Programmatic advertising is shaking up the digital advertising scene with its many supportive and pioneering features. This raises an essential question for advertisers: How do programmatic and non-programmatic advertising compare?
According to Custom Market Insights, the programmatic advertising market is projected to reach around 30.1 billion by 2032. This growth highlights new opportunities for advertisers to evaluate their marketing strategies and determine which advertising approach works for them.
In this blog, we’ll discuss the main differences between these marketing methods, highlighting their advantages and disadvantages to help advertisers make an informed decision when choosing how to incorporate them into their marketing mix.
Programmatic advertising involves purchasing online display spaces using algorithmic software. Advertisers leverage advanced technologies such as automation, artificial intelligence (AI), and real-time bidding (RTB) to create programmatic advertisements. Programmatic advertising is widely used today due to its automation, which streamlines the ad-buying process. It involves less negotiation and doesn’t require insertion orders or proposal requests.
RTB is a hallmark feature of programmatic advertising. It allows advertisers to compete for ad inventory during live auctions. This process ensures that ad placements are given to the highest bidder, maximizing the value of each impression.
Even though its process is mostly automated, programmatic advertising still requires advertisers to manage it. Advertisers are responsible for setting bidding parameters, such as bid caps and targets. Within the set limits, the bidding algorithms attempt to optimize using data that exceeds user access, making real-time decisions.
Non-programmatic advertising requires advertisers to negotiate prices, select placements, and determine the ad’s start and end date along with its display duration. This process involves significant manual effort, as ad content needs to be approved through ongoing communication. Non-programmatic advertising involves reserving a specific number of impressions and can include purchasing from a network that targets specific types of websites or buying directly from a single site.
Another key feature of non-programmatic advertising is its customization capabilities. This method allows advertisers to create large, custom ad units and sponsorships that engage audiences. It also allows publishers to secure significant brand advertising dollars, which can be more difficult in the programmatic advertising landscape.
Managing the directly sold campaigns requires an ad management team, while a team of sellers works to draw in brands. Results are tracked and reported manually and shared with the buyer as they become available. Non-programmatic advertising is commonly utilized in television, radio, print media, and digital platforms such as email newsletters and websites.
The main difference between programmatic and non-programmatic advertising is how advertisers buy space. Non-programmatic advertising requires building relationships with individual publishers that they directly buy from. Advertisers need to maintain strong relationships with publishers since they can provide access to their readership and help reach specific audiences to produce good returns.
Another notable difference between programmatic and non-programmatic advertising is that programmatic allows advertisers to purchase media space across millions of publishers without direct interaction. This method will enable advertisers to buy advertising space based on clearly defined audience characteristics. However, it’s important to note that advertisers may miss out on access to higher-quality publishers and media space when leveraging programmatic advertising.
Programmatic advertising empowers advertisers with advanced targeting capabilities. These capabilities allow advertisers to target specific audiences with unmatched precision. Advertisers can customize their messaging to resonate with varying interests and behaviors.
Significant targeting limitations exist in non-programmatic advertising, forcing advertisers to rely solely on their intuition and historical data to deliver unique content. Non-programmatic advertising involves a broader, less centralized approach, resulting in targeting larger audience segments without the precision offered by programmatic techniques.
Programmatic advertising uses RTB, which helps advertisers ensure their ads are placed in relevant locations. RTB helps reduce the likelihood of misallocated resources and boosts overall campaign performance.
Several key players in the RTB process include the advertiser, the demand-side platform, the ad network, and the ad exchange. These players collaboratively work to conduct auctions in real time. When a visitor clicks on a webpage, the auction for the ad inventory begins immediately. Although many intricate actions occur behind the scenes, the entire process happens within a fraction of a second. For example, AdRoll’s BidIQ makes over 20M predictions per second for real-time accuracy.
RTB takes place in both open and private marketplaces. It is time-efficient, allowing advertisers to accomplish various tasks that would have taken hours if managing campaigns manually. RTB enables advertisers to respond quickly to necessary changes and make prompt adjustments to optimize their campaigns.
Non-programmatic advertising operates on a fixed pricing model for ads. These prices are typically determined through negotiations between publishers and advertisers without leveraging dynamic pricing strategies often associated with programmatic advertising. This process is time- and resource-exhaustive.
In non-programmatic advertising, placements are fixed, meaning advertisers cannot remove the ads from the selected locations once they’re set. Advertisers choose specific locations where they believe their target audience is most likely to engage with their content.
