Is programmatic advertising effective for B2B companies in 2022?

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Digital ads on display

The advertising sector has evolved over the years, especially for B2B marketers. In the current day and age, marketers need to look beyond traditional ways to reach, interact, and capture new audiences. This is one of the key reasons programmatic advertising has gained so much attention in recent times, especially in the B2B community. 

Programmatic advertising is one of the most effective ways to reach a larger audience. But what is programmatic advertising and how does it work in the B2B marketing space?

Programmatic advertising remains a huge question mark for many B2B and digital marketers. Rightly so. Programmatic is a new and relatively modern advertising alternative. It is a perfect blend between machine learning, automation, data science, and programmatic ad buying, all of which again, are relatively new concepts. 

While there is a lot of confusion around programmatic advertising, we aim to clear that up for you. In this article, we will explore why programmatic advertising and programmatic marketing are important and why B2B marketers are increasingly showing interest. 

Let’s begin with the basics.  

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What is programmatic advertising?

An online ad space

Programmatic advertising is a systematic algorithmic process of buying and selling ad spaces in real time. For instance, Google Ads and Facebook Ads, two of the most popular advertising platforms on the web are programmatic. 

Every programmatic advertising platform uses complex mathematical formulas to determine the seller’s goals, third-party consumer data, best ad format, bidding preferences, and online behaviour of consumers to curate an effective buying strategy. 

To know more about programmatic advertising services, Schedule a demo .

Programmatic advertising jargons marketers should know

There are a lot of words and terminologies thrown around in the digital advertising and programmatic advertising space. As a marketer, you should know these terms to avoid confusion and thoroughly understand how programmatic advertising works. 

Here are a few important programmatic advertising terms a B2B digital marketer should know in 2022. 

  • Demand side platform (DSP)

A DSP helps marketers automatically purchase digital ad space made accessible by media publishers using ad exchanges. Buyers can target specific audiences based on information including website category, geographic region, age, online habits, and more. In the DSP, the advertiser configures their preferences to target the most relevant and right audience. The software then automatically searches the ad exchange or network for opportunities that match these parameters.

  • Supply-side platform (SSP)

Publishers use SSPs to manage their existing ad space, while marketers use DSPs to manage ad buying. To improve the publisher’s visibility among prospective consumers, an SSP may connect with different advertising exchanges. An SSP enables a publisher to control and manage an ad space inventory more effectively. For example, publishers can set a minimum price for different impressions and define a specific format for buyers. 

  • Ad exchange 

Programmatic bidding takes place on a trading floor known as an ad exchange. As seen in a real auction, once a publisher makes its inventory available for purchase, the ad space will be sold to the highest bidder. The distinction is that B2B advertisers can buy ad space in channels including display, mobile, Connected TV, and more. Further, all the bidding activities are powered by an algorithm, ensuring accuracy and an unbiased bidding system. 

  • Real-time bidding

Real-time bidding in programmatic advertising

Real-time bidding is where the bulk of the action takes place. The automated auction place wherein ads are sold between DSPs and SSPs. During real-time bidding, both, the SSP and the DSP define their parameters in advance. While the DSPs specify the audience they are interested in, SSPs specify the floor price for their inventory. The entire process of finding the right place to display the ad at the right time takes place in a matter of milliseconds when a web page is about to load. 

  • Private marketplace

Contrary to RTB, which is largely an open exchange, a private marketplace offers publishers the choice of selecting advertisers who can buy their ad space. In this scenario, publishers will provide their inventory to a few shortlisted advertisers. 

Is programmatic advertising worth the hype?

Programmatic advertising can ensure that money, time, and other resources are spent optimally. The fact that programmatic advertising is automated and paves the way for customized ad delivery to an audience is one of the key factors why many digital advertisers are investing in it. Nearly 93% of total display advertising spend is directed toward programmatic advertising in the United Kingdom [1]

70% of respondents to the 2020 State of Programmatic Advertising poll said their programmatic efforts were successful in some way [2]. Additionally, 23% said their programmatic efforts were highly successful in attaining their strategic goals. By 2022, it is expected that programmatic ad spending in the UK would have surpassed 9.3 billion (USD) [3].

All these numbers suggest that programmatic advertising is effective and definitely worth the hype. 

What are the advantages of B2B media buying?

Now that you have a basic understanding of how programmatic advertising works, let’s explore the advantages of B2B media buying. 

Programmatic advertising has transformed the advertising world. The hype around programmatic advertising is justified, and the stats don’t lie. One of the main reasons programmatic advertising has become a staple in both, B2B and B2C is because of its high efficiency. Besides, traditional advertising techniques slowed down the speed of buying and selling inventory and are far from efficient compared to programmatic advertising. 

