Programmatic Targeting: How To Effectively Reach Your Audience?

Every brand should know its audience by heart to run ad campaigns effectively and efficiently. This is key for crafting highly relevant ads, delivering the message to the right people, and increasing the chances they’ll find it appealing.

Otherwise, you’re just wasting your ad money on people who are likely not interested in what you have to offer. Or, as the popular marketing saying goes, “If you’re targeting everyone, you’re actually targeting no one.”

As for programmatic advertising, it offers a variety of targeting options that can help you reach diverse audiences across multiple advertising channels.

Let’s dive deeper into programmatic targeting, learn how it works, and what targeting tactics you can use to spread the word about your business.

What is programmatic?

Programmatic advertising is one of the digital advertising types that allows advertisers to buy ad space using automated technology. Meanwhile, using programmatic, publishers can sell their available ad slots and monetize their websites more effectively. 

It can be done in several different ways:

• Open Auction (RTB): In an open auction, multiple advertisers compete to win ad slots on publisher’s website for the best price. The higher bidder wins the auction and the ad is displayed.
• Private Marketplace (PMP): PMP is similar to Open Auction, only the auction is not really open. Instead, publishers offer their ad inventory to an invited group of advertisers that compete to win them for the best price.
• Programmatic Guaranteed: Programmatic Guaranteed allows advertisers to reserve ad inventory directly from publishers with a guaranteed number of impressions at a fixed price. Then, the inventory is designated for a particular buyer and they are obliged to buy it.
• Preferred Deals: PD is similar to Programmatic Guaranteed – advertisers and publishers agree on a fixed price, and the advertiser gets a priority to bid at the agreed price. If denied, the publisher can sell this inventory at open or private auctions.

Automation, large sets of data, and algorithmic tools are among the main things that differentiate programmatic from other, more traditional ways of media buying. 

However, this doesn’t mean that programmatic doesn’t require a human touch – there are still some things that need to be created or added manually (like Insertion Orders), but it still frees up advertisers’ schedules, leaving more time for optimizing ad campaigns in real time for the best results.

3 types of data used for programmatic targeting

When you browse the internet, you typically leave behind a trail of data about your recent activities that companies collect, store, and later use for advertising purposes.

This can include anything from using a search engine to making a purchase on some online store. 

Depending on their advertising goals, brands can either use only one type of data (e.g., behavioral, like pages a user visits, products viewed, or content checked) or a combination of different information to reach their potential customers.

Typically, there are three types of data used for programmatic advertising.

First-party data

First-party data is data that a company collects directly from its own customers or website visitors. 

It can include information such as purchase history, website interactions, or demographic data that a customer agrees to provide directly to the company (typically by accepting a cookie storing policy on their website).

First-party data is the most valuable as it’s unique to each company and can be used to create more personalized experiences and precisely targeted advertising campaigns.

Second-party data

Second-party data is data that one company collects and shares with another for mutual benefit. Or in other words, data that you acquire from your trusted partner. 

For example, a company might share its first-party data with another company that has a complementary product or service to reach a broader audience. 

Second-party data is also considered to be of high quality because it comes from a trusted source, but it can sometimes be limited in scope compared to first-party data.

Third-party data

Third-party data is collected by a third-party provider specializing in collecting and aggregating data from multiple sources, like apps and websites. Examples of those can be demand-side platforms (DSPs), data management platforms (DMPs), third-party data marketplaces, and similar.

Third-party data can include demographic, behavioral data, and other information that you can use for targeting purposes. Since it’s collected from many different data sources, it’s often less accurate than first and second-party data, but it can be useful for filling in gaps in a company’s own data.

Most common programmatic targeting types

Reaching target audiences is one of the key purposes for gathering these insights as it can help to learn who they are, how they behave online, and what they’re interested in.

It’s often better to narrow down your audience to people who are more likely to interact with your offers and convert, and this can be done based on multiple criteria.

Here are some of the most common programmatic targeting types you should know and use.

Demographic targeting

Demographic targeting is a targeting type that focuses on reaching people based on their specific demographic characteristics, such as:

• Age
• Gender
• Income
• Parental status
• Location
• Occupation
• Marital status
• Education, etc.

Demographic targeting is based on the idea that groups of people that fall under a certain demographic “definition” might have similar interests and preferences. By targeting these groups, advertisers can improve the relevance and effectiveness of their campaigns.

For instance, a company specializing in coffee-to-go may want to target people between 18-35 who live in urban areas, as they are more likely to be on the move/in a hurry.

Advertisers can use demographic data to create detailed profiles of their target audience and tailor their offers to particular interests and user preferences. This can lead to higher engagement and click-through rates, possibly resulting in higher revenue.

Demographic targeting example: ABC Extra Stout

Stout beers are mostly associated with older generations since they are stronger, dark, and heavy-bodied. ABC Extra Stout, one of the Heineken-owned beer brands, was not an exception.

