Choosing between various media buying options to monetize your app is one of the concerns that keep many publishers up at night, especially if you have a specific ad budget and don't want to waste a single dollar. Programmatic or Direct Advertising? Which should you choose to maximize your ad revenue and avoid disappointments? The good news is that both are super effective, and the best part is that there isn't one that is absolutely superior to the other. It all depends on what you need.
Let's resolve all your doubts about which one to use in your mobile monetization strategy! In this post, you will learn how they work, as well as their benefits and drawbacks. Of course, we'll also tell you which one to choose if you're looking for a good eCPM. Ready to get started?
What is programmatic advertising?
One of the big current dilemmas could be how many ads we see daily, no matter what device we're on (smartphone, TV, laptop), the app we're using, or what time we're consuming this service, we'll always be exposed to other people's advertisements, even without realizing it.
In this regard, if we told you that many of these ads are specifically programmed for us, would you believe us?
Hopefully, the answer is yes, because that's largely what programmatic advertising is about.
It's a technique that connects publishers with advertising platforms, i.e., digital environments where your ads or those of anyone else will be shown to reach a specific audience.
Programmatic advertising then uses technology to automate the buying and selling of digital advertising space.
For appearing in these display windows, automatic bids are created that will determine the price or value of that exposure, something that happens in real-time, using data to decide which ad is most suitable to show to a particular user.
You can think of this as an auction. Advertisers must set parameters for their target audience, define it, segment it, and also establish how much they are willing to pay for an impression (each time their ad is shown).
Then, users are automatically analyzed in real-time, and bids are made in auctions for impressions that match those parameters. All this happens in less than a second.
What is direct advertising?
Direct advertising or direct ads have a clearly differentiated behavior from the previous technique.
To understand it, we invite you to visualize yourself browsing the web, entering your favorite news or entertainment page. Suddenly, you find a banner or an ad that feels very close but also invites you to take immediate action, such as following a link or a discount coupon in exchange for filling out a form, among others.
In that case, my dear publisher, let me tell you that you are facing direct advertising, and how many of the same style have you not seen when you are on the internet? I imagine many. It is worth mentioning that it is not the only place where this technique can be applied; it can also be an email or an ad on other media such as social applications.
Therefore, direct advertising is a marketing strategy that focuses on communicating directly and traditionally (with an email or call) with those who make advertising space available on their web pages and thus negotiate the price, the duration of the ad, where it will appear, among other things.
Differences between programmatic and direct advertising
As you have already noticed, in summary, direct advertising and programmatic advertising are two different ways of buying and selling advertising space to optimize your monetization strategies, but they have very different approaches:
Buying process
One of the main differences between these advertising techniques can be seen in the buying process. When it comes to direct advertising, it is a personal negotiation. That is, as a publisher, you communicate directly with the advertiser to agree on the price and location of your ad in that space. It's like closing a deal face to face.
On the other hand, in programmatic advertising, all this process is automated. Digital platforms are used to reach these agreements, to buy and sell advertising space through real-time auctions. The system where these transactions take place automatically generates a bid for the opportunity to show your ad in a fraction of a second.
Precision
In direct advertising, you will have the opportunity to choose specific locations for your ads, such as a specific section of a website or a particular TV program. It is ideal if you want a specific environment to showcase your brand or product.
While programmatic advertising focuses on having a massive reach. It defines who you want to see your ad, you segment your final viewer (for example, sports lovers), and the system automatically looks for the websites on the web where users with the profile you mentioned frequent the most. This way, you reach a wider and more segmented target audience.
Control
A great advantage of direct advertising is the ability it gives you as a publisher to have more control over how, when, and where your ad will finally appear. Leaving much of the success in the correct selection of the advertising space in your hands, thus avoiding your brand from appearing in places that are not convenient or do not go with the values of the brand.
On the other hand, programmatic advertising leaves a much looser rope for digital environments that will automatically take your ads to places that you can hardly track. In this sense, you will have a very large reach but at the cost of having less control over the exact location of your ads, but you can define very well who you want to reach with your ad and there lies the key to the efficiency of this technique.
Programmatic vs Direct Advertising: Which Generates More Revenue?
We've reached that point that interests us all, where we answer how all this knowledge translates into earnings, what the result is, which generates more revenue between programmatic and direct advertising. The answer, as often happens in the advertising environment, is not so simple or 100% exact.
