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What Is Programmatic Advertising?

The expanding array of digital devices and media channels has created a complex and fragmented digital landscape. That has made it increasingly difficult for advertisers to capture consumer attention at the right time with relevant messaging.

Programmatic advertising helps solve this and enables marketers to reach targeted audiences at scale even in a fragmented digital landscape. It uses software to replace human processes and automates most of the previously manual aspects of media buying. By relying on algorithms and machine learning to make data-driven decisions, programmatic increases efficiency and eliminates waste.

Although most of the heavy lifting is accomplished through AI (artificial intelligence) and machine learning, humans are still required to plan the overall strategy by optimizing campaigns goals and selecting KPIs (key performance indicators).

This type of automation allows advertisers to reach their most meaningful audiences, based on demographics, geography, interests and more, quickly and effectively. It also saves marketers time and money by combining all components of their digital advertising into a single, easy to use platform.

Since 2016, programmatic digital display ad spending in the U.S. has risen year-over-year. eMarketer estimates that by 2020, total spend will be nearly $70 billion. It’s worth noting that the majority of these dollars will likely be allocated toward mobile as opposed to desktop.

In addition to increased efficiency, programmatic advertising has many benefits for those that opt to invest in it. The process has aided in providing advertisers with more ROI and giving them access to a larger number of publishers.

There are two main types of media buying that fall into programmatic advertising. The first, real-time bidding (RTB), is where ads are purchased through real-time auctions. This option places ads in front of those who fit the buyer persona established by the advertiser. It uses three key players: a publisher, a supply-side platform and a demand-side platform.

The second form is programmatic direct, which involves direct deals with publishers and bears a resemblance to the more traditional form of media buying. Utilizing this method, advertisers have the ability to purchase a certain number of impressions ahead of time.

According to an October 2018 article from Adweek, “In 2020, U.S. advertisers will spend $42.6 billion on media via programmatic direct, representing 61.8 percent of all automated spend, while RTB spend, totaling $26.3 billion, represents the rest.”

If you’re looking to gain a better understanding of programmatic advertising and how to execute it successfully, Google offers an insightful 5-step exploratory guide. It includes details on organizing audience insights, designing compelling creative, executing with integrated technology, reaching audiences across screens and measuring the impact.