Programmatic advertising offers several key benefits that help enhance marketing efforts. Let’s explore these benefits to understand why so many modern advertisers lean on programmatic advertising.
Programmatic advertising has exceptional targeting capabilities. This method helps you carry out more precise ad campaigns.
Programmatic advertising is more efficient than traditional, non-programmatic advertising. It allows ads to be placed quickly while prioritizing cost efficiency. It enhances impact by delivering advertisements to those most interested in its content. Automation saves time and money, meaning you won’t need to do the heavy lifting of sourcing placements and bidding for them.
Programmatic advertising offers significant flexibility. It allows advertisers to adjust their campaigns based on real-time data and gives them greater control over when and where their ads are displayed.
Another notable feature of programmatic advertising is its scalability and reach. Due to access to a vast network of publishers and platforms, you can quickly scale a campaign to advertise across many digital channels. Completing this process would require a large team of advertisers if conducted manually.
While programmatic advertising has many advantages, it also has certain drawbacks. A significant concern is brand safety. Brands risk displaying their ads alongside inappropriate content, damaging their reputation. The automated nature of programmatic advertising makes it challenging for advertisers to control where their ads appear, potentially leading to placements in harmful environments.
To mitigate these risks, advertisers should take proactive steps. They can work with reputable ad networks, use contextual targeting to ensure website content is relevant to ads, and refer to lists containing websites and apps approved for ad placements.
Accurate analysis of advertising platform metrics is another significant challenge in programmatic advertising. Many advertisers struggle to interpret the provided data, creating uncertainty regarding where their ads are displayed and who is engaging with them.
This lack of clarity can lead to confusion about which metrics truly indicate campaign success. A skilled programmatic advertising team is essential to effectively navigate these complexities. Their expertise is necessary for ensuring that the right metrics are prioritized.
Non-programmatic advertising also offers various significant advantages that enhance advertiser’s campaigns. Let’s discuss the main benefits of this advertising method below.
Some advertisers prefer directly interacting with publishers, as they value building personal relationships. For these advertisers, having a personal connection is more meaningful than the automated process used in programmatic advertising.
Another advantage of non-programmatic advertising is its ability to reach a local audience effectively. This approach can be beneficial for targeting nearby customers. Advertisers can increase brand visibility in the neighborhood through physical promotions, such as flyers or billboards. This exposure helps potential customers become familiar with the brand, making them more comfortable when it comes to making a purchase. Programmatic advertising also has location-based targeting, but some advertisers prefer the non-programmatic route for local businesses.
Overall, non-programmatic advertising enhances businesses’ presence in the community. Non-programmatic advertising can reach potential customers who aren’t typically found online. This approach allows advertisers to capture interest and, hopefully, convert prospects into customers.
Non-programmatic advertising lacks the advanced targeting capabilities of its programmatic counterpart. This limitation wastes advertisers’ energy, which they could have invested elsewhere.
Another drawback of non-programmatic advertising is the high cost of using traditional channels. For advertisers working with a limited budget, executing their campaigns and meeting their goals is challenging.
To outline their differences, below is a table comparing the key features of programmatic advertising and non-programmatic advertising.
Features | Non-Programmatic Advertising | Programmatic Advertising |
Cost | Pricing is dictated through manual negotiations | Cost-effective budget allocation based on RTB |
Targeting Abilities | Only leverages historical data | Targeted, data-oriented audience segmentation |
Campaign Management | Manual oversight | Streamlined campaign management |
Purchasing Process | Direct negotiation with publishers | Automated process leveraging AI and RTB |
Real-Time Optimization | Few real-time optimization abilities | Provides real-time optimization |
Comprehensive Data | Variable analytics dependent on publisher | Detailed analytics to determine ROI |
Market Adaptability | Adjusts slowly to changes | Flexible with market trends |
Navigating the choice between programmatic vs. non-programmatic advertising may be overwhelming, but it’s helpful to understand the unique features both offer. Ultimately, the choice depends on the campaign’s goals and desired level of control and reach.
With AdRoll’s programmatic advertising capabilities, advertisers can access a vast network that enables them to connect with over 1.2 billion internet users. The ability to reach such large and relevant audiences enhances the effectiveness of advertising campaigns, allowing advertisers to stay ahead of the curve. If you’re ready to harness AdRoll’s cutting-edge programmatic advertising technology, get started today!
Last updated on November 20th, 2024.