We can say without fear of being wrong that to a large extent the efficiency of these strategies depends on your segmentation capability, knowing your audience, and their behavior. However, platforms like Google have cleared this doubt, at least regarding ads in the digital environment of the search giant.
Through the Google News Initiative, it has been published that it is quite usual for direct ads to be marketed for prices two to four times higher than programmatic ads. In figures, this can mean that the CPM (cost per thousand impressions) of direct ads is on average $10 to $20, while that of programmatic ads is $1 to $5. But don't sing victory, don't just rely on this information. Keep reading about the benefits of one technique and another to realize why in practice the roles in terms of profits are reversed.
Benefits of programmatic and direct advertising
You already know some numbers about programmatic advertising and direct advertising. You are probably already doing the math, or thinking about getting the calculator out. But, we advise you to see these benefits and have a broader perspective of why one technique or the other generates more revenue. We can add that in general, programmatic advertising tends to provide more earnings than traditional advertising for most advertisers. This is due to several factors.
Benefits of programmatic advertising
There is greater efficiency in programmatic advertising because it puts the power of algorithms and data into the hands of advertisers to optimize ad placement, meaning that ads are shown to people who are more likely to be interested in them (i.e., with a higher probability of being converted). This leads to a higher click-through rate (CTR) and conversions, which in turn translates into a higher return on investment (ROI) for advertisers.
You will also find better segmentation. Programmatic advertising allows advertisers to schedule more precisely than direct advertising. This is because advertisers can use a variety of data, such as demographics, interests, and online behavior, to segment and target their ads.
Additionally, you will find that this technique has greater transparency. Programmatic advertising is clearer than traditional advertising. Advertisers can track where their ads are shown and how much they cost, giving them greater control over their campaigns and the product or brand image they want to advertise.
Of course, you also have a greater opportunity to scale. Programmatic advertising offers a wider reach quickly and more accurately than traditional advertising because advertisers can run campaigns on a variety of website and app options, thus reaching a massive audience.
Benefits of direct advertising
A broader but less controlled reach. Direct advertising can have a broader reach, wider than programmatic advertising through mass media such as internet publishers, other entertainment websites, apps, and even traditional media such as TV, email marketing, among others. However, measuring the reach of this audience may be more complicated.
A great advantage of direct advertising, and why we emphasize that choosing one technique or another depends on your goals as a publisher, is that this medium offers greater brand awareness. Placing an ad on a recognized publisher can help with the visibility and trust of your audience since ads are shown to a large and diverse audience, but they are also shown on media perceived as more reliable.
In line with the previous point, we can also mention greater credibility. Direct advertising may be perceived as more credible than programmatic advertising since it is associated with established media that have long built credibility, and therefore those who see it perceive it as reliable.
When to use programmatic advertising vs direct advertising?
If you still have doubts about which one to choose today, we give you additional information to help you understand which of these two techniques is the best for you right now:
Choose programmatic advertising in these cases
We couldn't help but remind you, use this technique when you are looking for reach and segmentation. Programmatic advertising allows you to be more precise by a wide variety of criteria. This is why you can take for granted that it will help you reach people who are most likely to be interested in your product or service.
Additionally, you can consider it when you want to optimize your advertising budget. The algorithms of programmatic advertising platforms allow you to optimize your budget in real-time, you can take actions with a low to moderate investment and still achieve great results.
Choose programmatic advertising if you need to measure the performance of your campaigns indispensably. Programmatic advertising provides detailed reports on the performance of your campaigns, allowing you to measure their effectiveness and make adjustments along the way.
You have no experience in media buying. If you still have a way to go in networking and accumulating contacts, programmatic advertising platforms can facilitate the process for you since they allow you to buy advertising space without necessarily having to interact with the owners or representatives of the pages where your ads will be.
Choose direct advertising in these cases
When you are looking for more control over where your ads will be shown, then direct buying allows you to manually choose where they are displayed.
Direct advertising offers you the opportunity to establish relationships with specific publishers, something that can benefit you if you are looking to reach a specialized audience and even start building a network of publishers and advertising spaces for future advertising actions.
On the other hand, direct advertising tends to have a higher cost than programmatic advertising, so it is a better option for advertisers with high budgets and more elaborate actions.
If you need to generate a greater impact. With this technique, you can afford to place your ads in high-value locations, such as the homepage of a website with a lot of user traffic or a billboard in a privileged area of the city.
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