In the world of digital advertising, there are many terms and definitions that sound rather vague and are often — incorrectly — used interchangeably. For example, you've most likely experienced display ads being unceremoniously equated with banner ads, digital ads getting confused with online ads and video ads having no idea what category to belong to. However, none of this compares to the misconceptions you can find on the Internet about programmatic and display advertising.

As online marketing continues to evolve, it's essential for businesses and marketers to grasp the distinctions between different ad formats and their unique benefits. And if you have wondered about the difference between programmatic and display advertising more than once, then you are in the right place.

Join us on a journey of exploration as we delve into the realm of programmatic ads and display ads, uncover how they differ and determine which approach suits your advertising goals best.

What is Display Advertising?

Display advertising refers to a form of visual ads (banners, images or videos) that are placed on websites, mobile apps or social media platforms to promote products, services or brands. Display ads aim to capture the attention of users and drive them to take specific actions, such as:

  • clicking on the ad to visit a website;
  • making a purchase;
  • engaging with the advertised content.

The effectiveness of display advertising relies on proper ad targeting, compelling creatives and strategic ad placement to reach the right audience at the right time.

What is Programmatic Advertising?

Here is where we tell you advertising’s most open secret: programmatic advertising is not a type of advertising. It is an automated approach to buying and selling ad inventory in real-time through an auction-based system. Its main feature is an advanced algorithm that analyzes user behavior, demographics and interests to target specific audiences and deliver personalized ads.

In its simplified form, the programmatic advertising process looks like this:

  1. Website visit: When a user visits a website, data about the user's preferences, behavior and other attributes are collected.
  2. Real-time bidding (RTB): Advertisers bid on the available ad inventory in real-time auctions, where the highest bidder's ad is instantly displayed to the user.
  3. Ad display: The winning ad is shown to the user in a matter of milliseconds, making the ad content highly relevant and timely.

The main advantage of programmatic advertising is advertisers’ ability to reach the right audience with the right message at the right time. If you're interested in learning more about this undeniably progressive technology, don't hesitate to check out our post on programmatic advertising.

Programmatic Advertising: Pros and Cons

The key benefits of programmatic advertising are:

  1. Precise targeting: Programmatic advertising allows for highly targeted ad placements based on user data, demographics and behavior, maximizing the relevance of ads to the intended audience.
  2. Real-time optimization: With real-time bidding and automated algorithms, programmatic ads can be constantly optimized for performance, ensuring better ROI and ad efficiency.
  3. Access to vast inventory: Programmatic advertising provides access to a wide range of ad inventory from various ad exchanges, giving advertisers more opportunities to reach their target audience across different platforms.

The disadvantages are not so obvious, but among them, we can distinguish the following points:

  1. Ad fraud risk: The automated nature of programmatic advertising can leave room for ad fraud, where fake impressions and clicks may lead to wasted ad spend and inaccurate performance metrics.
  2. Lack of control: Advertisers may have less control over ad placements and where their ads appear, which can lead to brand safety concerns or ad placements on low-quality websites.
  3. Complexity: Programmatic advertising can be complex, especially for advertisers new to the technology. It may require expertise or the use of specialized tools to navigate and optimize campaigns effectively.

As such, the shortcomings of programmatic advertising can be easily addressed, for example, by using ads.txt for websites and app-ads.txt for mobile apps to prevent unauthorized sellers from selling your ad inventory and by taking advantage of ad verification tools and services to detect and prevent fraudulent ad placements.

Based on the main advantages of programmatic advertising, we can conclude that it is especially suitable for those who want to continuously optimize their ad performance based on data-driven insights and for those who are not afraid of modern automated solutions.

Display Advertising: Pros and Cons

Let's collect the key advantages of display advertising:

  1. Creativity and branding: Display ads offer creative freedom, allowing businesses to showcase their brand with eye-catching visuals, videos and interactive elements to leave a lasting impression.
  2. Wide reach: Display ads can reach a vast audience across various websites, social media platforms and mobile apps, increasing brand exposure and visibility.
  3. Remarketing opportunities: Display advertising supports remarketing campaigns, which enable businesses to engage with users who have previously visited their website, increasing the likelihood of conversions.

The disadvantages, however, can seem quite significant:

  1. Ad blindness: Display ads can suffer from ad blindness, where users become accustomed to ignoring or overlooking banner-style ads due to their prevalence on websites.
  2. Ad blocking: Many internet users use ad blockers to avoid display ads altogether, reducing the potential reach of display advertising campaigns.
  3. High competition: The display advertising space is highly competitive, making it challenging for smaller businesses to stand out and achieve meaningful results.

Despite these drawbacks, which have no specific solutions, display advertising remains a valuable tool for businesses to enhance brand visibility and attract potential customers.

Display advertising is a good choice for businesses and marketers looking to reach a broad audience, increase brand awareness and promote products or services visually. It is particularly effective for creating visually appealing and eye-catching ads that can be displayed across various websites and platforms.

Programmatic vs Display: Differences

Aspect Programmatic Advertising Display Advertising
Ad placement Automated, real-time bidding based on data and algorithms Predefined ad spaces on websites or apps
Targeting Precise targeting using user data, demographics, behavior Limited targeting options based on website content or demographics
Ad creatives Dynamic and personalized ad creatives based on user data Static ad creatives with fixed content
Real-time optimization Constantly optimized for performance and ROI Requires manual adjustments and optimization
Cost Bidding model, prices can vary based on demand Fixed pricing for ad space or placements
Efficiency Efficient use of ad budgets, higher ROI potential May result in ad wastage and lower ROI
Ad inventory Access to vast inventory from multiple ad exchanges Limited inventory on specific websites
Automation Fully automated buying and selling of ad impressions Manual buying and selling of ad space

Does The Comparison Between Programmatic and Display Even Make Sense?

In actuality, the age-old programmatic vs display comparative story makes no sense from a logical point of view. That is because the terms programmatic and display refer to entirely different aspects of advertising:

  • Programmatic is a way of buying and selling ads.
  • Display is a form of advertising.

However, if we talk about display vs programmatic not in a comparative but a combined sense, then everything falls into place. They, in fact, intersect, since different types of advertising can be purchased automatically, including display ads.

Many display ads are bought and sold automatically and may therefore be referred to as programmatic display ads, but manually placed display ads obviously can no longer be called programmatic.

When considering the combination of programmatic vs display advertising, it is important to understand how programmatic technology enhances the efficiency and targeting capabilities of display advertising, making it a powerful tool for advertisers to reach their target audience with relevant and personalized ads.

Wrapping Up

So, programmatic and display ads are two essential components of modern digital advertising. Programmatic technology has revolutionized the ad buying process, offering advanced targeting, real-time optimization and improved efficiency. Display ads, on the other hand, encompass various visual ad formats that can be bought and sold through both programmatic and non-programmatic methods.

In essence, programmatic ads and display ads are related, as programmatic technology can be used to automate the buying and selling of display ads. However, they shouldn’t be thought of as the same thing, but even more so, they shouldn’t be considered as opposing components where you can only use one or the other.

To unlock the full potential of effective advertising, regardless of the type and method of purchase, we invite you to join MGID. By registering with us, you'll gain access to top publishers, expert guidance from a personal manager and a dedicated Creative Department to assist you in crafting compelling ad creatives.

Take advantage of MGID to enhance your ad campaigns, reach your target audience effectively and achieve better results. Don't miss out on this opportunity to elevate your advertising efforts to the next level. Register now and experience the benefits of a powerful ad platform tailored to your needs.