What is Programmatic Advertising?

Programmatic Advertising

Marketing has often struggled to convince CEOs of its worth over the years. When we were all spending money on print ads in newspapers, we were certainly able to tell where the money was being spent but not so confident about what we were getting back. In the age of digital marketing and CRM, we are able to close that gap – and determine what our return on investment is.

It’s not only outputs which have become clearer: we are able to target our audiences in a much more accurate way. The smaller you can get your audience, the more likely that you will be able to create a specific message that will engage them. Digital marketing has made big steps here, but programmatic advertising can take it further forward still.

Programmatic advertising is not a new concept – it has been around for a few years now, but with more and more people advertising on digital, programmatic is starting to arrive onto people’s ‘should find out what the hell this is all about’ list.

Programmatic advertising is where software is used to buy space on digital, e.g. websites, instead of booking a block of digital space for a particular block of time. It essentially allows advertisers to identify the demographics of the viewer rather than the identifying the website which we think they are viewing. And it is not limited to digital display advertising – it is theoretically possible for other digital advertising (e.g. social media), but also traditional media such as TV. It’s just a case of organising the data (which already exists) into a usable format.

The way that programmatic advertising works is that in the time that it takes for a web page to load, information about the user is gathered, such as age, gender, location, etc. as well as the context of the website itself. This information is then sent to an advert exchange where a number of organisations will have bid to show their message to that profile of person – and the highest bidder is the advert that is shown. A lot in the time is takes to load a page!

From a marketer’s perspective, this is really exciting. We are starting to get to the stage where we are truly defining the audience by a set of accurate demographics, rather than choosing the website that we think they will see. This promises to minimise the amount of wasted adverts shown to the wrong people. It even opens the possibility of truly personalised marketing.

But what about the consumer? Are they ready to be advertised to at such a personal level? Is technology developing at a rate which is faster than our changing attitudes to privacy? Time will tell.

So does this mean the end of block buying advertising space? Not necessarily: if your objective is brand awareness (or you just want to keep a competitor off a site), you may still want to go old school and block some advertising.

And let’s not assume that programmatic advertising is the silver bullet. It doesn’t always work as planned. The adverts which have caused YouTube so many problems recently were placed by programmatic methods. The user might be exactly who you want to talk to, but you might not want to be associated with some of the content that they are consuming.

Image via graphicalliance.co.uk

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