Programmatic advertising vs. paid social: Which one wins?

ORIGIN: How do these two advertising strategies fundamentally differ in approach and execution?

ES: Paid social operates within something called walled gardens. Meaning that platforms such as Meta, TikTok, LinkedIn, and Pinterest have a closed ecosystem where we can only buy ads through their ad platforms. Due to this closed garden, these paid social platforms can offer robust first-party data based on their own content such as user behaviour, and engagement signals. Paid social ads also thrive on native content formats, fostering engagement through interactive ad units like stories and reels.

PK: Programmatic provides omni-channel solutions outside the walled gardens, enabling marketers to target specific audiences with precision and scale their campaigns efficiently using real-time data. These channels include display, video, digital out-of-home, connected TV, mobile, native, and audio.

ORIGIN: In our niche, are there types of businesses or industries that tend to benefit more from one over the other?

PK: Top spending industries include retail, travel, auto, financial services, technology and electronics. TravelDesk specializes in the travel and tourism industry. Our key clients in this sector are destinations, airlines, hotels, tours and attractions.

ES: Paid social is particularly effective for industries that rely on strong visual storytelling, customer engagement, and retail. Travel and tourism brands—including airlines, hotels, and destination marketing organizations—benefit significantly from social’s ability to inspire audiences through ads that look native to the social platforms. Paid social also has several ways to optimize towards certain events, which allows us to be flexible to meet almost any KPI. 

ORIGIN: In terms of targeting capabilities, how do programmatic and paid social compare?

PK: At TravelDesk we not only have access to vast amounts of 1st and 3rd party data, we have our own proprietary custom traveler profiles and data segments, allowing us to build addressable audiences and activate across programmatic channels and the open web. This allows advertisers to target specific audiences based on multiple factors, such as geographic location, demographics, interests, browsing behaviour, device, and time of day.

ES: Paid social offers granular targeting based on platform-specific first-party data, including user demographics, interests, behaviors, and social connections. Additionally, paid social excels in lookalike audience modeling, retargeting. On paid social and programmatic MMGY has the ability to run proprietary audiences such as TRiPs.

ORIGIN: Which method typically delivers better ROI, and why?

ES: There isn’t one secret method that will deliver the best ROI. Every client has different needs and media mixes. However, most of the time we see the best ROI when programmatic and paid social work together. While social ads leverage platform algorithms to optimize delivery based on user interactions, social walled gardens only allow us to reach people when they spend time on those channels. This is where programmatic and paid social can fill in the gaps for each other.

PK: Both channels provide different solutions for advertisers. Through programmatic we can deliver a full funnel omni-channel approach from upper funnel through to conversion, utilizing real-time data signals to understand where a user is in the purchase or trip planning path. Both channels complement each other, allowing advertisers to reach audiences in a walled garden environment and across the open internet

ORIGIN: How do attribution models differ between the two? Are there any common pitfalls in measurement?

PK: All channels can be measured in programmatic, providing advertisers valuable insights across omni-channel attribution. Data transparency not only allows advertisers to measure attribution by channel but understand which audiences are key drivers in delivering the desired business outcomes of their media campaign.
Erin Snider: Paid social platforms do have their own attribution models that vary by platform. For example, on Meta you can run a campaign with the attribution model of 7-day click and 1-day view-through, which means if someone clicks on our ad and then converts in 7 days, or sees an ad and converts the same day, that ad would get credit for the conversion. However, due to paid social being a walled garden, it natively lacks the ability to integrate with other marketing efforts when considering attribution. That’s why we tag our ads with Google Campaign Manager (GCM) click-trackers. This allows us to be able to track ad click through attribution and account for a programmatic ad that also may take credit for the ad. However, the only drawback to this is that we are not able to track view through conversions this way, so it is by no means a perfect solution.

ORIGIN: How does the effectiveness of each strategy change depending on the marketing funnel stage (awareness, consideration, conversion, retention)?

ES: Paid social plays a crucial role at every stage of the funnel, and we have campaign objectives that we can specifically build that will maximize impressions, landing page views, post engagement, video views, lead generation or even events like add-to-carts, onsite searches, and purchases.

PK: Different formats, channels, and messaging are used across each stage of the marketing funnel along with different metrics to define success and optimise programmatic campaigns. Awareness channels typically include CTV, DOOH,  as well as high impact display creatives. As users move to the consideration stage we are able to dynamically serve relevant messaging to push the user towards conversion. Formats and channels at consideration stage can include video, native, display. Conversion stage is where we deploy low funnel tactics  across display and mobile. Retention or cross sell / upsell can be delivered from a client's CRM/first-party data or using campaign data of converters. Channels and messaging for this audience vary, however we typically reach and engage with this audience across display, mobile, and native.

ORIGIN: With privacy regulations tightening (GDPR, CCPA, loss of cookies), how are both channels adapting?
Peter Kelly: All data must be consented by the user. Companies must get explicit consent from users before using their data. Companies must be transparent, clear, and specific about how they are using the data. 

ES: Paid social platforms have made shifts towards privacy solutions, such as Meta’s Conversions API, which allows advertisers to pass first-party data directly while maintaining compliance. However, the pixel isn’t going away. As long as you follow website cookie compliance and correctly have your meta pixel implemented with privacy regulations, it’s still recommended to have the pixel placed on your site.

