Understanding Programmatic Advertising And Google Display Network: Which is Better For Advertisers?

Digital advertising is a broad concept that encompasses various methods of delivering ads over the internet. In recent years, digital advertisers have employed automation, analysis, and targeting to increase advertising outcomes. The two major digital advertising methods that have been at the center of these smart approaches for a long time are programmatic advertising and the Google Display Network (GDN).

People often talk about programmatic advertising and the GDN like they mean the same thing, but that is erroneous. Although both technologies employ automation and share many similarities, they are still distinct and have different operational modalities.

Advertisers frequently seek to discover which of the two advertising options offers the best value and efficiency. In 2021, the global programmatic ad spend reached $150 billion. On the other hand, Alphabet INC, the mother company of GDN, generated $218 billion from ads in 2021. So, which option is better? Before you try to decide, read this guide to understand the fundamental and operational differences and how both options can be beneficial.

What is Google Display Network?

The Google Display Network is a system comprising over 2 million websites, various applications, video streaming platforms, and other sources of inventory. This system enables advertisers to deliver ad content to internet users on various web platforms.

According to Google’s estimate, the GDN can reach 90% of the global internet audience. Recent findings reveal that there are currently 5 billion internet users globally, suggesting that the GDN might display adverts to 4.5 billion individuals.

How does it work?

In Google Display Network ads are shown to audiences based on the advertiser’s targeting preferences.

In essence, the GDN allows advertisers to set up their targeting and reach their ideal audience on the internet. The GDN then projects the ads to the right audience at the right time. For example, if you want to address hikers, you can show ads only to such an audience on GDN. If you are also looking for sports equipment shoppers within 60 miles of your store, you can also target them with geomarketing campaigns. Using audience segments on GDN, marketers may target new users or retarget existing ones who have interacted with your previous ad campaigns or shown an intent to make a purchase.

Benefits of using the Google Display Network

Here are some reasons why you may want to consider GDN.

  • Enables precise targeting

Google has positioned itself as the world’s leading user-centric digital service provider, with over 271 products being used by over two billion people. Because Google services are used by almost everyone, GDN’s data gathering ability for targeting can be hardly matched by other platforms.

Also, GDN employs automated targeting that allows marketers to target users using demographics, location, and interests. Additionally, you may target users based on keywords and Google search history.

  • It is affordable and easy to use

The GDN is a great alternative for digital advertisers with little technical knowledge because it is user-friendly, making it easy to set up an ad campaign on it. Using GDN is also cost-effective, so advertisers on a budget can benefit from it.

  • Integrates with other Google products and tools

Google has other tools and products like Gmail, Google Docs, drive, etc. Many marketers use some of these other tools. GDN allows you to synchronize your workflow across the Google tools, promoting efficiency and better ad tracking and reporting processes.

Challenges of Google Display Network

Even though GDN has some clear benefits outlined above, advertisers can be challenged because following points:

  • Lack of access to non-Google websites

While GDN has access to all websites and web platforms connected to Google, still, you can’t reach users on other platforms outside Google’s ecosystem.

  • Limited ad formats

Although GDN supports the most popular ad formats, such as banner ads and video ads on YouTube, its ad format offerings are still limited compared to programmatic. For instance, you can only display video ads on YouTube and across video partner sites. In contrast, programmatic platforms allow you to show video advertising on various web platforms, such as mobile apps, websites, and streaming platforms. Programmatic, meanwhile, supports other options, such as connected television (CTV) and cross-device video ads, all of which are unavailable on GDN.


What is programmatic advertising, and how does it work?

Programmatic advertising is an automated technique for purchasing and displaying ads, but unlike GDN, there is no single entity in control of the entire ad display process. Rather, programmatic advertising integrates several adtech services into the ad delivery chain. Some of these systems include; ad exchanges, ad networks, demand-side platforms, supply-side platforms, and data management platforms.

How does it work?

