In this article, we’ll go over what you need to know programmatic advertising and explain why it will likely be an important part of your strategy going forward.
Even if you’re new to digital marketing, chances are pretty good that you’ve heard the phrase “programmatic advertising” on at least a couple of occasions.
That’s for good reason. In a recent forecast, eMarketer estimates that programmatic ad spend will hit close to $33 billion this year.
What, Exactly, Is Programmatic Advertising?
Programmatic advertising is a type of marketing automation.
Specifically, it’s automated ad spending. The idea behind programmatic advertising is to automate the decision-making process of where ads are placed.
“Put very simply, programmatic is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them, often in real time,” says Kenneth Kulbok, a programmatic sales lead at LinkedIn.
“Traditional ways of buying digital ad space involve the publisher running the campaign, while programmatic puts the control to manage and measure back in the hands of the advertiser.”
Programmatic advertising relies on artificial intelligence (AI) to make the right purchases. In some cases, it combines AI with real-time bidding (RTB) to optimize display, mobile, and even video campaigns.
It’s also becoming increasingly popular with TV ads as well.
“Programmatic started off as a way of using up remnant inventory,” says IAB UK senior programmer manager, Dee Frew. “It was a way of increasing the efficiency on leftovers, but as it has evolved it’s become more sophisticated.”
However, Frew explains, you shouldn’t confuse it with RTB.
“There is, however, a frequent misunderstanding that all programmatic is real-time advertising. That is a subset of programmatic, a way of utilizing programmatic techniques to make instant purchases. It’s a bit like having a robot shop for you on eBay. Real-time advertising is an auction-based model, whereas programmatic is the full breadth of automation.”
