The last decade or so has proven to be one for the books when it comes to technology. Artificial intelligence, automated learning, and cloud-based services have changed the way we do business and even interact with other humans.
It has also drastically changed the way businesses market their products to people by allowing for programmatic marketing, which is basically a fancy way of saying automated advertising.
Programmatic marketing has revolutionized the way brands advertise their products. With the ever-changing digital landscape and modern technology, advertisers are able to distribute their ads to their target audiences quickly, efficiently, and easily.
Out of the rapidly evolving technological landscape came various ad tech platforms that use machine learning algorithms to connect advertisers with publishers within a matter of seconds. It has streamlined the process of placing ads with publishers, making it easier than ever to place ads on millions of blogs, online magazines, and apps.
As far as marketing and product movement go, programmatic advertising has served as a proverbial fuel to the digital ad space fire.
Payments made between the advertising brands, ad networks, and publishers are often too complicated for anyone to ever earn their money in a timely manner.
What’s worse is that mistakes are often made and fraud is a sub-industry within programmatic marketing that has all but clogged up the pipeline that sends cash to both brands and publishers alike.
To alleviate this problem and get cash flowing once again, various mass payout systems have popped up throughout the industry, Tipalti included.
In this article, I’ll break down programmatic advertising, its benefits and drawbacks, and how to improve payments between advertisers and publishers. By the end, both advertisers and publishers can make better-informed decisions as they are choosing ad tech platforms for their programmatic advertising needs.
Programmatic Advertising 101
Programmatic advertising simply refers to automated software that connects advertisers with publishers.
These publishers sell their valuable ad space to the advertisers through various ad networks, such as Google Adsense and Revcontent, that use an algorithm to connect advertisers with relevant publishers.
The publishers, made up of websites and apps, put up their ad space on the ad networks for advertisers to bid on. Depending on the agreement, publishers are paid based on visitor behavior metrics, such as impressions (views of the ads) or clicks on the ads.
When these metrics are met, like, let’s say 1,000 clicks by visitors on the ads, the advertisers pay the publishers.
The ad networks serve as the go-between to organize it all.
Compared to traditional advertising methods, it has helped make contracts and agreements a seamless endeavor where advertising and cash flow are automated and immediate.
Like I said, fuel to the digital ad space fire.
Programmatic Ad Tech Platforms
There are several different types of platforms used for programmatic advertising and marketing. While there are a few key differences that separate them from one another, they function in similar ways.
They automate the process of connecting advertisers with publishers.
The primary ad tech platforms that most advertisers and publishers work with are ad networks and affiliate networks.
Affiliate networks are great for websites and bloggers who have a dedicated audience. The authors of these sites can earn a commission of each sale made through the links that they provide.
Amazon Associates is perhaps the most recognizable affiliate network that makes the process of affiliate marketing easier than ever.
The ad types are fairly diverse, ranging from banner and text ads, social media marketing, search engine optimization, and email marketing. The affiliates get to choose which ads they want to promote, where they want to promote them, and when they want to place the ads.
This gives both the affiliates and the advertisers tremendous control in knowing where the ad is running and on which websites.
While there is no direct audience targeting by the advertisers, meaning that the affiliates can choose to place ads without first being approved by the advertisers, it allows the advertisers to sit back and let the affiliates do all of the heavy lifting.
They choose the ads, place them, and commit their efforts to make sales on behalf of the advertisers.
Advertisers pay commission based on various metrics, such as leads, impressions, or sales. The commission varies greatly, depending on the brand that is advertising and what kind of audience the affiliate has to offer.
Ad networks, like affiliate networks, measure impressions and clicks in order to determine payments. This, however, is where the similarities end.
The ads generally come in the form of banner and text ads, though are automatically placed on publisher sites as determined by the algorithm of the ad network.
Just like any digital network with an algorithm, this strips all users of any power they might otherwise have in their marketing efforts.