As mentioned earlier, machine learning algorithms drive the entire B2B media buying space, accelerating matching publishers with digital environments. Therefore B2B programmatic advertising is considered one of the easiest and also the most effective ways to display ads to an audience. 

Disadvantages of programmatic advertising

While programmatic advertising provides a host of benefits, there are a few drawbacks. As a marketer, you must know the disadvantages of programmatic advertising as well. 

  • Ad fraud

Fraud in the programmatic advertising space inflicts heavy monetary losses on advertisers. It is crucial to understand that a significant rise in bot traffic over the past few years is another reason advertisers are losing billions of dollars each year. 

  • Brand safety

Brand safety is another disadvantage of programmatic advertising. If algorithms are used without human supervision, your programmatic ads may appear in inappropriate places. For instance, your brand may appear on fraudulent news websites or alongside objectionable (or even fraudulent) content.

Keep an eye on such activities and keep updating your blacklisted (websites that are forbidden) or whitelisted websites (websites that are permitted) to protect your brand safety. you will reach a smaller audience in this case, and you are saving your brand from being linked to controversial content.

  • Lack of fee transparency

The industry’s persistent lack of openness about platform fees is another major problem. In contrast to conventional digital media buying, programmatic advertising has many participants. Ad exchanges, publishers, DPS and SSP providers, agencies, data verification vendors, and so forth are just a few examples. Many of these participants are crucial to the programmatic ecosystem, yet they all also receive a piece of the advertising budget. Only 51% of advertiser spending on the UK programmatic market reached publishers, according to a 2020 transparency study [4]. However, it can be very challenging to understand the fees that each party is collecting.

Determining the success of programmatic ad campaigns

Accurate performance measurement is crucial since programmatic advertising involves different variables. Therefore, involving a trained data scientist in campaign management may be beneficial. The top three most noteworthy programmatic KPIs, according to the 2020 State of Programmatic Advertising survey, were:

  • Returns on ad spend (ROAS)
  • Return on investment (ROI)
  • Click-through conversion (CTC)

Instead of sticking to industry norms, evaluate various metrics to prove which ones are accurate predictors of your unique business objectives. Consider using a range of tactics to get accurate campaign insights.

Does programmatic advertising have a future?

Programmatic advertising is only expected to gain more steam in the upcoming years thanks to new technologies, increasing awareness, and more. In fact, going by the current trends, programmatic marketing or advertising will soon overtake traditional marketing channels including radio, newspapers, and television. 

We believe we have just explored the tip of the iceberg when it comes to programmatic marketing, and there is so much more to learn and discover in the future. This is true, especially because of the growing interest in creating virtual worlds including the metaverse. Brands will have even more opportunities to promote their products on the internet when augmented reality (AR) and virtual reality (VR) become more prominent. 

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Feature Image Source: Photo by Will Francis on Unsplash

Image 1 Source: rawpixel.com

Image 2 Source: Image by Arek Socha from Pixabay

Sources:

[1] Fisher. B (2021) “UK Programmatic Digital Display Advertising Outlook 2021” Insider Intelligence [online] Available from: https://www.insiderintelligence.com/content/uk-programmatic-digital-display-advertising-outlook-2021 [accessed October 2022]

[2] (2020) “THE STATE OF PROGRAMMATIC ADVERTISING STRATEGIES, TACTICS & TRENDS” Ascend [online] Available from: https://ascend2.com/wp-content/uploads/2020/05/Programmatic-Advertising-Survey-Summary-Report-200512.pdf [accessed October 2022]

[3] (2022) “Programmatic advertising in the United Kingdom (UK) – statistics & facts” Statista [online] Available from: https://www.statista.com/topics/6912/programmatic-advertising-in-the-uk/ [accessed October 2022]

[4] (2020) “PROGRAMMATIC SUPPLY CHAIN TRANSPARENCY STUDY” ISBA [online] Available from: https://www.isba.org.uk/system/files?file=media/documents/2020-12/executive-summary-programmatic-supply-chain-transparency-study.pdf [accessed October 2022]

 

 

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Karandeep is a technical content writer based out of Pune, a city in India that is also known as the Oxford of the East. His journey with writing started in 2014 when he decided to try his luck in a gaming startup as a Content Developer. Since then, he has written on a wide range of topics within the gaming and the tech space. Apart from his love for gaming, Karandeep is keeping tabs on the hottest trends in the tech industry. After completing his Bachelors in Business Administration (BBA) from Symbiosis International University, Pune, he worked as an intern in an NGO that focused on urban development.
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