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Resources / Blog

What is programmatic advertising?

10th May 2019

Topic: Programmatic
  • What does programmatic mean?
  • What is programmatic marketing?
  • How programmatic advertising works?
  • Programmatic Advertising Benefits
  • What is the global programmatic market size

$84 B dollars marketers spend globally on programmatic advertising this year. This fast-growing ad model comes into the picture of the advertisement market when we talk about buying an ad in automatic, programmed in advance way. So the ad – on the basis of audience data, such as cookies or mobile ID – is delivered to the target audience in the right time and in the right place, and the whole process is done by machine instead of human sales representative. Benefits? Cost-effective, fast and reliable ad model.

What does programmatic mean?

In times when reiterating, routine portions of work have more tendencies to become automated along with Big Data used, programmatic actions are more actual than ever were before. ‘Programmatic’ term is based on a certain comprehensively analyzed assumption that was given in a first place and the actual result that must take a place in the end of the process.

This may involve a couple of systems that are integrated between each other and are responsible for particular market party. In case of programmatic buying, those are advertisers and publishers, respectively. Each of them introduce a certain input into the algorithm so the ad buying is programmed to give the best output – in terms of profit, of course.  

What is programmatic marketing?

Programmatic marketing is focused on the reaching user from your target audience with personalized message just in time when your user “requests” that. There are multiple systems that offer functionalities, which in collaboration with client’s 1st party data bring the predicted result during online campaign planning. Those are DSP (Demand Side Platform), which stands by advertiser side, SSP (Supply Side Platform) that possesses publisher’s inventory and data provider to collect, organize and manage audience data.  

How programmatic advertising works?

Simply speaking, programmatic advertising gives an opportunity for the marketers to reach the audience in more intelligent way. Using programmatic advertising, you know about your users literally everything you need to know. Using 2nd– and 3rd party data together with your users’ basic characteristics (1st party data), you know where they are located, what demographic group they belong to, what is the usual time when they are looking for something to buy.

All given insights are super useful during real time auction – one of the most popular programmatic techniques. Real time bidding (RTB) is a programmed process of online ad buying, which is based on collaboration of systems, configured according to your business needs. To learn more about RTB, check our post: what is real time bidding.  The more you know about modern technologies the more confident you are in using them.

Programmatic Advertising Benefits

Programmatic advertising takes into account a segmentation of the target audiences to optimize the campaign and increase a number of customers. There is a big chance to return more money from an investment into new client and creating a custom profile than to show your ad to the same users over again, who by the way might find your ad to be annoying already.

There is an option in programmatic advertising, which is called ‘capping’ though. It was created to prevent such situations and define a number of ad showing to the one particular user. Researches say that users need to see an ad more than once to actually click on it, which is very individual point – worth to admit.

In days when users watch smartphones more than laptops, programmatic advertising adjusts functionality to be super compatible. Responsive web design took a significant place on technology market long time ago, but desktop versions of ads were still more effective than the mobile ones. Programmatic technology works according to the modern tendencies and makes possible to reach the user with adequate ad even within the latest operating system version.  

What is the global programmatic market size

According to Zenith’s Programmatic Marketing Forecasts, 65% of all money spent on advertising in digital media in 2019 will be traded programmatically. This means that US$84bn will be spent programmatically in 2019, up from US$70bn in 2018. 

Programmatic advertising, which is data based, is focused on spending a part of budget on the data, actually. Take a look how grew up Global Data Market during last three years. This is a market that constantly developing.

According to the latest research, top positions of programmatic market take North America countries US and Canada now, followed by European UK and Denmark.

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