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Programmatic Advertising and Audience Targeting

Updated: Jul 27, 2022

A Brief Overview of Programmatic Advertising

In 2021, programmatic advertising accounted for approximately 90% of all digital display marketing. So, what is programmatic advertising? Simply put programmatic advertising is the use of artificial intelligence (AI) to purchase digital advertising space rather than a human. The goal is to increase the efficiency and transparency of both the advertising and the publisher. RTB, or real-time bidding, accomplishes this by purchasing advertising at the same time a visitor loads a page.

Unlike traditional types of advertising, programmatic advertising is offered on an individual basis. It allows advertisers to locate and target consumers based on their unique qualities, activities, and affinities, regardless of where they are on the internet.

Data rule progressive advertising. When you have information on your audience's personal characteristics, values, beliefs, and attitudes, you can use psychographics. People can be divided into categories based on if they are family-oriented versus individualistic, leaders versus followers, or thrill-seekers against homebodies, for example. Geographic location, gender identity, age, ethnicity, wealth, and amount of formal schooling can all be used to create subgroups. Subsets can also be formed based on historical behavior, such as past purchases.

Programmatic Advertising and Audience Targeting

The capacity to segment your whole audience of potential clients into groups based on various factors such as online behavioral characteristics, demographics, interests, and intent is known as audience targeting. Audience targeting allows you to create more personalized and optimal experiences depending on the requirements and interests of your customers. Audience Targeting is a powerful tool in the arsenal of a marketing director.

Audience targeting is critical for marketers who are constantly striving to reach the right people with the right messaging at the right moments. After all, if your ads aren't properly targeted, you'll have sluggish campaign performance, wasted ad spend, and terrible consumer experiences on your hands. Brands that prioritize best practices for audience segmentation and use people-based data to generate tailored audience groups will be able to stay up with their customers' journeys as their demands and circumstances vary in programmatic.

You can save both time and money by driving the right traffic to your site. In many companies, time and money spent on unqualified leads and inefficient marketing methods are among the worst wastes of resources. When you don't target accurately, you end up creating and disseminating messages with a very low chance of attaining desired results with unqualified prospects. Your representatives waste time and energy on ineffective activities and conversations with individuals who are uninterested in your product or service.

Take, for example, pay-per-click advertising. So, what is Pay Per Click advertising? In the advertising paradigm of programmatic internet marketing, advertisers pay the price each time one of their commercials is clicked. It's basically a method of buying website traffic rather than trying to "earn" it organically, as we talked about above.

This can be effective when matched with audience targeting, but when it's not targeted, the results can be disastrous. You could be paying for 1,000 clicks and be only generating one sale. That is a very low return on investment. When you target the ads leading to the clicks, you may have fewer visitors, but these visitors are more likely, once again, to buy your product or service. This means that instead of losing money on clicks, you are actually gaining it.

Audience targeting can also allow you to advertise at little to no cost with organic traffic.

When you know your target audience, you can tailor the ad experience to their needs, interests, and beliefs to draw organic traffic to your website. Organic traffic is valuable and beneficial because it does not demand a large investment but yields long-term effects, allowing you to optimize your profits. Organic traffic refers to visitors who arrive at your site after clicking on search engine results.

It cannot be stated nearly enough! Engaging the right audience is far more important than driving any audience to your website! Imagine you are a pharmaceutical company selling a medication used to help alleviate joint pain in the elderly. Even if you develop the perfect ad, if you target 20-40-year-olds for your ad, you will most likely squander your time and money. The goal is to show the advertisement to the correct people, not to everyone. With organic traffic, you can attract potential clients to your business by speaking directly to the demographic you're targeting. Since the keywords that targeted these users are based directly on the demographics most likely to engage with your product or services, the potential to make a sale is much higher than it would be otherwise.

Getting Started with Audience Targeting

We've said it in previous posts, and we will say it again, data is king when it comes to successful marketing strategies. In this case, your data is all about knowing your target audience. To gather that information, you will need to partake in both quantitative and qualitative research.

In a nutshell, quantitative market research is the process of gathering vast volumes of data via surveys, questionnaires, and polling techniques. The goal of quantitative research is to gather trustworthy, standardized information and figures to help answer crucial business questions such as "Does our product have a strong market?" or "How important is this service to our customer base?" Quantitative data from primary research is frequently collected using surveys and questionnaires. To provide insights, quantitative data gathering methods often rely on closed-ended questions. The field of research participants must be broad enough, with special care dedicated to ensuring adequate audience representation.

Qualitative market research, on the other hand, entails determining customer motivation through careful observation –– usually in a small group or face-to-face meeting. The goal of qualitative research is to gain a better understanding of customer motivation and emotion. Quantitative research is primarily concerned with the "what" of customer behavior, whereas qualitative research is concerned with the "why." This method can disclose things like why customers like or detest a company, why they appreciate certain marketing messages but not others, and what motivates actual consumer behavior.

Focus groups, internet message boards, and in-depth interviews are all examples of qualitative market research methods. Different techniques and approaches have benefits and drawbacks, but skilled moderators know how to manage each style for the best results. Since the pool of responders is smaller, modifications must be made to avoid bias, or you will wind up with a lot of raw data but very little useful knowledge.

So, where do you get this information? Data is usually gathered through first, second, and third-party sources.

The first type of data you should have been first-party data. It's data that your brand has gathered on its own. This can contain data about previous customers, connections, leads, and opportunities, social media followers, email newsletter readers, and desktop or mobile website visits. Some of this information is already in your POS or CRM system. In other circumstances, you may need to take extra actions to obtain the data, such as enabling a tracking pixel on specific pages of your website to track web users. However, first-party data sets are frequently tiny, limiting your ability to expand beyond your current audience. You'll need second or third-party data to better meet these objectives.

