The Next Revolution In Marketing? Understanding Programmatic Advertising

As we recently shared, display ads are a major pillar of dispensary marketing, and for good reason: Especially when they’re optimized with compelling CTAs, call and location extensions to maximize their effectiveness, these ads are a powerful and cost-effective way to grab consumers’ attention.

These ads are getting faster and better.

Welcome to the era of programmatic advertising, a whole new way to purchase and leverage the ad space we use to market dispensaries (along with every other kind of business). While programmatic advertising is already in widespread use, some analysts estimate that by the end of 2021, fully 88% of digital display marketing in the United States will be managed by programmatic advertising.

So…what is dispensary programmatic advertising, and what do you need to understand about it? 

Dispensary Programmatic Advertising: Harnessing the Power of Machine Learning

You’re familiar with display ads, even if you don’t know it. Sometimes known as “banner ads,” they’re the graphic advertisements that appear in apps or websites that have licensed space for such purposes. One of the greatest assets of display ads is that they can appear in places that might not appear to directly relate to your business. The “Aha!” factor associated with seeing your dispensary ad out of context can be remarkably effective in prompting spur-of-the-moment sales.

Make no mistake: It’s not that display ads are going away anytime soon. What’s changing is the way that we buy and leverage this valuable ad space. In essence, “programmatic advertising” refers to the practice of purchasing these ads via software as opposed to the usual channels: Through human-to-human negotiations or pre-set prices.

How does it work? In a sense, programmatic advertising is simply the latest iteration in a long line of improvements to ad service. Since the first digital ad ran back in 1994, a great deal of effort has been devoted to making sure they’re served not necessarily to greater numbers of people, but to the most appropriate ones.

One of the most important refinements was the institution of real-time bidding (RTB). Taking place roughly in the span of 100 milliseconds or so—a tenth of a second—these “mini-auctions” are brokered through platforms such as Google Ads. The bidders, of course, are vying to buy higher placement in search engine return pages (SERPS).

Though RTB is a form of programmatic advertising, not all programmatic advertising uses RTB. Confused? Think of it this way: Simply put, programmatic advertising is the use of software to automate and streamline the ad-buying process. And while, yes, much of it makes use of the lightning-fast bids and adjustments you’re already familiar with if you dip into the back-end of Google Ads, there are other ways it can be used, too.

Typically, agencies that use programmatic use tools known as DSPs—“demand-side platforms”—to connect target audiences with ads via an SSP, or “supply-side platform.”

Conversely, programmatic advertising can purchase a guaranteed number of impressions on specific sites. In this case, it often employs full-page “takeover” ads, and skips the auction format to work off a previously agreed-upon fixed price.

Or it can work through a system known as “private exchange” buying, in which a limited number of page owners (“publishers”) invite a limited number of advertisers to bid on their ad space.

However it’s instituted, the goal is simple: To bring even more automation and precision to the realm of ad buying, so that we—the humans—can spend more of our time improving those ads rather than deciding how to purchase them.

programmatic advertising ai

Dispensary Programmatic Advertising: Upsides and Projections

Software can’t design the ideal ad—yet! To truly engage prospective customers on a meaningful emotional level, we still need real live humans to design the graphics, copy, and other assets. But because current marketing practices involve a great deal of human input just for the purchasing and implementation of those ads, one of the major upsides of programmatic advertising is that it takes on many of these menial tasks while it improves the targeting accuracy and effectiveness of digital ads.

In this sense, you might see programmatic advertising as simply an extension of the AI and machine learning we already offer our clients who meet the minimum ad spend necessary to make full use of its revolutionary potential.

What’s more, dispensary programmatic advertising isn’t limited only to display ads. While optimizing banner ads is one of the best uses of this game-changing technology, programmatic advertising can be applied to mobile, video, and other ad formats. In other words—as the figure we quoted above suggests—you can expect to see it grow and become the most important avenue for ad buying in the near future. How can you take advantage of it? That’s simple: Connect with the leading dispensary digital marketing agency to help you leverage cutting-edge tools like programmatic advertising and machine learning to deliver outsized results.


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