes place in a matter of seconds–it all happens before the website loads.

Within RTB, targeting software allows for super-precise refinements. For example, when you were shopping for winter boots, the advertiser likely targetted someone who lives in a cold climate, wears adult shoes, and previously visited boot websites but didn’t buy anything. Because you check all their boxes, they’re probably willing to spend more on showing you their products, making them: the highest bidder. 

programmatic advertising uses RTB or real-time bidding to buy impressions almost instantaneously.

2. Direct Programmatic 

This is the form of programmatic advertising that most closely resembles advertising’s humble beginnings. Much like a business would take out an ad in the local newspaper, this is where a company would buy guaranteed online ad space. Everyone who opens the page will see the same ad, which allows for lots of impressions but lacks the effectiveness of specific targeting. 

3. Private Exchange 

This is when publishers offer their ad space exclusively to specific companies. Private exchange doesn’t use an ad exchange (no tiny auction) and involves more manual work. 

How Does AdCritter Use Programmatic Advertising?

AdCritter uses native advertisements, which are ads that look and feel like the non-ad content one might see on a given webpage (Think: the covert ads that appear at the top of a google search page.)

adcritter uses programmatic advertising to showcase its own platform

Native ads are ultimately more clickable because they are attractive and versatile. They also avoid giving consumers ad fatigue, or, the feeling you get when you’ve seen too many ads, and you just stop listening (Hello, repetitive streaming commercials). 

In fact, according to OutBrain, consumers click on native ads 53% more than they do typical display ads. Their success, coupled with the breakthroughs of programmatic advertising, RTB, and ultra-specific targeting, can give your business the extra edge it needs to thrive. With AdCritter, you can access all of this using a streamlined platform that takes care of the confusing stuff for you. We know running a small business is challenging, so why not make this part easy with AdCritter.

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