Programmatic Advertising KPIs and Beyond

Definitions, Targeting, Examples & More for Digital Marketers

Programmatic Advertising KPIs

It can be difficult to find programmatic advertising explained clearly. Let’s take a detailed look at programmatic marketing and programmatic advertising KPIs.

Programmatic advertising is a subset of paid advertising campaigns. 10 years ago, you would set a “cost per click” (say, 10 cents) and you would pay that amount every time someone clicked on an ad. You would set a budget and you would get the number of clicks you paid for.

The world is a little more intricate now. Services like Google Ads or Bing Ads have millions of websites under their banners. Each of these websites may have a “bid price” for advertising on their page. They will run whatever ad bids highest. This is how Google Ads, Bing Ads, etc, ensure that their advertisers make the most money.

Programmatic Advertising is an automated solution that bids on the fly for advertising space. So, you might say that you want to bid “up to 14 cents” or another amount, and the automated service will find the best website on which you can run your ads at an acceptable price.

For the advertising sites, this ensures they are always getting the highest bidder on their site. For the advertisers, this ensures that they are able to find a site within their budget. And there is another layer. The intelligent programmatic advertising algorithm also selects audiences that are most interested in a product. For instance, a “shoe” site may be more valuable to another shoe company than it would be to a boat company.

And advertisers still do set a budget, such as “$20 a day” or “$100 for the entire campaign.”

Programmatic advertising means that advertisers don’t need to micromanage where their paid ads are faced. It means that ads are generally more effective than they would otherwise be, because they are targeted appropriately to an audience. But it also means that advertisers need to carefully consider their marketing spend, because it may not be as clear as it at first seems. Programmatic advertising KPIs are going to include things like cost per click, cost per impression, and ROI.

Programmatic Advertising

So, essentially, programmatic advertising and programmatic media is tailored not only to the venue (the website being advertised on, most often) but also the audience. When you dig into the programmatic advertising meaning, it’s all about automation and automating the process of building advertising traffic.

Here’s a very simple example. A company that sells hiking equipment is trying to advertise. They have a budget of 8 cents per impression. Meanwhile, there are two websites: a knitting website and a website that sells tents. Advertising on the knitting website might cost 4 cents while the website that sells tents might cost 6 cents. Meanwhile, another company sells yarn and their budget is 5 cents. For them, the knitting website costs 5 cents but the tent website costs 3. The hiking equipment company wins the bid on the tent website; the yarn company wins the bid on the knitting website.

Of course, there’s the other layer. There’s the audience. This also factors in. A company will also bid more for an audience member who is interested in hiking or yarn.

This is a very complicated process and it has to be entirely automated. Artificially intelligent algorithms are often used to match the right venues with the right bids. This has been a simplified example. In real life, there are a multitude of factors involved.

Marketing KPIs

Programmatic advertising KPIs aren’t different from digital marketing KPIs, they’re just more focused. The marketing KPIs used in programmatic advertising are going to focus on things like bid price, budget, and ROI. These things are also considered in general digital marketing, but they’re more impactful with programmatic advertising because of the way the process is automated.

A marketer is going to need to pay attention to programmatic advertising KPIs to determine whether they need to change their automated rules. Automated rules are thing that give the automation its guidelines; things like budget, format, and where they want to advertise, and what demographics they want to advertise to.

And, of course, like all marketing KPIs, the marketer needs to focus on what’s more important. In an awareness campaign, for instance, they may not be that concerned about ROI or revenue generated. They may be more concerned about clicks and impressions. But with a conversion campaign, they are going to be primarily concerned with ROI and ROAS and fine-tuning these advertising processes.

Google Analytics is one of the most common platforms for advertising and most programmatic campaigns support it. The major programmatic advertising KPIs that are tracked include impressions, clicks, and cost.

Programmatic Advertising Platforms

Other than Google Ads, what are some of the most popular programmatic advertising platforms?

