Programmatic Advertising VS Traditional Advertising : Which One Drives Better ROI?

As the digital landscape continues to rapidly evolve, debates between traditional advertising and programmatic advertising have shown up frequently across marketers, businesses, and agencies. Businesses in today’s fast world are starting to struggle with decisions about their advertising options, and specifically whether to stick with the methods of advertising that were traditional for decades or begin to look at programmatic ads that offer accuracy, real-time optimization, and delivering ads to the audience that you want, at the right time, more than ever.

At Runtime Solutions, we have had the luxury of existing in both sides of this parallel world – traditional advertising like billboards, radio spots, print ads, and the innovative approach of programmatic ads where everything is highly targeted. Each of these advertising methods comes with its upsides, and just as importantly, you need to know which advertising method is right or best based on your expected return on investment (ROI).

In this article, we’re going to pull apart both sides of traditional advertising and programmatic advertising, providing you insights to help rethink how you think about each advertising strategy

Traditional Advertising: A Legacy of Impact

In the world of advertising, traditional media (while digital media gaining prevalence) has been a solid form of marketing for decades. Advertising on television, print, radio, and outdoor advertising have been an effective method for brands to build their identity and reach mass audiences across vast and diverse geographic areas. With the legacy of traditional media as an effective and credible form of advertising, the question is: how effective is it today compared with the rapidly data-driven advertising world? 

Strengths of Traditional Advertising

• Mass Reach: The mass reach is one of the strongest values of traditional advertising. Prime-time TV commercials, large first-page newspaper ads, and gigantic billboards on very busy highways reach and capture the attention or awareness of thousands of people (and sometimes millions). For campaigns that are focused on building brand awareness, especially in a national marketplace, traditional media is still a smart move and useful. Oftentimes, brands simply need to create a single ad spot to generate massive visibility (and attention), while receiving interest from often broad demographics.
  
• Brand Credibility: There is elevated status from traditional media sources and formats. Being in a print industry or being on television instills a sense of credibility. For example, being featured in a well-known newspaper brings a sense of authority to campaigns. Running an ad on national television or in a reputable print publication brings an air of credibility that’s difficult for digital ads to match. These established media platforms have been trusted for decades, making them an effective tool for businesses aiming to build trust and enhance brand perception.
  
• Memorability: Traditional media, and particularly physicals, advertising often evokes a lasting effect on the people who see it. For instance, when people think about seeing a billboard or print ad, they tend to remember it more since it exists in their environment for a longer period of time. We create emotional connections with traditional media, which encourages stronger recall. A well-made television commercial or an imaginative print ad has a lasting emotional appeal that is more significant than a digital advertisement that you see for a few seconds.
  

Disadvantages of Traditional Advertising

• High Cost, Low Agility: The only disadvantage of traditional advertising is the cost of entry or upfront cost. Whether it is a television ad or advertising in a prime location in a newspaper with the largest distribution, the initial costs are daunting. Not only are the costs higher, but also once you run the ad, you can’t change it. If your ad isn’t resonating with the target audience, it is hard to pivot on the fly when you can’t easily make changes. Lack of flexibility makes traditional advertising less desirable for brands if they move quickly and make real time decisions based on the outcome of the campaign.
  
• General Targeting: Conventional advertising typically focuses on broader demographic-oriented targeting versus direct targeting. With traditional advertising, you may have the ability to select a specific time period on TV, or a specific magazine, to place your ad, but it is not the same granularity as digital advertising. Traditional advertising cannot send personalized messages to the different segments of the audience, which can result in wasted dollars by targeting the wrong people with your message.
   
• Weak Attribution: Analog advertising is not very clear in terms of ROI tracking. It is possible to measure how far your ad went, but it is much harder to figure out how much sales, brand awareness, or conversions occurred as a result of that ad.  Did your ad in time cause a glut of sales, or when you pushed out an influencer campaign a week later? The inability to link actions to sales makes it ambiguous for ROI tracking.
  

Programmatic Advertising: Precision and Performance

Programmatic advertising has completely changed advertisement consumption by purchasing digital ad space using data and Artificial Intelligence (AI) to automated the process. You’re able to host instantaneous auctions, and ad is served to the right audience at the right time.

Benefits of Programmatic Advertising

Data-Driven Targeting: One of the benefits of programmatic advertising is the ability to target based on data. Advertisers can observe user behavior, preferences, and other data to get as close as possible to relevant ads for the user. For example, if a company wants to target women ages 30-40 who are into fitness and live in New York, programmatic ads can do that. 

Real-Time Optimization: One of the benefits of programmatic advertising is the flexibility to be optimized in real-time. If one creative isn’t performing, it can be swapped out on the fly without needing to start an entirely new campaign. Additionally, programmatic advertising allows advertisers to alter their budget on-the-fly depending on which segments of the campaign are performing better. 

