How to Dissect What 'Programmatic' Means for Your Business

How to Dissect What 'Programmatic' Means for Your Business
Image credit: Shutterstock

Free Book Preview No BS Guide to Direct Response Social Media Marketing

The ultimate guide to - producing measurable, monetizable results with social media marketing.
Guest Writer
Chief Product Officer of ReachLocal
4 min read
Opinions expressed by Entrepreneur contributors are their own.

The online marketing industry is chock-a-block with terms and acronyms that are incomprehensible to everyone but insiders. That’s why I’m pretty certain that the word “programmatic” is just a confounding buzzword for most local business owners. Sure, it’s likely that many have heard the term “programmatic,” but what does it really mean if you’re a local business owner? And how can programmatic help -- or hurt -- local businesses? I think it’s time we dissected the buzzword. 

Related: 25 Signs You Need Help Marketing

Programmatic -- Real Speak

Any business owner who looks up the definition of programmatic will find something like this: “Programmatic marketing encompasses. . . technologies that automate the buying, placement and optimization of media inventory, in turn replacing human-based methods.” 

In simpler terms, programmatic ad-buying uses automation to help marketers purchase online ads that reach specific audiences. However, in my experience, programmatic isn’t a “hot off the presses” technology and isn’t used only for purchasing ad inventory. In fact, for nearly a decade now, I’ve seen programmatic technology being used to automate the purchase and optimization of keywords to drive website traffic for local businesses. And now that approach is being applied to ad purchasing as well.

Using programmatic technology, then, marketers can narrow the reach of their ads based on a host of variables, including geography, demographics, socioeconomics, etc. The technology also allows marketers to specify other parameters, including budget limits. The ability of programmatic to more precisely target audiences can be a real plus for local businesses. And, given that consumers are migrating to digital media, it would seem that programmatic ad buying is a no-brainer for small businesses -- if only they understood the technology and had the time to do their own marketing.

Time and technological know-how can be big hurdles for local businesses to overcome in any aspect of digital marketing, and programmatic is no exception. Programmatic ad-buying technology is based on machine-driven rules defined in advance by purchasers -- often a very nuanced and detailed process. Once established, those rules govern the purchase of ads for a set period of time.

If the rules are off, the technology can execute buys and placements that are reaching the wrong audience -- hardly an efficient use of funds. While a few days of misplaced ads may be a mere blip on the radar screen of a big business, local businesses don’t have the huge budgets that can weather that type of trial and error process.

Related: What Digital Ad Agencies Need to Navigate the Future

Businesses cannot live by technology alone.

When done correctly, programmatic ad-buying drives a very effective return on your advertising spend. However, the smaller budgets that are typical of local businesses require close monitoring and experienced decision-making to enact the rapid-fire campaign adjustments needed to preserve limited resources. That level of oversight often isn’t available in a typical programmatic buy, and without safeguards, local businesses can burn through programmatic campaign-spend incredibly fast.

I work day in and day out with local businesses, and would caution them to employ programmatic only if they have someone to guide them.

Programmatic is only as good as the results you’re getting. So, be sure to work with a vendor that provides complete transparency into your return on investment. Don’t get sold a buzzword that doesn’t create any buzz for your business. 

Related: The 4 Smartest Moves for Your Mobile Marketing Dollars In 2015

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Let us help you take the NEXT step. Whether you have one-time projects, recurring work, or part-time contractors, we can assemble the experts you need to grow your company.

Latest on Entrepreneur