Programmatic vs. Display Advertising: Which Is Best for Your Business?

Programmatic vs. Display Advertising: Which Is Best for Your Business?

Not all digital advertising campaigns are the same. When it comes down to programmatic vs. display advertising, there are pros and cons to both options. Find out the difference between programmatic advertising and display network advertising with Agility.  

What Is Display Network Advertising? 

As oOne of the oldest types of online advertising, display network advertising consists of visual-based digital ads. Display ads can come in a wide variety of sizes and types and include banner ads, video ads, and rich media ads (where viewers click on the image or promotion and are sent to a landing page for the company or product). 

Display network advertisements are typically charged on a cost-per-click (CPC) basis. Every time a user clicks on your ad, you will be charged a specific amount, determined by your bidding strategy and contract. It is possible to also set a predetermined budget for a CPC display advertising campaign. Once meeting that budget, the campaign pauses automatically. 

Display Advertising Example

For example, if you had a shoe company, you could create a banner ad about your most recent shoe line to drive traffic to your webstore. You would then make a deal with a company like Google to run the display ad for a certain number of clicks. For the sake of this example, Google would agree to show people your ad until you get 10,000 clicks for $0.50 each, costing you a flat fee of $5,000 for the campaign. 

When Should You Use Display Advertising? 

Display ads are an important part of paid advertising campaigns. With the right imagery and content, display advertising helps drive clicks and increase brand awareness. These ads are also effective for engaging or re-engaging visitors to your website. 

Drawback of Display Advertising

The downside of using display advertising is that it is a very broad marketing tactic. It is the digital equivalent of renting a billboard. They provide high reach and can help promote brand awareness, but that comes at the cost of a lower click-through rate and lower conversions than other advertising options. 

What Is Programmatic Advertising? 

Programmatic advertising is a different way of purchasing digital ad space. It uses an automated algorithm that bids for digital ad space to help ensure that the right ad is placed with the right customer at the right time. 

With display advertising, ad campaigns can be seen as a formal contract. After negotiations, both sides agree to the terms and conditions, and the ad runs for a set amount of time. Programmatic advertising is more like an auction house. Ad publishers (sellers) offer ad space, and digital advertisers (buyers) bid on that space. If multiple buyers are targeting a specific market, the bidding war will raise the final price of running the ad. The opposite is also true; if there are fewer bids, the price will decrease.

Programmatic Advertising Example

So as the owner of that shoe company from earlier, you would go to an ad exchange that acts as a virtual marketplace for ad spots. You could look through the offers for advertisement locations, find the one that best fits your campaign, and place a bid on that location. 

If you were the only person interested in that spot, you would automatically win the auction and be able to place your ad. But, if more people were interested, you would enter a bidding war until one company came out the winner. 

The key to programmatic advertising is that it does the entire process of auctioning, bidding, and posting ads automatically and in real-time through software algorithms. It completely removes the human element, making it faster, cheaper, and extremely more efficient than display advertising. 

When Should You Use Programmatic Advertising? 

Programmatic advertising is part of the reason you start to see ads for tents and sleeping bags after doing a few searches for campsites you could visit over the weekend. It uses big data to find the best online space for your ad to run. This allows advertisers to target ads at specific demographics and create a more personalized ad campaign that ensures you are not wasting your marketing budget on the wrong audience. 

Because of the custom, highly-targeted nature of programmatic ads, it’s perfect for niche markets and smaller companies. And because of the sheer volume of ad space available for programmatic advertising, even the smallest startup can have a place at the table.

Display network advertising requires person-to-person interactions, which can make it difficult for smaller companies to find the budget or the brand power to be recognized to even get the opportunity to sign a contract. Programmatic advertising is entirely automated and digitized, which removes any bias and puts everyone on an equal playing field. 

Drawback of Programmatic Advertising

One potential problem with programmatic advertising is incorrect ad matching. Because of the automated nature of the ad-placing process, there is a risk for your ad to be placed on a website you do not want to be associated with your company. For example, an airline placing an ad about reduced rates on a news site reporting about a recent airplane crash would be bad placement many would consider distasteful. 

Choose Agility

We make deciding between programmatic vs. display advertising an easy choice. Contact us today to find out how Agility can help your company get started in creating, managing, and tracking programmatic ads.

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