Programmatic advertising is relatively new, but there are still a lot of platforms that are popular. The Trade Desk, Kedet, MediaMath, Amobee, Disruptive Advertising, and so forth are meta-systems that are designed to provide the best bidding solutions across multiple venues. While Google Ads is technically a programmatic advertising platform, it only supports Google sites.

These other advertising platforms are able to support a multitude of other venues.

This highlights the importance of consolidation. Programmatic advertising platforms do make it possible to consolidate your outward advertising efforts. That being said, they’re focused primarily on managing your ad campaigns and bidding on ads — not providing you the information you need to manage your advertising campaigns.

Programmatic advertising platforms also differ from Google Ads in their targeting. Google Ads is able to target based on the metrics that Google itself collects, while programmatic advertising platforms utilize data from multiple venues. Google Ads is important to consider because it’s one of the most popular paid advertising venues, but programmatic advertising platforms can advertise on Google ads and more.

Programmatic Advertising Examples

What format do programmatic ads take? Let’s take a look at some clear programmatic advertising examples. Now that we understand a little more about programmatic advertising KPIs, we can take a deeper dive.

It’s important to understand the different types of programmatic advertising. There is display advertising, but also video ads, audio ads, and social ads. While display advertising is very popular, social ads are also extremely effective.

So, let’s take a look at programmatic advertising examples.

One example of programmatic advertising was The Economist, which created audience segments for finance, politics, economics, good deeds, careers, technology, and social justice. Through these audience segments, the Economist was able to target its advertising more efficiently toward specific segments, creating 60 ad versions that were targeted to mixes of these audiences, and bidding appropriately.

Another example was AirAsia, which created three different target audiences and highlighted different routes and rates tailored to the individual. They were able to bid based on different interests, thereby improving their ROAS by up to 5800 percent. These programmatic advertising examples highlight the importance of understanding the audience.

Programmatic Targeting

As mentioned, programmatic targeting is one of the most powerful aspects of programmatic advertising. But the ability to target audiences is based on the data that’s collected. Programmatic targeting options have to be rendered from the inventory of data the platform can impact.

On Google Ads, programmatic audiences are built based on information that Google has about its customers. Likewise, Facebook builds programmatic advertising based on the information users provide and the information that Facebook observes about them.

On programmatic platforms, data is pulled in from multiple locations, thereby building significantly larger pools of observed and provided information. This can improve the effectiveness of the programmatic campaign.

Companies should always err on the side of more information. A programmatic platform that has more information is going to be able to deliver substantially better results. At the same time, platforms such as Google Ads and Facebook are still extremely valuable, especially when consolidated through a single system.

Programmatic Goals Definition

What would be some examples of programmatic goals? First, there’s the programmatic goals definition. The definition of many platforms is going to be conversion, traffic, brand awareness, and so forth.

Some classic examples of programmatic goals include audience reach and audience conversion.

When it comes to audience reach, the programmatic platform is designed to try to reach an audience specifically when they are most likely to be interested in a brand or a product. With audience conversion, the programmatic platform may also be scoring leads.

It’s important to have goals for every advertising campaign. Without these goals, programmatic advertising KPIs can’t be designed, measured, and tracked. Many programmatic platforms will let you set your goals at the very beginning and will tailor themselves to your needs.

Future Of Programmatic Advertising

Programmatic advertising was introduced in just the last decade, but it’s become very popular very fast. It’s still growing and evolving. There are many indications that it’s here to stay. Programmatic advertising substantially automates and improves upon the previously manual process of having to seek out and bid on the best possible advertising solutions.

But the future of programmatic advertising and programmatic advertising KPIs may be a little more complex.

Today, a lot of the tracking that’s being done involves third-party cookies. Many operating systems are taking action to eliminate these types of tracking cookies and provide customers with more privacy. When that happens, audience selections will be far more limited. Advertisers are going to have much less information available.

But that also makes programmatic advertising platforms more important. When there’s less information available for each platform, it will become more important to consolidate information.