What is Programmatic Advertising? Plus, 9 Tips on How to Get Started

By Stewart Gandolf, Chief Executive Officer

The digital advertising industry is constantly evolving. 

One major evolution is in the way people buy ads in the first place. 

The traditional method was a manual, complicated process. 

But recent technological advancements – such as programmatic advertising – have improved and automated the way people buy and sell online ads.  

Programmatic digital advertising is a type of data-driven marketing that gives healthcare executives access to an extensive network of relevant publishers and total visibility over their campaigns. 

Using automated software and artificial intelligence (AI), key stakeholders can see exactly where their ads appear, who’s seeing them, and how profitable they are in real-time.    

According to survey data released from Press Ganey, 51% of 1,000 respondents said they used the internet to research and select a new primary care provider, a statistic that’s steadily increased over the last three years.

Is your organization taking advantage of programmatic advertising to increase brand awareness, drive more traffic to your site, boost engagement, and grow your business?

In this blog post, you’ll learn:

What is Programmatic Digital Advertising?

Programmatic digital advertising is an automated process of buying and selling ad space across thousands of online websites, apps, and other digital properties. Businesses in every industry, including healthcare can use this type of advertising to promote their products and services to potential customers across the web. 

In the healthcare industry, programmatic advertising allows organizations and medical marketers to leverage user behavior and display relevant ads to anyone who has searched for or interacted with content related to the services they provide.

You can use this method to target audiences, using one or more of the following tactics:

  • Audience targeting (gender, income, age, interests, etc.)
  • Cross-device targeting (mobile, laptop, tablet)
  • Contextual targeting (relevant ads alongside related content) 
  • Behavioral targeting (shopping habits, website interactions, product interests, etc.)
  • Geotargeting (location-based targeting)
  • Retargeting (e.g., relevant ads based on past website or landing page visits)

Understanding programmatic advertising can be fairly complicated. Let’s answer the question, “What is programmatic advertising?” by looking at the two key players: publishers and advertisers.

Publishers

Publishers (e.g., websites & apps) use tools called ad exchanges (SSPs) to help monetize the space they’ve allocated for digital advertising. Advertisers then purchase this ad space to market their products or services.

When a consumer visits the publisher’s site or app, the SSP serves up personalized, relevant ads based on predetermined criteria from the advertiser. When they click on an ad, this action generates revenue for the publisher and drives new traffic to the advertiser’s website. 

Advertisers 

Advertisers (brands) purchase available advertising space on demand-side platforms (DSPs). DSPs are media platforms that businesses, and agencies use to set up their ad campaigns. Once the advertising campaign and creative are uploaded to the DSP, the software searches its entire network of publishers for sites and mobile apps that best fit the advertiser's criteria and makes a real-time bid for placement. Once an ad is chosen, it gets served to the publisher's website or app.

This entire process occurs in real-time, using data insights and algorithms to serve curated ads to the right user at the right time and price point. 

Programmatic advertising allows hospitals, addiction centers, or multilocation practices to scale their advertising quickly and affordably by eliminating all manual work typical of direct buy advertising. While there is still plenty to consider (strategy, creative, media buying, ad placement, performance tracking, and campaign optimization), brands can create a single ad, sign up with a DSP, choose their target audience, and let the platform run their campaigns. 

Direct Buying Versus Programmatic Advertising

Programmatic advertising takes direct-buy advertising to the next level. Direct buying means businesses approach publishers (e.g., newspaper, a magazine, or a website owner) one at a time to request their media kit. Among other things, media kits include specifications on digital ad options (size, placement, pricing), so businesses can find one that best fits their budget. 

Next, businesses submit a proposal to each publisher to negotiate terms for ad space, placement, and the number of ad impressions. Not only does this require a lot of back and forth between brands and their list of publishers, but it’s also costly and inefficient.

With programmatic advertising, advertisers can leverage machine learning and artificial intelligence (AI) technologies to automate their ad buying from thousands of publishers in real-time. This strategy also means advertisers can significantly expand their reach and optimize ads on the fly with automated reporting of real-time data.

Benefits of Programmatic Advertising for Healthcare Brands

In the past, Healthcare companies relied heavily on traditional advertising to increase brand awareness and generate revenue. While offline strategies and tactics still have a place in any company’s marketing mix, today’s peri-pandemic healthcare consumers expect more from their online experience. They want more access, more options, and more flexibility. Digital advertising in the healthcare and pharma industry was expected to grow by 14.2% in 2020; however, actual spending far exceeded these estimates. In 2021, 88% of all digital display marketing in the US was spent on programmatic advertising.

This means healthcare brands need to beef up their online marketing efforts and increase digital ad spend to meet growing expectations. 

Programmatic healthcare advertising offers four powerful benefits:

1.     Increased ad efficiencies

Programmatic advertising streamlines manual processes (e.g., calling, negotiating, contracting, optimizing, and analyzing) into a single platform, shortening campaign launch time and giving healthcare brands visibility on millions of quality sites. This expands audience diversity far beyond manual capabilities. Programmatic advertising also gives healthcare brands the ability to leverage unique data sets (first- and third-party) and collect better insights to leverage consumer behavior.

2.     Increased cost efficiencies

Real-time reporting and analytics on ad performance, average cost-per-bid, and average cost-per-click help brands reduce their overall advertising costs and achieve higher ROI.

3.     More media buying transparency

Before programmatic advertising, brands had minimal insight into their campaigns. Thanks to DSPs, healthcare brands can see actionable campaign data in real-time (e.g., placement, performance, and cost).

