Programmatic Advertising Fundamentals PDF

CONFIDENTIAL & RESTRICTED Programmatic Advertising Fundamentals Session 12 Guest: Alyona Dvornikova CONFIDENTIAL & RESTRICTED Couple of words about me Digital marketing enthusiast, speaker (DES 2022, Programmatic Spain, eShow, SemRush meet ups) with more than 10 years of professional experience in e...

CONFIDENTIAL & RESTRICTED Programmatic Advertising Fundamentals Session 12 Guest: Alyona Dvornikova CONFIDENTIAL & RESTRICTED Couple of words about me Digital marketing enthusiast, speaker (DES 2022, Programmatic Spain, eShow, SemRush meet ups) with more than 10 years of professional experience in ecommerce and digital media. During the years, I was developing my career path in airline business leading content (from UX and SEO perspective) and paid media strategy (Search, Programmatic and Social). Later on, I was continuing to develop my digital skills and share my expertise in a financial sector, in particular, in American Express. Currently, I am leading digital paid media team in an FMCG Beam Suntory, being the responsible for all paid media plans and its implementation for all the steps of the funnel for EMEA and SA. Alyona Dvornikova LinkedIn: https://www.linkedin.com/in/alyona-dvornikova/ Email: [email protected] Agenda 1. Programmatic Buying Intro & Evolution 2. Programmatic Key Components 3. Programmatic Buying Models 4. Programmatic Audience Segmentation 5. Programmatic Advertising: Formats 6. Conclusions & Summary 7. Questions CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Programmatic Advertising Intro and Evolution CONFIDENTIAL & RESTRICTED What is Programmatic Advertising? Programmatic advertising is a term that refers to the automated buying and selling of advertising space on the internet. Programmatic advertising is a process that automates the buying and selling of digital advertising inventory across various platforms, including websites, mobile apps, video, and social media. It utilizes sophisticated algorithms and technology to match advertisers with relevant audiences and display ads on appropriate placements in real-time. CONFIDENTIAL & RESTRICTED Dec’20 CONFIDENTIAL & RESTRICTED Advertising Buying Evolution Early Days: Direct Sales and Relationships (Pre-internet) Advertisers negotiated directly with publishers of newspapers, magazines, TV stations, and radio stations. Deals were often one-off and based on broad demographics like age and location. Measurement relied on estimates and surveys, offering limited insights into ad effectiveness. CONFIDENTIAL & RESTRICTED Advertising Buying Evolution The Dawn of Digital: Banner Ads and Portals (1990s-2000s) 1994: The first banner ads appeared on the website of HotWired, a digital magazine 1995: The concept of ad networks emerged, allowing advertisers to buy ad space across multiple websites. 1996: The first interactive banner ads were introduced, allowing users to engage with the ad. 1998: The rise of search engine marketing (SEM) led to a shift in focus from display ads to search ads. Popup ad in the 90s Banner Ads in the 90S Advertising Buying Evolution CONFIDENTIAL & RESTRICTED Targeting and Programmatic Advertising (2000s-2010s) Sophisticated targeting options based on demographics, interests, and online behavior emerged. Programmatic buying platforms enabled automated ad purchases based on specific criteria, optimizing campaigns. Data-driven marketing became the norm, with analytics providing deeper insights into campaign performance. The Age of Multi-Channel and Personalization (2010s-present) Mobile advertising exploded, offering new spaces like in-app and social media ads. Personalized advertising leverages individual data to deliver highly targeted and relevant ad experiences. Privacy concerns and regulations are shaping the future of data-driven advertising. CONFIDENTIAL & RESTRICTED Nov’20 Oct-Nov’21 CONFIDENTIAL & RESTRICTED Key Characteristics of Programmatic Advertising CONFIDENTIAL & RESTRICTED Automation Programmatic advertising eliminates manual processes, streamlining the ad buying and selling process. Targeting Transparency Advertisers can target specific audiences based on demographics, interests, behaviors, and other factors. Data-driven targeting ensures ads reach the right audience at the right time. Programmatic advertising provides detailed reports and data insights for both advertisers and publishers. Real-time Optimization Through bidding, we can adjust our strategies to achieve the objectives that best suit our strategies and businesses, giving us the possibility of real-time optimization. Scalability & Creatives Programmatic provides an access to target audience among a vast volume of available Inventory through multiple creative formats, with the ability to negotiate agreements with a large list of publisher/media Groups. CONFIDENTIAL & RESTRICTED Key Components of Programmatic Advertising Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Key Components of Programmatic Advertising Ad Server Advertisers use ad servers to control the placement and timing of their ads. Publishers use ad servers to deliver ads to their websites and mobile apps. Ad Server An ad server is a software platform that manages the delivery and tracking of online advertising. Ad servers are used by both publishers and advertisers to manage their digital advertising campaigns. Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED Trading Desk Trading Desk A trading desk (ATD) is a specialized team within an advertising agency that manages and optimizes programmatic advertising campaigns. ATDs use a combination of technology and expertise to help advertisers buy and place ads across a wide range of digital channels. Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED DSP- Demand Side Platform Demand-Side Platform (DSP) It is a software platform used by advertisers and agencies to manage and automate the buying of advertising space across various digital channels. Think of it as the buyer's side of the equation in programmatic advertising. Central access to publishers, networks; targeting control; brand protection (white list), bidding & budgeting. Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED SSP- Supply Side Platform Supply Side Platform (SSP) It is a software platform used by publishers to sell advertising. An SSP is a platform that brings together a large number of digital publishers who make their advertising spaces available. Automatic optimization, Buyer connection (DSPs etc), integrated data and segmentation into its inventory, price control, block advertisers etc. Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED Ad Exchange Ad exchange It is a marketplace where publishers can sell their ad inventory to advertisers. Ad exchanges connect publishers and advertisers in real time, allowing them to auction off ad impressions in a competitive environment. Key Components of Programmatic Advertising CONFIDENTIAL & RESTRICTED DMP – Data Management Platform Consists of 1st party data from another company (typically a partner brand own audience. It includes company). These data are either sold to information like website visits, app us or shared with us for the mutual usage, purchases, email benefit of signups, social media interactions. both parties. Data you collected directly from This is data you purchase from a data aggregator who collects information from various sources like websites, apps, and offline sources) DMP It gathers data from various sources and makes the organized data available to both DSPs and SSPs. Key Components of Programmatic Advertising Ad Verification Tools CONFIDENTIAL & RESTRICTED Ad Verification tools are tools that measure the quality of media inventory. Traffic Verification: identify and filter out fraudulent traffic, like bots and click farms, that generate fake impressions or clicks. Viewability Measurement: assess whether the ad was actually seen by a human user in a viewable area of the page. Placement Verification: confirmation if the ad is shown on the websites and in the locations which the advertiser specified, preventing unauthorized placements. Brand Safety Screening: analysis of the content of the website where the ad appears, ensuring it aligns with brand and is not associated with harmful or inappropriate content. Fraud Detection: identify and flag suspicious activities like malware insertion, domain spoofing, and ad injection. Relevant metrics in Programmatic Advertising Buying model in DSP is CPM (cost per thousand impressions) KPIs OBJECTIVES To reach new users to gain brand awareness, enhance perception and visibility. Increasing traffic and engagement. Generating a higher volume of sales and leads (ex. Sign ups etc) Cross-selling products or services to foster loyalty. CONFIDENTIAL & RESTRICTED Relevant metrics in Programmatic Advertising CONFIDENTIAL & RESTRICTED Viewability is defined by the as the minimum amount of time and space that an ad must occupy on the screen to be considered viewable. For display ads: at least 50% of the ad pixels must be in view for at least one second. For video ads: the at least 50% of the ad pixels must be in view for at least two seconds, and the video must start playing. 1. 2. 3. 4. Why Viewability is important? To ensure that ads are reaching the target audience and not wasted on nonviewable impressions. To evaluate the quality and performance of your ad inventory, publishers, and placements. To improve ad creative and design to make it more engaging and relevant for the users. To align campaign objectives and budgets with viewability goals and expectations. Obstacles of Viewability 1. It is not a standardized or consistent metric across different tools and platforms, 2. It does not necessarily reflect the impact or effectiveness of the ads, as it does not measure other factors such as attention, engagement, recall, or conversion. 3.It can be affected by various external factors, such as user behavior, device type, browser settings, or ad fraud. 