Image Source: https://smartyads.com/blog/what-is-programmatic-advertising/

Programmatic advertising uses automation and data to place your ads in front of the right audience at the right time. Here an advertiser registers on a DSP to set up their ad campaign delivery preferences, including targeting options, audience segmentation, time, and ad budget. On the other side is SSP (publisher’s platform) which sends a request to DSPs when the user opens the webpage. This request contains necessary data about the user and the future placement. If the data matches ad campaign preferences (especially targeting) a DSP takes part in the real-time bidding auction. The ad of the winner gets delivered to the user.

While this might seem like a really long process, in practice, it isn’t. The bidding and ad display processes happen in real-time (milliseconds).

Benefits of using programmatic advertising

Here are some advantages of programmatic advertising.

  • Offers more flexibility

Programmatic advertising is less restrictive, allowing you to use a variety of ad formats and providing you with more optimization and testing tools to tune and adjust your ad campaigns until you get your intended results.

  • Greater targeting options

With programmatic advertising, you have more control over audience targeting. Some feature-rich DSPs offer you more specific targeting options like behavioral targeting, location-based, and in-store attribution. In-store attribution allows advertisers to target a customer who has visited a physical store by tracking their mobile device. Some of these sophisticated targeting options are unavailable on GDN. With more precise targeting, you can reach your most preferred audience, which increases the possibility of better engagement and conversion rate.

  • Opportunity for broader reach

Many programmatic platforms employ real-time bidding. This means that an advertiser can reach a larger number of users and publishers with varying ad inventory types and sizes, unlike in GDN, which is limited by publishers represented by the Google ecosystem.

  • Access to premium inventories

Programmatic advertising allows for private marketplace deals which give advertisers access to premium inventories. PMP deals occur when premium publishers make their inventories and audience available for selected advertisers to bid on.

Now, let’s discuss the challenges of programmatic advertising

One of the biggest challenges many new advertisers face with programmatic advertising is the lack of basic skills for correct platform configuration and campaign management. While there are many user-friendly DSPs, an advertiser would still need to understand the system and its operation to get the best result. However, most DSPs offer full-service or managed services, where the DSP assigns a manager to the advertiser to set up and adjust campaigns.

GDN and programmatic advertising: similarities and differences

The GDN and programmatic advertising have their differences, yet they are similar in some ways.

The similarities

People frequently confuse programmatic advertising and GDN due to their similar features.

  • First, they both employ automation and real-time bidding.
  • Both systems provide targeting options that allow advertisers to target audiences based on demographics, interest, and retargeting.

The differences

Here are the major differences between GDN and programmatic ads.

  • Targeting options

Although the Google Display Network and programmatic advertising both have some effective targeting possibilities, such as interest and demographic targeting, there are still targeting options that are unique to each system. For instance, GDN provides keyword targeting that allows advertisers to target users based on select keywords that are related to their campaign. On the other hand, programmatic offers some in-depth and more-defining targeting options that are not possible on GDN. For instance, on programmatic, you can even use behavioral and socioeconomic targeting – such detailed targeting is not possible on GDN.

  • Audience reach

GDN has a large reach that amounts to about 90% of internet users; notwithstanding, it can only reach each audience on platforms linked to Google. In contrast, programmatic advertising can reach more people on the Google network and beyond it. While Google Ads conducts RTB auctions on its exchange exclusively, a programmatic advertising platform can integrate with the Google Display Network and other advertising exchanges, giving advertisers access to more publishers and users.

  • Pricing models

While most programmatic platforms use the popular cost per thousand impressions (CPM) and cost per click (CPC) pricing models, the GDN offers a bit wider range of pricing options, including cost per action (CPA). Some of these include:

  1. CPM: cost per thousand impressions
  2. CPA: cost per click
  3. CPA: cost per action
  4. Programmatic advertising only supports the CPM pricing model.
  • Starting costs

Most programmatic ad service providers require a minimum ad budget, which may sometimes be quite high for new advertisers or advertisers on a small budget. With GDN, there is usually no minimum ad spend required.