Transparent Metrics: Programmatic advertising has the edge over traditional media in that it can provide measurable, transparent metrics. With programmatic advertising, every impression, every click, every conversion is tracked and can be analyzed in real time. This allows businesses to see how well their campaigns are performing and then rationally optimize their ads for effectiveness based on real campaign performance data.

Challenges of Programmatic Advertising

• Ad Fatigue – The increase in digital ads served to consumers on a daily basis could lead to “Ad Fatigue”. Consumers are inundated with ads every day, to the point where they completely block it out of their focus.  In some cases, if the ads are poorly targeted or not created in a way to keep it engaging, they’re just going to be mad. That’s why it is important for businesses to constantly provide high-quality, relevant, and creative ads so that their audience doesn’t lose interest in them.
  
• Privacy Issues – The growing concern around privacy has resulted in debate around how personal data is used in programmatic advertising. This has created some issues with privacy regulations like the General Data Protection Regulation (GDPR) in Europe. Businesses need to take care when collecting data and then deciding to use those insights for advertising purposes to ensure they are compliant with privacy regulations and maintain consumer trust. 
• Complex Setup – One issue when beginning programmatic campaigns is the complex setup. It can be quite difficult for businesses, especially if they are new to the digital advertising world. The tools and technology are compiled together to help businesses be successful in programmatic campaigns, but they often require specialized knowledge. Therefore, brands should partner with the right programmatic platforms of experts that know how to partner and collaborate with businesses for their programs.

ROI Showdown: Traditional vs Programmatic Ads

In one word, ROI is straightforward—programmatic advertising is, in almost every instance, more precise, more flexible, and more measurable than traditional advertising, in terms of the ROI achieved. Programmatic allows advertisers to accurately define their audience; optimize campaigns in real-time; and measure performance with clear metrics, all of which contribute to ROI. When it comes to building a brand and awareness, traditional advertising has its advantages but cannot compete with the performance-derived strategies of programmatic advertising.

Traditional vs Programmatic: A Quick Comparison

The Power of Both: Integrated Campaigns

Utilizing Both: While it’s easy to think about traditional and programmatic advertising as opposing forces, the reality is integrated campaigns normally lead to the best results. Many of the most successful campaigns incorporate the credibility and reach of traditional media behind the precision and flexibility of programmatic advertising. 

Here is how to think about it: a strategic billboard can drive attention, and build trust, for a large audience and traditional media can pave the way for programmatic ads, which can then convert by delivering individualized messages on digital platforms. You’re having the best of both worlds: brand awareness by using traditional media and building shaft and sales seeing through precision targeting by way of programmatic ads. 

What’s Right for Your Business?

In the end, whether you use traditional or programmatic advertising is going to come down to your business goals and what you are trying to accomplish.

Looking for a large brand identification and awareness? Traditional media is a great option. 

Focusing on performance, real-time optimizing, and budgetary control? Then it would be programmatic ads all the way. 

Nevertheless, the sweet spot is clearly integrated campaigns that mix traditional and programmatic approaches.

The Last Word: Traditional vs Programmatic

Traditional advertising is still an integral part of the marketing mix, as it is the most time-tested way to establish a presence, convey village credibility, and reach large diverse audiences. However, as businesses move to be more data driven and ROI focused, programmatic advertising has gained appeal because of its targeting ability, speed, and flexibility. In today’s fast-paced marketing world, where speed of access, urgent and more relevant consumers, and better results are essential, programmatic advertisements outperform traditional catered ads in terms of conversion and budget efficiency.

Traditional outlets are powerful in the appropriate circumstances, especially in establishing a positive associations with consumers and a vast audience. Admittedly, traditional media has limited flexibility, capable of real-time optimization and speed of access. Better ROI (measurable ROI) has been less readily available for traditional advertising. In addition to being less helpful in optimizing budgets, profound initial investment and the sluggishness of traditional advertising is less attractive. In an era where advertisers need the ability to adjust strategy with real-time data, traditional advertising campaigns have less potential to reach goal achievements.

On the other hand, programmatic services (advertising) are a good way for businesses to start reaching very niche groups of consumers with precision. Programmatic services are able to use data to serve ads to the right people, at the right time. This allows them to try to get their ad dollars in the right places. With real-time optimization of their ads, businesses are able to quickly adapt based on metrics, focusing their efforts on tactics and messages that yield the highest impact for each dollar spent. Programmatic ads also allow businesses to measure their campaigns with a lot more transparency and accuracy, including analysis of return on advertising investment, conversions, and customer interaction.

At Runtime Solutions, they understand that each business or campaign credibility calling job will be different and therefore, require different approaches. Traditional advertising may serve a purpose for some brand-building exercise or where mass reach is important. For most performance campaigns, programmatic advertising will be a better method if you want to use the time, flexibility, cost savings and optimization in a consistent manner.

What makes Runtime Solutions unique is their ability to combine traditional advertising, programmatic, or a mix of the two into a comprehensive multi-channel approach.Our purpose is to help you leverage the advantages of both so that you can develop campaigns with better ROI, increased brand awareness, and the best performance in all areas.