Though advertisers cannot hand-pick the publishers they are working with, they can specify their target audience before releasing their ads to the networks. The target audience is often determined by the demographics of online users, such as location, education level, gender, age, and online behavior.
As far as payments go, there is little flexibility in paying the publishers as everything is automated by the ad tech platforms from which they are connecting with publishers.
Even so, the ad tech platforms must find a way to collect and distribute payments in a timely and legal manner.
While many have made their best efforts to do so, a culture of late payments and corruption has developed within the industry, getting in the way of all of the massive potential that programmatic advertising has to offer.
Main Pain Points of Ad Tech Systems
As revolutionary as many of the ad tech platforms are, they are riddled with problems that often prevent publishers and advertisers alike from achieving their goals.
The onboarding process for gathering partners heavily relies on single data entry of partner profiles, including sensitive payment information and tax documentation. From there, transactions are manually inputted into banking portals and checked by humans before payments are able to be processed.
As you can imagine, this makes the entire system highly error-prone with very little data validation.
As brands and companies begin to grow, leading to more digital ads and traffic, payments grow along with it. This rapid growth often outpaces the ad tech companies and their ability to process payments efficiently and securely.
It also hinders transparency in payments and allows more room for fraud, such as bots designed to simulate fake clicks and impressions of the ads, to slip through the cracks more easily.
As a result, advertisers begin paying massive sums of money for ads they’re not quite sure are effectively being placed and publishers are left nervously awaiting their next payments.
Though technology is evolving at an unprecedented pace, many companies are growing frustrated with their inability to calculate the return on investment (ROI) and turn hard data into valuable insights. Without the ability to analyze the data, companies are unable to determine if they are spending their money in the best way possible.
And every business owner knows the importance of not spending money where it’s not warranted.
Mass Payout Systems Provide Solutions
With the advent of technology over the past several decades, users have become accustomed to receiving information, products, services, and payments with the single push of a button. Naturally, advertisers and publishers expect immediate payment solutions and information about payments, as well.
Just like technology has made advertising and marketing faster and easier than ever before, it has also sprouted payment solutions within the advertising industry.
While speed and ease are certainly qualities businesses are looking for in their payment solutions, there are far more benefits to a modernized payment infrastructure than ‘fast’ payments.
Modernized payment platforms not only increase the speed at which payments can be distributed, but they also eliminate a lot of the workload and errors that traditionally come with human-led payment solutions.
A global payables operation, such as the cloud solution provided by Tipalti, improves the overall partner payment experience in a multitude of ways.
Including, of course, how quickly payments are made.
Mass payments allow advertisers and ad tech systems to validate payments immediately and significantly reduce human-made errors that are common in rapidly growing e-commerce and advertising systems. Not only are human-made errors significantly reduced, but also much of the payables workload that comes with it is reduced by up to 80 percent.
This frees up both time and money for advertisers, publishers, and ad tech companies to further grow their businesses and increase cash flow.
The real-time data collected along the way allows advertisers and publishers to quickly determine if their partnerships are providing the greatest ROI or if new partnerships should be made in their place. It also allows for clean and easy tax compliance, which can often be a nightmarish battle for fast-growing businesses and websites.
And as businesses continue to grow, the automated mass payout solutions are able to grow with them.
All of this together provides a tremendous amount of trust in the automated global payables operations, making it easier than ever to attract and retain partners. The easier it is to attract and retain partners, the more that your business can grow.
Technology has changed the way that we do virtually everything. While it has certainly propelled us into a new world of convenience and immediate rewards, it also comes with quite a few bugs that can get in the way of reaching its full potential.
Luckily, there are many technological solutions to address them.
The same goes for programmatic advertising and mass payout solutions. Businesses and advertisers who are looking for safe and efficient ways to market their products can now look for ad tech systems that use secure automated mass payout systems. As technology advances and businesses grow, these automated payment solutions will advance and grow with them.
This lets businesses continue to run their businesses and let the software do all of the advertising.
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