So, GDN or programmatic advertising?

The GDN is a great alternative for marketers who are new to digital and automated advertising. It is user-friendly and does not require any technical skills to operate. If you are also interested in search targeting, the GDN can be a great tool to target users based on keywords. Furthermore, GDN can deliver great value even on a low budget.

Programmatic advertising is also incredibly effective and useful because it gives you access to all kinds of publishers. Programmatic is often chosen by seasoned advertisers, as it allows them to target ads with more precision by providing advanced targeting options. It also offers more flexibility with ad formats, allowing marketers to employ more engaging and dynamic experiences.

GDN vs. programmatic vs. Facebook advertising

While we have extensively discussed the advertising possibilities on both programmatic systems and the Google display network, it is also important that we compare these systems to Facebook advertising.

Although Facebook is first a social media platform, in recent times, it has become one of the most influential and effective digital advertising channels thanks to its huge user community. According to Statista, Facebook currently has 2.93 billion active users, indicating that 36.8% of the world’s population uses the platform. This is arguably the largest singular virtual assembly of people.

This makes Facebook a reckoning force in the world of digital advertising. In the third quarter of 2020, the number of advertisers using the platform to promote their products and services reached 10million, establishing that the platform is a major ad channel for marketers.

Here are some major reasons why Facebook has become prominent in digital advertising.

  1. Large reach: Facebook has an advertising audience of 2.1 billion people.
  2. Targeting options: The Facebook ad algorithm has decent targeting options, including location, demography, and interests.
  3. Add formats and engagement strategy: Besides offering good ad formats that are well-suited for the platform, Facebook ads also provide advertisers with engagement strategies optimized for different advertising purposes. For instance, an advertiser may choose brand awareness or app installs, or conversion as their advertising purpose.
  4. User retention: With Facebook allowing advertisers to create a business page on the platform, it becomes easy to nurture leads, engage an audience and retain customers without spending extra.

Notwithstanding the above benefits, Facebook is still limited, especially when compared to the advertising possibilities of programmatic. Let’s see how Facebook differs from programmatic and GDN.

  • Reach

Although Facebook has a huge advertising audience, this audience is restricted to the Facebook community. GDN, on the other hand, has an advertising audience spanning over two million websites and other platforms connected to the Google ecosystem.

Programmatic offers better reach because it has access to the GDN’s ad inventory and other platforms not connected to Google. Also, programmatic advertisers can display ads on Digital Out of Home (DOOH) platforms, smart TVs, and digital wearables. Some of these ad display options are not possible with Facebook.

  • Targeting options

Facebook targeting is based on user data acquired on social media. While Facebook has access to extensive user data, there is a risk of processing outdated data because many users do not update their information frequently. While on Facebook, you can target users based on demography, location, and behavior, GDN offers you more with search history targeting. Programmatic offers even more detailed targeting options, which we have covered in the ensuing sections.

  • Ad format

Facebook advertising has limited ad formats; however, these formats are best suited for the Facebook interface. Formats here include; images, carousel, and videos. GDN and programmatic have more ad format options because they serve ads across various interfaces and environments.

To conclude

It seems that GDN is a great alternative for marketers who are new to digital and automated advertising. If you are also interested in search targeting, the GDN can be a great tool to target users based on keywords. Furthermore, GDN can deliver great value even on a low budget. Facebook advertising, on the other hand, is great if you want to build a community and target social-media users within a closed platform. Facebook is also an effective ad channel for raising brand awareness and introducing a new service. Finally, programmatic advertising is extremely effective and useful because it gives you access to all types of publishers and extensive targeting options. It also provides more ad format flexibility, enabling seasoned marketers to create more engaging and dynamic experiences.

Author’s Bio:

Liz Tokareva, Director of In-house Products at SmartyAds, a global digital advertising software developer that creates cutting-edge programmatic solutions for digital advertisers, publishers, ad agencies, and enterprises worldwide.

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