4.     Real-time audience targeting

Optimize, target, and engage with audiences wherever they are:

a. Location-based targeting (e.g., geofencing, event targeting)

b. Contextual targeting (e.g., keywords, metadata)

c. Site retargeting (e.g., relevant ads based on search history)

d. CTV/OTT (Connected TV or “over the top”), e.g., advertisements on Hulu

e. Cross-device targeting (e.g., desktop, mobile, connected TVs or other devices)

Common Goals You Can Reach with Programmatic Advertising

Programmatic advertising helps brands reach users across multiple devices with the ability to follow specific audience segments wherever they go. 

Together these help healthcare organizations:

  • Increase brand awareness
  • Promote traffic to your website
  • Provide insight into your audience
  • Reach and target new audiences
  • Boost ROI and advertising metrics
  • Decrease overall ad spend
  • Increase ad visibility
  • Support paid search and other advertising efforts

9 Tips to Get Started with Programmatic Advertising 

Programmatic advertising is one of the most efficient, cost-effective, customizable, and data-driven methods of buying paid media, but algorithms alone won’t get you the best results. 

Here are nine tips to help your healthcare organization get started:

1.     Choose the right partner.

If you’re interested in growing your business with programmatic advertising, consider partnering with an agency (or hire an in-house expert) with industry-specific experience and expertise. Programmatic DSPs are complicated and often difficult to master. When algorithms are combined with human expertise, ad campaigns will outperform the DSP’s auto-optimization every time.

2.     Prepare, set goals, and get creative.

Once you’ve selected a programmatic digital ad partner, it’s time to do a little research, define your business goals, and develop a creative strategy. In most cases, your business goals will determine your campaign settings. For example, if your goal is to increase website traffic, you’ll want to select less specific targeting parameters and develop broad messaging that appeals to larger audiences.

3.     Stay HIPAA compliant and ethical.

While programmatic advertising is a very powerful tool, you’ll need to make sure you do not inadvertently violate HIPAA or privacy requirements surrounding various sensitive diseases. Some programmatic strategies that are perfectly acceptable in other industries must be modified in healthcare.

4.     Define a data-driven strategy.

Programmatic ads require high-quality data to successfully target customers and drive sales. You can inform your campaigns and target customers using three data types: first-, second-, and third-party.

a. First-party data
Information gathered directly from customers (e.g., search history, lead forms, social data, survey results, customer feedback, etc.).

b. Second-party data
Someone else’s opt-in first-party data that can be purchased.

c. Third-party data
Access to third-party data will be eliminated in the near future; fortunately, many healthcare organizations do not heavily rely on it. Third-party data includes information from large data aggregators (e.g., Google, Facebook, etc.) that pull data from various sources.

5.     Choose your ad format.

The possibilities for creative formats are endless. Hospitals, medical providers, or pharmaceuticals can bring ad campaigns to life through display, video, native, and CTV (streaming) formats. Your healthcare marketing agency or partner can recommend the best ad formats based on industry knowledge, current trends, available budget, and business goals.

6.     Build your targeting.

Define buyer personas and build your audience from a range of criteria, including age, gender, education, income, ethnicity, interests, etc.

7.     Define targeting options.

Use data and pre-defined goals to ensure your ads reach the right audience. Here are some of the most common targeting tactics:

a. Behavioral targeting
Identify individuals across multiple devices based on demographics (e.g., age, gender, income), behavioral attributes, intent, or other interests.

b. Custom site lists
Layer behavioral targeting with a list of targeted websites or apps to optimize your target audience further.

c. Customer lists
Purchase first-party data from another resource and target them directly.

d. Retargeting
Re-engage users who have previously visited or taken specific actions on your site.

e. Geofencing
Target individuals within a specific geographic perimeter (e.g., event, zip code, or other places of interest). For example, medical practices can use geofencing to target people who work in companies known to carry the types of insurance they accept.

f. Contextual and keyword targeting
Display ads based on website content. For example, ads may service on sites such as Vitals or Healthgrades.

g. CTV/OTT
Attract new audiences using instream or outstream ads on popular TV shows, YouTube videos, or video games.

8.     Measure your goals.

Measuring programmatic ad campaigns is crucial for ensuring you’re reaching the right audience and maximizing your digital marketing budget. 

What you measure will largely depend on the goals you’ve defined, but here are the most common metrics:

a. Return on ad spend (ROAS)
The amount of money your business earns in revenue for every dollar spent on advertising.

b. Clicks and cost-per-click
The number of clicks your ad gets divided by the total cost of the campaign.

c. Conversions and cost-per-conversion
The number of users taking a specific action after clicking on your ad divided by the total cost of the campaign.

d. Session duration
How long a user stays on your site after clicking on your ad. This metric helps determine how engaging your website is to your audience.

e. Bounce rate
If someone clicks on your ad and leaves your website without visiting other pages, that’s considered a bounce. High bounce rates can indicate a technical problem, incorrect audience targeting, or a misaligned message.

9.     Optimize and improve your campaigns. 

Altering your ad campaigns based on available metrics will improve the quality and effectiveness of your ads over time. Continually monitoring and optimizing your ads can mean the difference between earning revenue from your campaigns and losing ad spend on advertising that falls flat.

Partnering with a professional agency or hiring an in-house expert for your healthcare programmatic advertising will give you the speed and expertise you need to develop, monitor, analyze and optimize advertising campaigns that achieve your business goals.

Book cover for The 7 Deadly Sins of Healthcare Marketing
The 7 Deadly Sins of Healthcare Marketing Free E-book and Newsletter

Marketing a healthcare organization can be challenging - even painful if you don't approach it with the right knowledge, tools, and guidance. By reading about mistakes and lessons others have learned the hard way, you can boost your marketing effectiveness and take a shortcut to success. Discover how to avoid these "Seven Deadly Sins". Plus, join over 30,000 of your fellow healthcare providers with a free subscription to our Insight Newsletter.

Get it Now
© 2022 Healthcare Success, LLC. All rights RESERVED.