Programmatic advertising has revolutionised the way businesses advertise their products and services. With its ability to automate the entire advertising process, programmatic advertising has emerged as a powerful tool that has transformed the advertising landscape.
What is Programmatic Advertising?
Programmatic advertising is an automated process of buying and selling advertising space. It uses algorithms and data to purchase digital advertising in real-time. This method of advertising enables businesses to target specific audiences with greater accuracy and efficiency, resulting in higher conversion rates and better ROI.
How Programmatic Advertising Works
Programmatic advertising works by using a combination of data, algorithms, and real-time bidding to purchase advertising space. The process typically involves the following steps:
- The advertiser selects the target audience and sets up their ad campaign, including ad formats, targeting options, and budget.
- Publishers make their ad inventory available through ad exchanges or supply-side platforms (SSPs).
- Advertisers bid on the ad inventory in real-time through demand-side platforms (DSPs), based on their targeting criteria and budget.
- The highest bidder wins the auction and their ad is displayed on the publisher’s website.
Benefits of Programmatic Advertising
- Targeted Advertising
Programmatic advertising enables businesses to target their advertising to specific audiences based on demographics, interests, behaviours, and other criteria. This means that advertisers can reach their desired audience more accurately and efficiently, resulting in higher conversion rates and lower advertising costs.
- Real-time Bidding
Programmatic advertising uses real-time bidding to purchase ad inventory, which means that the process is automated and takes place in real-time. This enables advertisers to make quick decisions and adjust their campaigns based on performance, ensuring that they get the most out of their advertising spend.
- Data-Driven Advertising
Programmatic advertising uses data to inform ad targeting and bidding decisions. This data includes information about the target audience, ad performance, and market trends. By using data, advertisers can make more informed decisions and optimise their campaigns for better results.
- Increased Efficiency
Programmatic advertising streamlines the advertising process, eliminating the need for manual tasks such as negotiation and placement. This results in increased efficiency and lower advertising costs.
- Increased Transparency
Programmatic advertising provides greater transparency into the advertising process. Advertisers can track their ad performance and see where their ads are being displayed. This enables them to make informed decisions about their advertising campaigns and optimise their performance for better results.
Historical Alterations
The advertising industry has gone through significant changes over the years, with the emergence of programmatic advertising being one of the most significant. Traditional advertising methods involved manual processes such as negotiations and placements, which were time-consuming and often resulted in inefficiencies. However, with the emergence of programmatic advertising, the entire process has been automated, resulting in greater efficiency and lower costs.
According to a report by eMarketer, programmatic advertising accounted for 85% of total digital display ad spending in the US in 2020, up from 81% in 2019. This highlights the growing importance of programmatic advertising in the advertising industry.
Programmatic advertising has emerged as a powerful tool for businesses looking to advertise their products and services. By using data and algorithms to automate the advertising process, programmatic advertising enables businesses to target specific audiences with greater accuracy and efficiency. The benefits of programmatic advertising include targeted advertising, real-time bidding, data-driven advertising, increased efficiency, and increased transparency. As the advertising industry continues to evolve, programmatic advertising is expected to play an increasingly important role in the way businesses advertise their products and services.