Businesses have numerous options available when it comes to reaching their audience online via paid advertising. With Google AdWords, Bing, display advertising, remarketing, sponsored content and paid social, there have never been more ways to reach your target audience.
In recent years, programmatic advertising has arisen to meet the ever-increasing needs of advertisers who want to reach the right users in the right place at the right time. There is still quite a bit of confusion for many on the difference between Google AdWords display advertising and programmatic display advertising.
The key difference lies in how that ad space was selected not the ad itself.
What is display advertising?
Display advertising is a type of online advertising in the form of banner ads, responsive ads, and rich media ads. It primarily relies on images but can also take the form of audio, video, and text to communicate to its audience.
Google AdWords display network, more commonly referred to as the GDN is one of the most well-known display advertising platforms. Other examples include Bing display and the Facebook advertising network (FAN).
How does Google AdWords display work?
The Google AdWords display network allows online advertisers to present their image and rich media ads to users across a vast network of different websites. Advertisers can target by domain, keyword or topic/interest. Much like the Google AdWords search network, advertisers can optimize their campaign for KPIs such as clicks or conversions and have control over their placements, bids and ad schedule. Unlike the search network, it allows behavioral targeting (topic/interest) and contextual targeting rather than query based targeting.
What is programmatic display and how is it different from the GDN?
Programmatic advertising offers the opportunity to take display advertising to the next level. Google AdWords, Google Analytics and a host of third party analytics can give us fantastic data about our campaigns and customer behavior. We can analyze data on converting traffic, behavioral funnels onsite, actions performed, keywords, bid optimizations, topics and much more. This is vital information for your digital marketing strategies.
However, when it comes to making the most out of your display advertising, programmatic can deal with behavioral data much faster. Programmatic advertising uses software so that machine intelligence is choosing the best placements and buying those ad placements in real time based on users’ interests, behavior, location etc. It can, therefore, leverage all that juicy data to match users to your campaign and bid on the best placements far more effectively. This is beneficial to advertisers, publishers, and users.
Programmatic uses powerful real-time bidding (RTB) in a more sophisticated way than Google AdWords or the GDN. It automates the process of buying ad space in real time based on present user data.
What is happening when users see a programmatic display ad using RTB?
1) A user lands on a website where ad space is available for display ads and monetised by programmatic advertising. If this is the case it will trigger a bid request from the SSP (Supply Side Platform). This is the part of the programmatic technology that allows publishers to manage their ad space with programmatic advertising.
2) The SSP passes this bid request to the DSP (Demand Side Platform). This is the part of the system that allows the advertisers to manage their bids and data exchange in ad exchanges across a network of sites that go beyond the Google AdWords display network. Google Double Click’s Bid Manager is an example of a DSP. It allows real-time bidding to take place in ad exchanges using the necessary data for audience targeting and allows optimization for KPIs much like Google AdWords e.g. cost per click or cost per action.
3) If the advertiser’s campaign features match the price, available advertising space, advertising format and user, based on their targeting parameters, then their bids can be submitted to the SSP via their DSP.
4) The highest bid with matching campaign criteria to user wins the auction. This means their display ad is incorporated into the publisher’s site for the user to see as they land on the page.
All this happens within less than 100 milliseconds and not noticeable to the user. From the user’s perspective, they could not tell the difference between a standard display ad on the GDN or a programmatic ad which is partly why so much confusion arises for advertisers who have not used programmatic advertising before.
Is the Google AdWords display network a type of DSP?
While the GDN shares some clear similarities with a DSP, such as optimization tools and performance metrics it is quite different to a demand side platform. A demand side platform would be vendor neutral. This means that while you only have access to websites in the GDN for standard Google AdWords display, when it comes to programmatic you have access to websites beyond this network.
DSPs and programmatic together help eliminate human error from the online advertising game and cut costs so your bids have more value in driving conversions.
Is programmatic advertising just real-time bidding?
The terms programmatic advertising and real-time bidding are often confused. The reason they are commonly used interchangeably is that programmatic advertising uses RTB but it goes far beyond this. RTB is merely a method of auction. Programmatic can be understood as an extension of the RTB capabilities but there are actually several forms of programmatic advertising:
Open Auction/ Open Marketplace – This is would be the kind of auction that uses RTB as described above. It evaluates each impression by its own merit and there is no pre-buying it is all by open auction in real time.
Private Marketplace – This is a private deal with a publisher. This is often called PMPs by industry insiders. This would mimic the direct buy process. While RTB on open auctions is advantageous, advertisers may still want to purchase specific areas of ad space on a website. You may know that your product or service will resonate with a large amount of traffic on a certain publisher’s site. They may even already have a subsection relevant to your industry e.g. the fashion section in an online newspaper. Programmatic advertising can look at the value of impressions for a specific piece of inventory (ad space) on an individual basis for space you have practically already reserved in a private deal. This is purchasing ad space on a one to one model with no real auction at all. You decide the fixed price in your negotiations with that publisher.
The programmatic handling of a private deal is better than doing it manually as targeted data and KPIs can be passed during proposals and once the ad has been shown it can retire and the ad space returned to the open auction market. PMP targeting comes from the publisher, not a DSP or third party. PMP is often better at helping advertisers drill down to really specific sections of a site.
Unreserved Fixed - This is handled in an exchange environment but on a fixed price for CPC (cost per click) or CPM (cost per impression). This is specified by the publishers. This is sometimes called Spot Buying.
Some of those who specialize in the creation of display ads have feared that programmatic could be the death of creative ad development but this video from Google Media Lab and Double Click wonderfully explains the premise of programmatic advertising, why it’s not the death of creative ads and the value of relationships with publishers:
If you are currently building your first programmatic advertising campaign Think with Google offers a great introductory guide.
Should I choose Google AdWords display advertising or programmatic display?
There is definitely still a place for standard display advertising. Display advertising using excellent platforms like Google AdWords GDN can open up a new audience and is great for brand awareness and gathering essential data. By having excellent data and experience with paid search and the display network this can give you valuable information for optimizing your campaigns and making your creatives. Remember that your campaign characteristics must match the user in programmatic real-time bidding auctions so you want an in-depth understanding.
Once you have reached the limits of display advertising and want to really use precise data to turn up those conversions then programmatic is a potentially very powerful tool once you’re ready to wield it. It offers greater efficiency, less human error, it is also often cited as a solution to banner blindness thanks to the greater relevancy.
While the GDN has better behavioral targeting than Google AdWords search network, programmatic has a clear advantage when it comes to behavioral data. The larger variety of sites also leads to more perspectives on consumer data which you can use to improve ROI.
Many businesses who are new to programmatic find the concepts overwhelming and are unsure where to start and which software to use. Many companies in this situation who want a chance to harness the power of programmatic choose to work with expert online advertising agencies to handle the ins and outs of organizing programmatic on their behalf. If you are considering using Google AdWords Display for your PPC campaigns get in touch with our AdWords experts at Paid Traffic for further advice.