4. It can be costly and complex to measure and optimize, as it may require additional resources, tools, and expertise. CONFIDENTIAL & RESTRICTED Programmatic Buying Models Buying models in Programmatic Advertising CONFIDENTIAL & RESTRICTED Real Time Bidding (RTB)/Open Auction. The bid is optimized based on objectives; it is more cost-effective, ideal for reaching many users (prospecting). Floor Price – is the minimum acceptable price a publisher is willing to accept for an individual ad impression sold through real-time bidding (RTB) auctions. The bids lower the floor prices are rejected. Two bidding models: Second Price: the highest bidder wins the impression, but they only pay the amount of the secondhighest bid plus one cent. First Price: The highest bidder wins the impression and pays the exact amount they bid. Buying models in Programmatic Advertising CONFIDENTIAL & RESTRICTED Private auction/Private Marketplace Instead of an open bidding process, publishers invite specific, pre-selected advertisers to participate in the auction for their ad inventory. This list can be based on factors like advertiser performance, audience targeting needs, or budget size. The winning bidder pays the agreed-upon price for the ad impression. Advantages for publishers & advertisers: Brand safety: Ability to choose reputable and aligned advertisers who fit brand preferences. More control over targeting: Can tailor ad placements to specific audience segments desired by chosen advertisers. Reduced competition: Less competition can lead to winning bids at lower prices compared to open auctions. Guaranteed access to premium inventory: Secure placement in valuable ad spaces not available in open auctions. Tailored targeting: Reach highly relevant audiences aligned with specific campaign goals. Buying models in Programmatic Advertising CONFIDENTIAL & RESTRICTED Preferred Deals: a negotiated agreement between a publisher and an advertiser for specific ad inventory at pre-set prices, but not guaranteed impressions. The advertiser gets first-look access to the agreed-upon inventory before it enters the open RTB auction. If the advertiser doesn't accept the impression at the set price, it goes into the open auction for other bidders. Benefits for Advertisers: Improved targeting: Aligned with specific audience segments through negotiation with the publisher. Brand safety: Partner with trusted publishers to ensure brand alignment and ad placement quality. Increased control: More control over pricing and targeting compared to open auctions. Disadvantages for Advertisers: Less control than guaranteed deals: Don't have guaranteed access to all impressions. Competition from open auction: Impressions might go to other bidders if not purchased at the set price. Buying models in Programmatic Advertising CONFIDENTIAL & RESTRICTED Programmatic Guaranteed: this is the most similar programmatic buying method to traditional buying. You cannot optimize it once it's activated. Private agreements between publishers and advertisers for specific ad inventory at a fixed price and volume. Publishers: Secure upfront revenue and fill rate for a specific ad unit. Advertisers: Guaranteed access to desired ad space with precise targeting and control over pricing. How it Works: Negotiation: Publisher and advertiser negotiate terms like price, volume, targeting criteria, and campaign duration. Agreement: Upon agreement, a deal is established through the chosen platform (e.g., DSP, SSP). Delivery: Impressions are delivered as per the agreed volume and targeting parameters. Buying models in Programmatic Advertising CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Audience Segmentation & Targeting Audience targeting in Programmatic Advertising CONFIDENTIAL & RESTRICTED CUSTOM AUDIENCE (RETARGETING) 1ST PARTY DATA (pixel based) Example: Our website visitors. Visitors and purchasers last 180 days. Visitors and not purchasers Purchasers 1ST PARTY DATA (internal sources Example: CRM database (members of loyalty programme) CDP data Similar/Lookalike audiences Example: It is generated from brand 1st Party Audiences which purpose is to find people who share characteristics with an existing audience. Audience targeting in Programmatic Advertising CONFIDENTIAL & RESTRICTED PROSPECTING AUDIENCES Demographic & LifeSTEvents 1 PARTY Audience DATA (pixel based) Reaching audiences based on their individual demographic Identity. Google Data Affinity AudiencesST Similar Audiences 1 PARTY DATA Reaching audiences based on their specific interests as they browse the Web. (pixel based) Reach audiences based that share the interest profiles of existing customers. In-Market Audiences 1ST PARTY DATA (pixel based) Reach audiences based on their intent to purchase specific categories online. Contextual Audiences Deliver ads on websites that are contextually relevant to the Brand. Audience targeting in Programmatic Advertising PROSPECTING AUDIENCES Demographic & Life Events Audience Combine elements of both geographic and psychographic segmentation, like income, age, gender, family size, parental status (single, married etc). 