Programmatic display advertising is the new way of targeting specific types of audience that you want to show your ads to. Programmatic marketing and advertising is real-time algorithmic buying and selling of advertising space. It helps in automating the media buying decision-making process by targeting specific demographics and audiences.
In this new form of advertising, ads are placed using Real-Time Bidding (RTB) and Artificial Intelligence (AI) for social media advertising, online display, video and mobile campaigns. Programmatic is now being expanded to traditional TV marketplaces.
How does it Work?
Typically, “Programmatic” ad buying is used in reference to the utilization of software in the purchasing of digital advertising. This is a break from the traditional process that previously involved human negotiations, Request-For-Proposals (RFPs), and manual insertion of orders. It’s, essentially using machines to buy advertising ads.
Programmatic media buying or advertising allows the person (“owner/brand”) purchasing the space to tailor a specific creative or message to the right person, in the right context, at the right time. It is not just efficient but also leads to more targeted and sophisticated marketing campaigns.
Programmatic optimizes the process of media buying and placement as the work is performed by digital algorithms and computers. It removes some of the mundane tasks associated with traditional advertising such as tagging requests and inserting orders.
Is RTB Same as Programmatic Buying?
Real-Time Bidding (RTB) is, in fact, a form of programmatic advertising, although not all programmatic buying uses RTB. Even though about 90% of programmatic ad buying is done through RTB, programmatic advertising can also be done through other ways such as Programmatic Direct and Private Exchange buying (PMP).
Programmatic display advertising is just one way of automating ad buying and Real-Time-Buying is one way of doing this.
Why Use Programmatic Advertising?
Before the advent of programmatic, ad space was sold and bought by humans. It was an inefficient and slow process that entailed taking RFPs, face-to-face meetings, and long negotiations before an ad could be finally manually published. It worked well until the number of publishers started to grow at such a fast pace that advertisers were unable to cope.
Programmatic display advertising has great opportunities for both seller and buyer:
Efficiency: The technology being used in programmatic advertising promises to make the process of ad buying system more efficient by removing the human element wherever possible. Although humans will always be vital for the planning and optimization of advertising, programmatic advertising means fewer ad buyers. The goal is to boost transparency and efficiency to both the publisher and advertiser.
Savings on Ads: This digital form of advertising is designed in a way that it does away with the hit-or-miss, old-fashioned campaign design. The old system was notorious for costing the buyers (marketers) too much money.
Automation: With programmatic, all that one needs to do is simply feed your programmatic ad buying system some info regarding your campaign and key performance indicators. The system not only launches your campaign but also monitors your ads spend to suggest areas of possible improvement.
Tailor-Made Ads: Compared to the conventional and old way of media buying, programmatic allows the buyer to tailor and design a specific message to the right target, at the most opportune time and within the best context. Now, it’s possible to buy ad space yourself without having to undergo all the red tape. And you can now expose your business to the specific people who might have a need for it. This means a more scalable way of serving your ads.
Time-Saving: The technology used in programmatic may mean fewer ad buyers. It also could allow both sellers and marketers to spend more of the available time planning customized, sophisticated marketing campaigns instead of being bogged down by endless bureaucracy.
Challenges of Programmatic
Over the past couple of years, programmatic marketing has gained lots of traction. This naturally means that as it advances, problems will also arise. Here are several issues that you are likely to encounter as Programmatic Advertising expands.
Advertisers are finding their web traffic being split across computers, mobiles, and other devices. About 70% of them have responded by splitting their programmatic advertising across several digital channels in efforts to reach more people. This splitting may explain why most advertisers are now ranking complexity as being first among the issues they are facing challenges.
Another risk with programmatic buying is that your ads might end up in the wrong hands or in unsavory locations! Because programmatic relies on cookies for tracking users across devices, that could also be a challenge.
Although ad fraud isn’t exclusive to programmatic advertising, it nevertheless remains an issue.
The Future of Programmatic Advertising
Programmatic was previously the preserve of larger media agencies with big budgets. However, the rapid rise of convenient self-service tools has given smaller brands more access to this technology. They now also have the ability to compete against larger brands without having to go through costly middlemen.
Spending on programmatic spending will continue growing because it’s now the most efficient way of buying media, all the more reason why you need to know more about how it works.
For example, 55% of all display ads in the US in the year 2015 were programmatically brought. U.S. programmatic spending was predicted to grow by 20% to hit $39 billion in 2018 and $45.7 billion this year. On February, 26th, 2019, a CNN Business Reports indicated that programmatic advertising has surpassed traditional advertising in terms of total expenditure.
Conclusion
True, programmatic has several ongoing issues, but with effort and education, they are all surmountable. It’s still a relatively young technology so you can expect to face several new issues and challenges as you learn. One thing for certain though, is that you cannot afford to be left behind. Once it’s fully embraced by the market, programmatic will radically transform the face of display advertising for forever, and for better.
Programmatic advertising can clearly be a breakthrough resource needed by marketers who want to reach specific and highly targeted audiences. This is because it allows them to focus squarely on particular demographic groups and serve them targeted content directly. Despite some of the associated challenges described above, results can not only be measured but reliably tracked. Just ensure that you have set clear goals and also establish metrics that are most critical to your campaign.