The brand, which wanted to change this perception, has gone through a rebranding, positioning ABC Extra Stout as a drink for a new generation of buyers. Therefore, together with Eskimi, it ran an in-game advertising campaign, targeting 18+-year-olds where they are – playing mobile games.

Besides hitting campaign’s KPIs, ABC Extra Stout managed to reach more than 63% of players between the age of 18 and 34, fulfilling the company’s goal.

Behavioral targeting 

‍Behavioral targeting is a type of targeting that involves analyzing users’ online activities and using that information to deliver personalized offers. Simply put, it considers what a user does while browsing the internet and allows brands to use this information to craft highly relevant ads.

Typically, it is done by collecting and analyzing such data as:

• User’s browsing history
• Search queries
• Purchase history
• Searches within specific sites or pages viewed
• Content checked
• Interaction with site elements, etc.

This way, advertisers can better understand how people they are trying to reach act online and how to use this data to bring them value with the company’s offers.

For example, if a user frequently visits websites related to beauty topics, you can use this information to promote your cosmetics brand, beauty salon, or other relevant products or services.

Another example could be identifying when your target audience is the most active online (e.g., stay-at-home moms) and using daypart targeting (a subtype of behavioral targeting) to reach them when the chances they will act are the highest.

Since behavioral targeting is focused on specific user behavior (hence the name), it can help create ads that better resonate with the audience’s interests, therefore, create better user experiences.

Contextual targeting

Contextual targeting is often mixed with behavioral targeting, however, these two targeting types have one fundamental difference.

While behavioral targeting focuses on previous website visitors' behavior, contextual targeting considers only the content they are currently engaging with online. 

In other words, if you’re reading an article about where coffee beans come from, you can become a target for coffee-related product/service ads.

In contextual targeting, advertisers use keywords, topics, or categories to identify a website's context and then deliver relevant ads. 

One of the biggest benefits of this targeting type is that it is often less intrusive than other forms of targeting because it doesn’t rely on personal user data. Moreover, it can help reach users who have just gotten interested in a particular topic but haven’t performed any searches or made purchases, therefore, it’s too soon to use behavioral targeting on them. 

Geotargeting

As you may have noticed by now, all these targeting types have straightforward names that describe their focus, and geotargeting is not an exception.

It’s a targeting strategy that revolves around delivering ads to users based on their physical location. It means that advertisers can target specific countries, cities, districts, objects (e.g., supermarkets), etc.

Geotargeting is sometimes referred to as geofencing, and although these terms are similar and often used interchangeably, they are not the same thing.

Geofencing falls under the umbrella of geotargeting and is used to target all users who enter a specific, often relatively narrow area by “drawing a virtual fence” around it. Meanwhile, geotargeting usually focuses on a wider area, like countries and regions, and enables businesses to refine their audience by adding additional parameters besides place.

Among the key benefits of location-based ads is the possibility of delivering ads that are tailored to the local market. For instance, a hairdresser might use geotargeting to deliver ads promoting their services to people who are in the nearby area, or a farmer may promote their organic produce to potential buyers in a specific city.

Tech/device targeting

Device, or tech targeting, is a targeting type that allows advertisers to deliver ads to users based on several device-related factors, such as:

• Specific device they’re using to access the internet (desktop, mobile, tablet)
• Device brand and model
• Device price range
• Operating system
• Operator
• Browser and other data points

Device targeting can be used to optimize ad delivery based on the device's characteristics, e.g., tailoring ads for mobile devices with smaller screens than desktop devices or identifying users’ purchasing power. 

If an advertiser wants to deliver high-quality video ads, they can also use this targeting type to tailor such ads to the capabilities of users’ devices; meanwhile, simpler image ads may go better with older devices and slower internet speeds.

Retargeting

Retargeting falls under behavioral targeting, but it’s an important targeting type that deserves to have its tiny paragraph.

Retargeting is an advertising technique that enables brands to show their ads to users who have previously shown interest in relevant topics and visited particular sites or apps. 

Retargeting works by tracking the behavior of website visitors using cookies or pixels. Then, it allows displaying targeted ads to those users as they browse the internet. 

For example, if a user checks some sports website, s/he may see a sports brand serving them relevant ads.

Retargeting is also one of the ways to increase brand awareness and customer loyalty by keeping your brand top-of-mind for potential customers. Moreover, it helps boost conversions by targeting people who are either interested in specific areas or have already shown interest in your product or services.

Reach your audience where they are

If you want to reach your ideal audience and do it with precision and efficiency, programmatic advertising is the way to go.

From demographic to tech, it comes with a wide variety of targeting types that each have its own advantages and can be customized to fit specific campaign and company goals. 

Knowing what’s out there and the possibilities programmatic targeting can offer can help you maximize the effectiveness of your campaigns, provide more personalized experiences for your potential customers, and increase your ROI.

Looking to launch a highly targeted programmatic campaign? Contact the Eskimi team or book a demo for a smooth start.