Smaller companies are still looking for ways to take more control over their campaigns in order to eliminate spending and rapidly adjust campaigns according to their quickly-changing objectives.

Programmatic was created to simplify advertising and turn it from a costly and time-consuming procedure into a transparent and automated experience. It’s time to find out whether programmatic can be useful for SMEs and what strategies should apply to effectively distribute costs and set campaigns for success.

Addressing unique needs and struggles of SMEs

SMEs are the drivers of world economies as they comprise at least 90% of all businesses globally – small businesses keep the emerging markets afloat. This sector is the most susceptible to changing consumer behavior and tastes, and that’s why small companies are always the first to innovate and deliver ground-breaking products and services to the market.

SMEs are very adaptable and flexible compared to big companies, which are not prone to quick changes and transformations. However, SMEs have their own struggles that mostly revolve around limited budgets and the inability to amplify their brand voice amidst tough competition.

Since small and medium enterprises work in ever-changing realities, and with quickly changing objectives, they also require an agile approach to branding and performance marketing strategies. Simply, entrepreneurs need to be able to make changes to their ad campaigns as soon as they arise – communication with vendors and agencies, meanwhile, can significantly slow this process.

The automation, measurability and simplicity of programmatic promises to democratise advertising for SMEs and solve major problems companies may encounter. The stats, below, prove that – today – programmatic is the most popular route for media-buying, and there are a couple of solid reasons for that.

Five reasons why SMEs benefit from programmatic

According to the stats delivered by Statista, programmatic ad spending reached $129.1 billion U.S. in 2020; in 2021, it is expected to hit $155 billion. Today, programmatic ad spending makes up almost 70% of total display spending altogether in some countries, like the UK, it accounts for 93.6%.

The programmatic advertising ecosystem includes several advertising platforms, each of which takes part in the ad serving process. This ecosystem may seem complex; however, its ultimate aim is to simplify the advertising process, making it easy to handle – even for non-professionals.

Using a convenient dashboard of the programmatic buying platform (typically demand-side platform), SME marketers can adjust necessary conditions for the campaign (targeting, budget distribution, channel, etc.). The platform automatically selects the appropriate placement for the ad and bids for the impression (if it corresponds to the chosen campaign criteria). This way, programmatic helps SMEs to serve ads only to the right audiences at the right times and channels. The benefits that programmatic delivers help to address the majority of struggles small companies typically face:

●  Saving ad budget. With targeting (geo, age, OS, language, etc.), ads are only shown to the appropriate audience, which increases the chances of conversions. It prevents brands from spending money on impressions to people who will unlikely find the offer relevant to their needs. Additionally, demand-side platforms are self-served, which means that no additional cost for campaign management is charged.

●  Reaching the right audiences. Competing for user attention is much easier when the offer is relevant. With programmatic, small companies can target audiences worldwide or show ads only to people who stay near their physical stores (applying geo-targeting).

●  Changing campaign course quickly. In the dashboard, programmatic campaigns can be continually monitored, changed and adjusted at any given moment. Real-time campaign analytics will help small companies understand if their campaigns perform well; if not, it is easy to make timely optimisation.

●  Saving time. Programmatic advertising minimizes human interaction and thus the time required to arrange ad placement. The system automatically bids on the right impression and places the ad at the suitable digital inventory.

●  Connecting to global publishers. For SMEs that sell their goods and services internationally, programmatic is very beneficial, as it ensures global reach across multiple ad networks and myriads of programmatically connected publishers.

How can SMEs start with programmatic?

The fact that programmatic doesn’t require companies to invest large budgets in purchasing bulk inventory is what makes it very convenient, especially for SMEs with limited budgets. Basically, all that company needs to do is register an account at the demand-side platform, fill in the budget and configure campaign settings. The minimal campaign deposit is also flexible so that advertisers could deposit sufficient sums according to their objectives.

Starting off with programmatic is a fairly easy task; however, there are several tactics that we advise following to achieve better performance. The following ones will be especially relevant to SMEs:

Five principles of programmatic advertising for SMEs

Choose the right type of deal – RTB/PMP. We suggest companies learn about real-time bidding and alternative programmatic deals to choose the one that suits their purposes best. At private marketplace deals, for example, publishers sell exclusive inventory unavailable at RTB auctions. At the same time, RTB offers more affordable inventory pricing and easy auction joining for advertisers. Oftentimes, one DSP offers access to all kinds of deals, so it’s important to choose a suitable one.

Choose the pricing model. CPM (cost per 1000 impressions) and CPC (cost per click) are the most popular pricing models in programmatic advertising, and it’s important to consider all pros and cons of each before making a final choice. CPC is very convenient since you pay for the results – clicks on your ads.

At the same time, the CPM model is more affordable and used more often for branding campaigns. For a brief comparison: (e.g.) 50 clicks cost $10 (CPC) and 1000 impressions cost $10 (CPM). It means that you get strictly 50 ad clicks for $10 (CPC).

Still, theoretically, you can get up to 1000 ad clicks for this same price with CPM. For this reason, don’t neglect ad creatives – the more engaging it (and the offer) is, the more clicks it will generate with CPM pricing.

Use your data. Self-serve DSPs already have in place effective targeting mechanisms and access to user data. However, there is third-party data available to all participants in the ecosystem. If you can bring first-party CRM data to the table, it opens a gateway to more sophisticated granular and precise targeting. SMEs that use their own data and connect them to programmatic platforms gain an ultimate competitive advantage when it comes to targeting.

Configure the budget. No one wants to spend their ad budget in one day, so setting a limit can be very important, especially for SMEs. On DSP, you can typically set a daily limit and total limit (counted in impressions or dollars). This way, for example, you can instruct the system to stop bidding when daily spending hits $100 or stop bidding entirely after total spending hits the $4,000 mark. In the same way, you should also use frequency capping to limit the number of impressions (shown to one user per day). This will prevent ad irritation along with overspending.

Apply retargeting. If your company has a small budget, a good tactic would be retargeting your audiences. When you notice that conversions increase, it’s also a good practice to use “combination campaigns” – addressing existing audiences with retargeting and reaching new ones with branding campaigns. This way, you will draw in new audiences while also retargeting those who didn’t convert in the first place.

Additionally, attracting the attention of local residents is, as a rule, very important for small businesses. Coffee shops, beauty salons, flower stores – all of these need promotion but cannot afford outdoor advertising, especially during a lockdown, when it is no longer effective. In this case, SME advertisers can launch geomarketing campaigns and configure geotargeting on programmatic platforms to show ads only to the users who stay or live nearby their physical stores.

Wrapping it up

The role of SMEs in economics can’t be underestimated but, most often, the marketing budgets of these companies are trapped in the gap of insufficient funding. Apart from that, small companies need a more flexible approach to advertising and need to directly manage their ad campaigns and align them with ever-changing business objectives. Programmatic platforms don’t require companies to have strict budget sizes. They automate the ad serving, making it more affordable and helping SME advertisers to directly impact and magnify the outcomes of their campaigns.