What is programmatic advertising?
Programmatic advertising refers to the automated buying and selling of digital advertising through technology and data. Instead of inserting ads manually, programmatic advertising relies on complex algorithms and real-time bidding auctions to determine where and when ads should be placed.
Programmatic provides a highly targeted approach to digital advertising by leveraging data and consumer insights to identify the best potential customers for a brand's ads. It eliminates much of the manual work involved in traditional digital advertising.
How does programmatic advertising work?
The programmatic advertising process involves several key players:
- Advertisers use demand-side platforms (DSPs) to create and target digital ad campaigns automatically based on parameters they set.
- Publishers make their ad inventory available for sale through supply-side platforms (SSPs).
- Ad exchanges bring buyers and sellers together for real-time auctions to buy and sell digital ad impressions.
In real-time bidding auctions, advertisers bid for the chance to show their ads to specific users, based on information about the user's demographics, interests, and browsing behavior. The winning bidder's ad is instantly shown on the publisher's site when the user loads the page.
This all happens in the fraction of a second it takes a webpage to load, allowing extremely rapid optimization of campaigns.
What are the benefits of programmatic advertising?
There are several key benefits that make programmatic advertising highly appealing to modern digital marketers:
- Precision targeting - Programmatic allows for unprecedented targeting of niche audiences, going far beyond basic demographics.
- Better ROI - Detailed performance data allows ongoing optimization for maximum return on ad spend.
- Flexibility - Campaigns can be adjusted in real-time based on what's working best.
- Automation - The manual work of media buying is reduced significantly.
- Transparency - Having full access to campaign data provides clarity into how ads are performing.
What are the current trends?
Programmatic advertising is changing rapidly as new technologies emerge. Some current trends include:
- Mobile - Mobile programmatic ad spending is rising steadily as consumers shift to mobile devices.
- Video - More premium video inventory is becoming available programmatically.
- Advanced targeting - Machine learning and artificial intelligence allow more advanced audience targeting and prediction of consumers likely to convert.
- Privacy - Regulations like GDPR are pushing for greater transparency and consumer privacy.
- Omnichannel - Programmatic techniques are expanding beyond digital to traditional channels like radio and TV.
What are the major platforms?
The major platforms enabling programmatic advertising include:
- Demand-side platforms (DSPs): Google Ads, The Trade Desk, Adobe Advertising Cloud, MediaMath
- Supply-side platforms (SSPs): Google Ad Manager, Magnite, PubMatic, OpenX
- Ad exchanges: Google AdX, AppNexus, Index Exchange
Many ad tech vendors provide combinations of these platforms through integrated solutions. There are also self-serve options like Google Ads for smaller advertisers.
The IAB (Interactive Advertising Bureau) offers a Certified Programmatic Professional credential for mastering the fundamentals of programmatic advertising.
Google, Facebook, and other ad tech vendors also offer their own certifications focused on their proprietary platforms and products. Taking advantage of training opportunities can help advertisers fully leverage programmatic techniques.
Programmatic advertising in action
Many top brands have adopted programmatic advertising strategies:
- L'Oréal used programmatic to target potential makeup customers with product sampling ad campaigns, increasing product trials by 350%.
- Pepsi created a mobile game experience for consumers using programmatic video and display ads, seeing 71% higher ad recall.
- Red Bull executed a dynamic sports news feed ad experience powered by real-time data and bidding.
These examples showcase the creative potential of data-driven personalized ads powered by programmatic advertising. The possibilities are nearly endless.
The future of digital advertising
Programmatic advertising provides a new level of automation, targeting, and transparency for digital marketing campaigns. By leveraging real-time auctions and advanced data, brands can take their advertising to the next level. Following the latest programmatic trends and best practices can help unlock greater value from ad budgets.
