Programmatic vs Display Advertising: How do they compare?

What is Display Advertising?

Display advertising is one of the oldest types of online or digital advertising and has been available since the mid-1990s.

Display ads Google Ads show as banners that are available in a number of sizes and are shown to audiences through Display Networks. Google’s ad platform, the Google Display Network (GDN) is one of the most well known platforms. According to Google, it has over 2 million websites and reaches over 90% of people on the internet. Yahoo and Bing also have their own Display Networks.

How does Display Advertising work?

Google’s Display Network works as an interface between you, the advertiser, and the publisher – the websites you want to display your ads on.

You can use this network to select a specific target audience based on their domain, interests, demographics and other targeting selections. You can also control when your ads are shown and where on a website they will be placed. This could be on a mobile app, a specific website or a specific page on a website.

You bid for the ad space you want and these are auto optimised for better results over time. You can select website tiers you want to appear on, blacklist certain sites and be aware of where your ads will show.

This allows you to reach your audience when they’re looking around on the internet, checking their emails, using mobile apps or watching videos on YouTube.

Advantages of Display Advertising

If you’re looking to run Display Advertising campaigns for your business, it’s important to understand the advantages of the channel.

Visually appealing

Display ads are an eye catching and visually appealing way to catch the attention of potential customers and create a positive impression of your brand.

Display ads provide creative freedom, allowing you to use images, graphics, video, animation and text as well as your brand colours and logo.

Create brand awareness

One of the biggest advantages of display advertising is it allows you to increase awareness of your brand online. Your ads will be shown to your target audience when they’re browsing the internet, allowing you to introduce your brand to them. They allow you to show important elements of your brand quickly.

Targeting

With display advertising, you will be able to choose from many of the same targeting options you also get with programmatic advertising.

Display ads allow you to target potential customers who may be close to a purchase decision by retargeting those who have already been on your website. Different variations of your ads can also be shown to customers based on their demographics, location or interests to increase the chances of conversion.

Cost effectiveness

In comparison to advertising methods such as television or billboards, display advertising allows you to show your ads with a low investment. You can set your campaign budgets to meet your marketing budgets and the ads require very little investment.

Large reach

The reach of your display ads will depend on the ad networks you use but this ad format can have a huge reach which will help you to build brand awareness and attract people who might not find your brand otherwise.

Range of ad types

Display advertising allows you to create a number of different ad types to meet the needs of your business and your customers. Ad types include:

• Remarketing ads – most display ads are remarketing or retargeting ads. Retargeting ads help you to re engage with those customers who have already visited your website and try to encourage them to convert. These ads allow you to target customers with personalised product or service recommendations, based on the pages of your site they showed an interest in. 91% of customers prefer to buy from brands that remember their interests.

• Personalised ads – these ads allow you to target potential customers based on demographic targeting and interests they show online which you can then use to create a custom audience for your business. Remarketing is considered to be a sub-category of personalised ads but other ad types include affinity targeting, custom affinity groups, custom intent and in-market ads, similar audience ads.

• Contextually targeted ads – contextually targeted ads are placed on websites according to certain criteria which can include topics and keywords, location or language preferences, the theme of the website and recent browsing histories of a website’s recent visitors.
• Site-placed – this ad type allows you to hand-pick the websites you want to host your ad. You can select a full site or individual pages within a website, this can also be combined with contextual targeting too.

Disadvantages of Display advertising

Whilst display advertising can offer a number of benefits, there are also a few disadvantages to consider when choosing it as part of your digital marketing strategy.

Low click through and conversion rates

The click through rate for banner ads is an average of 0.1% which is lower than many other forms of advertising. This can also result in a lower conversion rate too. Banner ads are usually displayed in the awareness stage of the buyer’s journey so it’s better to use them as part of your overall marketing plan and as a long-term channel. Display ads are good for initial brand awareness and to prepare potential customers for more in-depth content later in their journey.

Consumers don’t like ads

Many consumers find that ads are now more frequent and intrusive than ever. When people get annoyed with online ads, they will use ad blocking software so they can’t see them any more. This can affect the reach of your ads and means you may not be able to reach as many of your ideal customers as you could before.

What is programmatic advertising?

Programmatic adverts are online ads that can be purchased through a private marketplace and placed using software, instead of manual methods.

Traditional advertising includes requests for proposals, tenders, quotes and human negotiation. On the other hand, programmatic advertising uses machines and algorithms to buy display space.

The process is not completely automated but the labour intensive side of advertising is so that advertisers can focus on optimising and improving existing ads.

How does programmatic advertising work?

Programmatic advertising involves a buying flow:

1. Someone clicks on a website
2. The website owner offers an ad impression up for auction (SSP)
3. Advertisers bid for the impression (DSP)
4. The highest bidder wins
5. The ad is shown to the user on the website
6. The user clicks on the advert (and should convert!)

This all happens within a few seconds so that the right ad is shown to the right user, in the right place, at the right time.

Advantages of programmatic advertising

Programmatic advertising offers a number of benefits:

Efficient

The automated nature of programmatic advertising can save you significant amounts of time. Automation means repetitive and time consuming tasks such as bidding and requesting ad space are taken care of. This means you can focus more time on improving and optimising your ads rather than being side tracked by the day to day operation of the ads.

More precise targeting

Programmatic advertising provides more options for ad targeting with advanced targeting methods easier to use. Programmatic advertising allows you to target ads based on:

• Demographics – age, gender, income, marital status

• Interests – preferences and interests based on information users provide and the websites they visit

• Location – broad areas such as countries and regions as well as more specific places such as neighbourhoods, specific addresses, and individual stores
• Retargeting – target users who have previously visited your website or expressed an interest in your products or services

Transparency and real-time reporting

The automation and software used with programmatic advertising provides information about where your ads are placed, how much you’re spending and how your ads are performing. This information provides much greater transparency into your advertising campaigns.

Programmatic advertising also offers real-time reporting so you can use this information to continually optimise your campaigns.

Increased reach

Automation provided with programmatic advertising allows you to search through huge volumes of websites to find the perfect placement for your ads.

You wouldn’t be able to look through nearly as many websites manually so this provides you with the ability to increase the reach of your ads and enjoy better results.

Range of ad types

Just like display advertising, programmatic advertising provides a number of different ad types, including:

• Image ads – these ads contain text and images, similar to Display ads
• Audio ads – appear in podcasts, internet radio and music streaming platforms such as Spotify.
• Video ads – can appear as native ads blended on a web page or in stream within video players such as YouTube.

Disadvantages of programmatic advertising

Alongside the advantages, you should also consider the disadvantages of programmatic advertising before adding it to your digital marketing strategy.

Expensive

Programmatic advertising can be much more expensive than other types of advertising. However, you could offset these costs by working with a vendor or agency who already know how to use the platform and will allow you to get more from your budget.

Becoming more competitive

With more and more companies implementing programmatic advertising, online bidding is becoming more competitive which means it can be harder to get your ads seen and will make programmatic more expensive.

Which advertising channel should you choose?

If you’re just starting with display or programmatic advertising and want to keep things simple, the Google Display Network is the best option. There is no cost barrier and it’s easy to use and set up.

On the other hand, programmatic advertising offers increased distribution with reach to over 20 ad exchanges. This platform provides more control over creative placement, audience targeting and retargeting options too.

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If you’d like help with your display or programmatic campaigns, please contact our team today.

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