1ST PARTY DATA Life Events Audience is based on important life milestones, like graduating (pixel based) from college, moving homes, or getting married. By understanding when these moments are taking place, you can tailor your advertising to reach the right users with the right messages. Ex. Targeting young professionals living in urban areas with ads for ecofriendly clothing brands. CONFIDENTIAL & RESTRICTED Audience targeting in Programmatic Advertising PROSPECTING AUDIENCES Contextual targeting 1 targeting PARTYaudiences DATA allow to place ads on websites and apps Contextual that are relevant the specific content users are engaging with, rather (pixel to based) than solely relying on their broader demographics or interests. Focus on content: Ads are displayed based on the themes, keywords, and overall context of the webpage or app, ensuring greater relevance to the user's current interest. ST Ex. Promote travel deals on travel blogs, advertise workout equipment near fitness articles etc. CONFIDENTIAL & RESTRICTED Audience targeting in Programmatic Advertising PROSPECTING AUDIENCES Affinity and Custom Affinity groups of people categorized based on their specific interests as 1STDefined PARTY DATA they browse pages across the web. (pixel based) Users who have an interest or affinity for a specific service or product. "Auto enthusiasts," "Luxury travelers," "Tech early adopters," and "Pet owners.“ Users who have an interest or affinity for a specific service or product. CONFIDENTIAL & RESTRICTED Audience targeting in Programmatic Advertising PROSPECTING AUDIENCES Similar Audiences ST PARTY DATA 1 Reach people who share the interest profiles of existing (pixel based) Audiences combines 1P customers. Similar/Lookalike Audiences data, Google Rich Audiences data and the Similarity Modeling algorithm to create a custom audience of users who are likely to engage, click and convert with your ads. Ex. Targeting similar users who are similar to our frequent flyers to South America. Conversion CONFIDENTIAL & RESTRICTED Audience targeting in Programmatic Advertising PROSPECTING AUDIENCES Conversion In-Market Audience ST PARTY DATA 1Audiences based on users 'purchase intent. Segments of potential customers (pixel actively based)researching or considering purchasing specific products or services. Search queries related to those products or services (buy a wedding dress) Websites and apps they visit (e.g., product comparison sites, review platforms). Content they engage with (e.g., articles about buying guides, tutorials). Purchase history (if available). CONFIDENTIAL & RESTRICTED Audience targeting for the different steps of the funnel CONFIDENTIAL & RESTRICTED Conversion Demographics (Gender and age) Life Events (Parents) AWARENESS CONSIDERATION 1ST PARTY DATA Affinity Audiences (Interested in luxury products) Custom Affinity (Interested in vacations on luxury boat ) (pixel based) PURCHASE LOYALTY In-Market Audiences (Users interested in luxury vacations in Mediterranean sea on the boat ) Custom Intent (Users that have searched for “luxury boat renting in Europe ”) Similar Audiences (Users similar to our visitors) Remarketing (Users that have visited our landing page) CONFIDENTIAL & RESTRICTED Programmatic Advertising: Creative Formats Programmatic advertising: formats Standard display: conventional formats - Standard banners 300*250 300*600, 468*60 - Mega banner: 980*90,728*90,320*50 - Half banner: 234*60 - Billboard: 980*250 - Skyscraper: 120*600 Conversion CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Standard display: conventional formats Conversion CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Standard display: conventional formats Conversion 1 Megabanner; 2 lateral skyscrapers, vertical banner (optional) Brand day/Brand Week is a format inside display where all the advertising spaces of the published are exclusively booked by one brand during a certain period of time. Usually, this format is used for new products launches, temporary promos or any other Branding activity. CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Rich media Rich media is an ad that includes advanced features like video,Conversion audio, or other elements that encourage viewers to interact and engage with the content by touching, dragging, scratching, swiping, spinning, playing a game, watching a video, and more. Types of Rich Media: Dynamic ads. Ex: product feed ads (showing current best offers). Interstitial ads are interactive full-screen ads that cover the entire screen of their host app or website. Video ads Gamification ads Floating ads. A floating ad usually covers a small portion of the site’s content and can be made in different formats, such as previously mentioned video or gamification ads. CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Rich media Higher engagement rate. Better visibility. The variety of rich media ad types allows brands to stand out with their ads and achieve nearly 100% visibility, e.g., using floating banners. CONFIDENTIAL & RESTRICTED Conversion Reduced banner blindness. Banner blindness is a phenomenon when visitors subconsciously (or not) ignore any banner-like information on the internet. Multiple performance: engagement rate, reach, display time, interaction and dwell times etc Programmatic advertising: formats Video ads: In Stream Conversion In-stream ads are brief video ads that seamlessly play within other video content on platforms. Placement: Pre-roll: Play before the main video starts. Mid-roll: Play during the main video at designated intervals. Post-roll: Play after the main video finishes. CONFIDENTIAL & RESTRICTED Programmatic advertising: formats CONFIDENTIAL & RESTRICTED Video ads: In Stream Conversion Bumper ads