ORIGIN: With first-party data becoming more valuable, which channel leverages it better?

PK: TravelDesk is able to on-board and activate clients 1st party data across programmatic channels. Through our partnerships we can enrich this data with demographic and psychographic data to build a complete and rich customer profile, helping brands get a deeper understanding of their customer and provide insight into their preferences and behaviours. This helps to improve the user experience, build meaningful customer relationships, and create personalised and targeted marketing campaigns. 

ES: Paid social platforms are deeply integrated with first-party data, allowing brands to build custom audiences from CRM lists, website visitors, and app users. This makes paid social a strong tool for brands with a robust first-party data strategy.

ORIGIN: How do the cost structures of programmatic and paid social differ?

ES: Paid social has internal auction systems, with dynamic bidding based on audience competition, ad quality scores and how likely people are to find value in your ad. This means that the lowest bid doesn’t always win; the quality of the ads count for something, too. Social channels have a vested interest in ensuring that people like using the platform despite its ads, so they take that into account when your ad is at auction.

PK: Typical buying models in programmatic are CPM (cost per mille) or dynamic CPM (dCPM) model. CPM is a flat or fixed bidding model and dCPM stands for dynamic bidding model.

ORIGIN: Which one tends to require a larger budget for effectiveness?

PK: Budgets need to align with the target audience, markets to drive business outcomes and data to fuel the campaign. Budgets can vary from $20k test budgets to multi-million international campaigns.

ES: Paid social campaigns can be effective with smaller budgets, especially when targeting niche audiences or leveraging platform optimizations. However, costs vary based on audience size, competition, and platform-specific factors. Sometimes a larger budget may be needed to achieve certain goals. 

ORIGIN: How can brands maximize their ad spend on each platform?

PK: To maximize your programmatic ad spend, brands should focus on leveraging robust data analysis to create actionable insights and strategies. Utilize advanced targeting capabilities, real-time analysis and optimization of bid strategies and adapting strategies based on insights gathered from the  audience to reach the most relevant users, at the right time with the right message. This includes using first party data, curated audiences and contextual keyword targeting. 

ES: Here are the 3 tips I suggest to maximize ad spend on each platform:

• Create a funnel to build awareness, engagement and then conversions.
• Use retargeting and lookalike audiences for efficient scaling.
• Create quality content that looks native to each ad platform.

ORIGIN: Which platform benefits more from automation and machine learning advancements?

ES: Paid social platforms heavily rely on AI and machine learning for ad delivery optimization. Machine learning models analyze user engagement patterns in real-time, automatically adjusting bids, placements, and creative delivery. Features like Facebook Advantage+ and TikTok Smart Performance Campaigns are built to maximize efficiency with minimal manual input.

PK: Programmatic advertising uses algorithmic based AI machine learning models to find and target audiences, drive campaign efficiencies and optimise maximum performance. AI algorithms enable the automation of tasks that previously required human intelligence, such as the buying and selling of ad inventory, now known as programmatic advertising.

ORIGIN: How do you see programmatic and paid social evolving in the next 3-5 years?

PK: As AI technology continues to advance, programmatic advertisers will be able to harness it in new and innovative ways. Generative AI uses machine learning algorithms to generate new content, such as ad copy or creative assets. As technology advances, advertisers will likely leverage it more to automate the process of ad creation, allowing them to develop and iterate new ad concepts quickly and efficiently. The use of AI in the campaign planning phase will likely continue to grow in the future as agencies use it to align with outcomes and drive efficiencies.

ES: Paid social will continue rolling out AI solutions in their buying platform and algorithms. Time spent with video content also has seen a steady increase over the past years, and I don’t anticipate that changing soon, even if platforms do change. The social landscape is constantly changing, there’s always a potential for new placements, new platforms or new product offerings.

ORIGIN: If a brand had to choose just one, what factors should influence their decision?

PK: Modern consumers are savvy internet users. While they spend about a quarter of their time on social media, the rest is spent with other forms of digital media. Programmatic advertising allows brands to reach users across various websites and platforms including gaming, music streaming, podcasts, CTV and online publishers. Each channel complements the other. It's not a case of which one, but understanding the benefits of all channels and platforms to deploy strategies that reach your target audience in the right environment, at the right time to drive success and results driven outcomes. 

ES: I would say the decision depends on the brand’s goals, needs and who they are targeting. Paid social isn’t always the right fit for everyone, but it can be a great solution for many brands who are consumer facing, and do well with telling a story.

ORIGIN: Are there emerging alternatives that could replace or complement these strategies?

PK: AI is advancing at a speed that even the most seasoned marketers struggle to match. Just last year, generative AI was an experimental tool. Now, it’s a central pillar of marketing strategy at the world’s biggest brands. AI-driven personalisation is redefining customer experiences. New AI analytics tools emerge almost daily, each promising sharper insights and higher ROI. AI is going to change everything in ad tech.

ES: I think paid social media will always be around in some capacity.  However, influencer marketing and social commerce solutions will continue reshaping the paid social landscape. These extensions can serve as valuable tools within your paid social campaigns.