Programmatic advertising has changed the face of online advertising, but there's still confusion around what it actually is. A primer, in plain English. MarTech Landscape: What Is Programmatic Advertising & Media Buying? Over half of display ads are now being bought programmatically in the US, but ad tech seems bent on making it hard to explain. Here's a look at what programmatic is and why it's growing in clear terms.
What is Programmatic Advertising
December 15, 2017
Effectively capturing the attention of consumers in today’s digital ecosystem is no easy task, which is why we’re going to talk about Programmatic Advertising today. There are millions of websites, applications and digital properties being viewed across a variety of channels, all day, everyday.
Having to use separate platforms to advertise on different channels and having to select the best places to put your advertisements in the digital world is an increasingly daunting task.
Programmatic advertising solves this.
Programmatic advertising is the automated buying and selling of online advertising.
This automation makes transactions efficient and more effective, streamlining the process and consolidating your digital advertising efforts in one technology platform.
Programmatic platforms have been growing their inventory and database such that any format and any channel can be accessed programmatically today, including mobile, desktop, tablet, audio, digital outdoor and connected TV.
Targeting tactics are used to segment audiences using data so that advertisers only pay for ads delivered to the right people at the right time, and depend less on the “spray and pray” method of digital advertising. Computers and algorithms make the ad buying, placement and optimization process more efficient, remove mundane activities and cut down on time to market.
An Example of How Programmatic Advertising Works IRL:
Advertiser Totally Tubular wants to sell more surfboards
It hires a programmatic advertising platform that is able to identify online consumers by things like:
- demographics (male / female / 18 – 45),
- geography (3 min from a beach),
- interests (surfing, saltwater, California),
- behaviours (consume surfing content on their lunch break),
- time of day (7-10PM)
- weather (sunny)
- device (smartphones)
The platform then uses real-time data to identify the best online audience(s) for the campaign and buys digital ad inventory through an auction based on everything available across multiple devices, in places the audience cares about.
Advertisements are personalized based on each consumers unique interests and behaviors.
Intelligent connections are made, insights are generated, and performance is optimized.
Should I care?
Programmatic advertising contributed US$25.48 billion to the digital advertising market in 2016, up from $17.5 billion in 2015, according to eMarketer. By 2019, it is projected to reach US$45.72 billion, meaning the industry will have grown more than two and a half times over just four years.
What’s the secret to success for programmatic platforms?
At the heart of every programmatic advertising platform is a proprietary machine learning algorithm that analyzes campaign inputs and user behavior so real-time campaign optimizations can be made and audiences that are most likely to convert are identified and targeted. A number of different types of data come into play to enhance the probability of a campaign’s success.
So, What Are The Benefits?
There are multiple benefits to using a programmatic advertising platform for all your digital advertising efforts. First and foremost, programmatic advertising helps buyers and sellers make data-driven decisions and removes the guesswork from the ad buying process.
Here are a few additional benefits of programmatic advertising:
It’s good for your budget. Programmatic technology creates efficiencies by using machine learning to optimize campaign success, avoiding ineffective inventory.
Better targeting. You will be hard put to find a technology platform that allows you to target across as many different tactics, across devices, in real-time.
Streamlined campaign management. Consolidating campaigns in one system across devices and formats allows you to visualize success in one place.
Easy access to ad inventories. Advertisers are able to access the optimal inventory across a variety of exchanges at once, and allow the algorithm to do the heavy lifting in bidding.
Streamlined campaign management. Consolidating campaigns in one system across devices and formats allows you to visualize success in one place.
Easy access to ad inventories. Advertisers are able to access the optimal inventory across a variety of exchanges at once, and allow the algorithm to do the heavy lifting in bidding.
Is Programmatic the Future of Advertising?
Programmatic advertising enables marketers to more effectively funnel messaging across desired channels and optimize Share of Attention(R), to reach the most desirable markets and demographics, and use data to pinpoint new opportunities.
Through automation and machine learning, programmatic creates an environment that enables marketers to reach their most meaningful audiences more efficiently than ever before using digital media to deliver the best results.
However, programmatic is not the future of advertising, it’s already here. If you are not taking advantage of its potential in some capacity already you are missing out on the potential to save money and see better performance in your online advertising campaigns.
Let us show you how the The AcuityAds Self-Serve Programmatic Platform works.
By Vangie Beal
Related Terms
Usually referred to as programmatic marketing or ads, programmatic advertising is a way to leverage an algorithmic-based purchase and sale of digital advertising to target specific audiences, such as segments across age, gender, social or geographic locations.
Programmatic advertising buyers basically set key parameters such as bid price, reach, specific audience data, platform and dozens of other variables to achieve the desired ROI per campaign. Buyers are algorithmically matched with inventory.
Image Source: Programmatic Advertising Infographic by ownerIQ, Inc.
Buying and Display
Programmatic media buying uses software to automate the buying and placement of media inventory using a bidding system. Programmatic advertising buyers set key parameters such as bid price, reach, specific audience data, platform and dozens of other variables. Advertisers can also tailor messages based on the expected audience and context to achieve the desired ROI per campaign. For publishers, the ads are displayed on a site based on demographic information about the current on-site user and matching ads are displayed to the user in real-time.
Programmatic advertising technology allows all standard ad tasks such as purchasing, bidding, negations and ad insertions to all be automated and completed by software and machines, without any human interaction. It is widely accepted that programmatic media buying creates a more efficient and overall cheaper advertising system.
Native Programmatic Advertising
Standard and traditional website banner ads simply do not fit today's mobile screens. As more advertisers adopt programmatic advertising, there is a need for programmatic native ads that will fit the ad space on mobile devices and perform well within new types of publisher content that is designed for mobile users. When creating programmatic native ads there is a need to consider using different images or headlines and to better track native ad performance alongside other programmatic advertising campaigns.
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