Videos of short duration up to 6 seconds and they appear before, in the middle or after another video. Users can’t skip these ads. Non-skippable Video ads which cannot be skipped. Up to 15 seconds. Skippable ads Video ads which allow them to be skipped after five seconds. CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Video ads: In Stream Conversion Video will play after ad” CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Vide ads: Out stream Conversion Outstream video ads, also sometimes called inread or native video ads, are a type of online video advertising format that appears outside of traditional video players. Outstream ads blend seamlessly with surrounding editorial content, typically on websites or social media platforms. In -content Programmatic advertising: formats Vide ads: Out stream CONFIDENTIAL & RESTRICTED Conversion In -Banner In -Text Programmatic advertising: formats Native ads Native advertising is a form of paid advertising in which the ads match the look, feel and function of the media format where they appear. They fit “natively” and seamlessly on the web page. Promoted articles on news websites: These articles look and feel like regular news articles, but they are sponsored by a brand. Sponsored content on social media: These posts look like regular social media posts, but they are paid for by a brand. Native ads in search results: These ads appear at the top of search results pages and look like regular search results, but they are sponsored by a brand. In-feed native ads: These ads appear in the feed of content like news articles or social media posts and are designed to blend seamlessly with the surrounding content. Conversion CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Native ads Conversion CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Native ads Conversion Sponsored content Sponsored article Programmatic advertising: formats Native ads Conversion Sponsored content Mobile Native Ads CONFIDENTIAL & RESTRICTED Programmatic advertising: formats Audio ads Conversion Audio Programmatic employs the same buying and selling principles. This includes advertisements on music streaming platforms, podcasts, internet radio, and any other digital audio channel. Ad pods: “slots” for one or more audio ads in the content. Ads in audio can appear as pre-roll (before the content) and mid-roll (incontent), each offering specific advantages. CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Summary and Conclusions CONFIDENTIAL & RESTRICTED Conclusions and Summary Step 1. Define goals and objectives What do we want to achieve with your campaign? Brand awareness, generate leads, or drive sales? Who is our target audience? Clearly defining your ideal customer is crucial for effective targeting. Define the target audiences based in the objectives and step of the funnel. What is your budget for the campaign? Step 2. Brief the agency Conversion Platinum Metal Card American Express Objective: Brand Awareness & Consideration in Spain Target Audience: High Spenders and luxury lovers Budget: 100.000 euros CONFIDENTIAL & RESTRICTED Conclusions and Summary Step 3. Choose your programmatic platforms Conversion Based on campaign objectives and goals, together with the agency decide on Demand-Side Platforms (DSPs) which is suitable for your campaign Consider factors like your campaign goals, budget, and desired level of Preferred deal control when selecting a platform. Think of additional inventory techs needed for specific inventory Private Auction Decide on buying model together with the agency and ask for the media forecast (CPM, impressions, viewability, CTR etc) Partner for native and rich media ads Step 4. Develop your creative assets Depending on the ad formats you choose, you'll need high-quality visuals, engaging copy, and clear calls to action. Ensure your creatives are tailored to your target audience and aligned with your campaign goals. KPIs: Impressions, Viewability, engagement rate, CTR Conclusions and Summary Step 5. Set up targeting & bidding strategy Based on the campaign objectives, decide on audience targeting and data providers (DMPs, CDPs, CRM) Together with the agency define the bidding strategies based on campaign objectives Step 6. Remember about Brand Safety Monitoring of Fraud, white lists, black lists. Step 7. Campaign launch and monitoring, results tracking Track key metrics and insights gained to optimize your targeting, bidding strategy, and creatives for better results. Use insights to inform future programmatic advertising efforts and refine your approach. CONFIDENTIAL & RESTRICTED Segmentation: Demographic & Lifestyle: male & female + 35 y.o; top Conversion management positions, CEO, general managers. Affinity: luxury travelers, high spenders, gourmet lovers. In-market: luxury cars purchasers etc. Similar audiences: current platinum card members. DMP CDP Ad Verification In stream video ads: nonskippable and bumper Outstream video ads: In text Rich media & Native ads CONFIDENTIAL & RESTRICTED Questions CONFIDENTIAL & RESTRICTED CONFIDENTIAL & RESTRICTED Appendix Programmatic simplified ecosystem Conversion CONFIDENTIAL & RESTRICTED Appendix Programmatic simplified ecosystem Conversion