When you use someone else's data for your targeting, this is referred to as second-party data. It could be supplied by an industry contact, shared as part of a partnership, or purchased through data exchange. Second-party data is less commonly used than first- and third-party data, but it might be a smart strategy to expand your audience while retaining data set quality and exclusivity. Depending on the sharing agreement and the volume of data you require, it may also be less expensive than third-party data.

Finally, there is data collected from third parties. Third-party data is acquired by data sellers who collect and then extrapolate the data before offering it for sale to other parties. These data sets are available for purchase on public data exchanges, demand-side platforms (DSPs), and data management platforms (DMPs). Third-party data is ideal for scaling an advertising campaign quickly. Third-party data, while not as targeted as first- or second-party data, helps you to locate and reach entirely new groups that your first-party data alone would not allow.

In an effort to reach a wider range of prospective new customers, the most effective audience targeting efforts combine first-party data with second-party or third-party data, and occasionally a combination of both. If your first-party data revealed that your target audience was mostly middle-aged females interested in extreme sports, for example, a third-party data set may help you reach all women over forty in the United States who have a known fondness for Red Bull films.

Utilizing this data will help you create more targeted ads and ensure your ad spend used in a manner that ensures your greatest return on investment.

Staying relevant with your advertising placement helps to draw in the right audience to your business. That is where contextual targeting can come in handy! Contextual targeting is the practice of displaying ads based on the content of a website. A bookstore may advertise, for example, on a blog that reviews mystery books. On the other hand, a sport's drink may advertise on a forum for soccer fans.

There's also semantic targeting to consider. Semantic targeting is a type of contextual targeting that uses machine learning to understand the meaning of each page of content rather than simply looking for keywords that match. This method of targeting is successful. A crawler scours the internet, categorizing websites based on context and semantics. When a user views a page, the ad server receives the content information from the page and matches it with relevant advertising for the keywords and content.

Once you know your target audience, you can retarget them. Retargeting is slightly different from direct audience targeting. Site retargeting is a type of display advertising that shows ads to those who have previously visited a website. A pixel is placed on a marketer's website that creates a cookie in the user's browser. They will then see ads for that company's product or service when they visit social media or other sites on the web, even if they are not on that company's page.

Geotargeting and Geofencing are two very similar but slightly different programmatic advertising techniques that target potential customers. Using the IP addresses of a user's devices, geofencing involves erecting a virtual perimeter around a location. Advertisements inside this parameter are seen on computers, tablets, and mobile devices by all users within the specified location. Geotargeting, meanwhile, refers to the practice of distributing advertisements to those who fulfill precise targeting criteria and are within a specified radius. The distinguishing characteristic of geotargeting is that it focuses on particular consumer characteristics, such as demographics, habits, and interests, as well as a person's location. Both can be used in programmatic advertising to reach consumers in your area most likely to buy from you.

Using geotargeting to develop a positive reputation as a market leader inside your local community is a fantastic opportunity. You can gain popularity and trust over time by developing customer relationships in your service regions.

Social media is a great way to market your product or service. As of January 2022, there are 3.96 billion overall social media users across all platforms, and adults are spending more time on social media than before, more than 95 minutes per day. It's also gradually becoming the most common method of web marketing. In terms of advertising, social media just surpassed paid search, gaining 25% year over year, and surpassing $137 billion. Just edging out search's $135 billion.

So how do you utilize audience targeting with social media? To begin with, social media monitoring can offer you a wealth of information about your communication channels and target audience. When you're targeting a certain demographic on social media, it's critical to keep track of what they're talking about and what messages they're sharing. You can better target your target demographic with marketing campaigns if you have the correct tools in place. Understanding your target audience will help you be more effective on social media. By identifying and engaging with your targeted audience on social media, you can boost brand recognition, develop trust and loyalty, and boost revenue.

You may also take a close look at the competition. If you acquire some insight into how other businesses in your field have established their followings and engaged their audiences, you'll be better able to determine your own target demographic and grow your following.

As part of their normal or business suites, several social media sites also feature tools to assist you in engaging your audience. You can utilize Facebook Ads Manager to find people who would be a good fit for your target market. This can be any demographic, such as a specific age group, gender, ethnicity, or even geographic area. You can then directly target that precise audience on social media. You can use Facebook's Lookalike Audiences or Instagram's Custom Audiences to attract a certain audience on social media. These are folks who share your top customers' passions, which means their lookalikes are more likely to buy from you as well.

Another benefit of using social media is the use of hashtags. Hashtags are words or expressions that appear after a hash (or pound symbol) on social media and are used to describe or classify the topic or subject of a post or tweet.

Think of hashtags as keywords you can use to reach your target audience. Hashtags are one of those amusing social media tools that can be challenging to grasp and use. However, once you've mastered them, the results will stream in. Using hashtags is a technique to bring together discussions or information on a specific topic, making it easier for individuals to find content that interests them.

Hashtags can be used on almost every social media platform, although Twitter and Instagram are the most popular. If you're utilizing social media to promote your business, hashtags are essential. Hashtags can assist increase the reach and engagement of your brand on social media. Instagram posts with at least one hashtag, for example, receive 12.6 percent greater engagement than those with none at all.

Final Thoughts

Audience targeting allows you to reach out to your potential consumers with pinpoint accuracy and scale based on their past, current, and prospective online and offline behaviors, interests, geography, and demographic information. You'll spend less money on clicks that have no return on investment if you have the correct data and a strategy in place to attract your target audience.

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