A lot of people are talking about (and spending a lot of money on) programmatic advertising. And since there is a lot of confusion about what programmatic advertising is, I thought I’d share the six most important things you need to know before you spend money on it.

1.  First, programmatic advertising is not new. Programmatic advertising is a fancy word for “automated advertising.” The reason it’s not called automated advertising is because automated advertising is full of waste, and often you can’t fix the waste even when you identify it, because everything is automated.

2.  Second, programmatic advertising is very common. You can use Google AdWords to do different types of programmatic advertising, and you can use lots of other systems to do this as well.

3. Third, if you do programmatic advertising, you should still setup conversion tracking. For whatever reason, people think that just because they are doing programmatic advertising, they don’t need to measure results. That is a huge mistake. Since programmatic advertising is simply an automated version of digital advertising, you can still measure results, and if you want to get good results, you’d better not gloss over this fact.

4. Fourth, there is no reason that you can’t mix programmatic advertising with manual or rule-based ads. For many companies, the best strategy is to blend three types of digital advertising: (1) manual bidding and targeting; (2) rule-based bidding and targeting, and (3) programmatic/automated. You use programmatic advertising to cast a wide net and see what performs best; then you use manual bidding and targeting to focus on the strongest elements of your campaign; and finally, you use rule-based bidding and targeting to make the manual elements efficient at scale.

5. Building on point number four, you should know that the biggest single advantage of programmatic advertising is size and speed. If you need to spend millions of dollars in a month, starting from zero, then you will probably need to have some heavy duty programmatic advertising elements to your campaign. And, given your budget, you will also need to be prepared to waste some of those dollars. The key is to setup a strong conversion tracking net so that you see which dollars are wasted, so that you don’t waste them twice. And if you have more modest budgets, or if you have a longer ramp up time, then programmatic is not where you should start your planning.

6.  And finally, as a general rule, programmatic advertising works best for companies that sell low-cost consumer products that have mass appeal. If you are a B2B company or almost any type of services company, it is much better to target by behavior or keyword, because these types of targeting capture buying intent rather than just matching up “like with like,” which is essentially what programmatic advertising is all about.

I hope these six points are helpful to you as decide how to plan your company’s advertising strategy, and if nothing else, I hope they demystify the current buzzword that seems to be dominating the digital advertising industry at the moment.

Will Marlow is a search engine marketing consultant who loves helping high growth companies optimize and improve their PPC results: and he holds seven certifications: Google AdWords Search, Display, Mobile, Shopping, and Video Certification, Google Analytics Certification, as well as certification as a Bing Ads Accredited Professional.

Marketing Certification Badges