Programmatic advertising currently can be defined as the automated, algorithmic buying and selling of digital advertising placements on devices connected to the internet in real time. Also known as real time bidding, programmatic is the main force that powers the digital ecosystem of publishers and advertisers. Programmatic keeps the internet free! Programmatic ad exchanges are technology platforms that create an auction based bidding environment that connects buyers and sellers of digital media.
Programmatic Advertising Growth
Programmatic became the dominant force in digital advertising from the late 2000’s. The primitive days of digital advertising consisted of the inefficient process that was publishers selling their ad space directly to single advertisers or small ad networks who curated multiple demand. To learn more about how digital advertising broke out of the stone age, see The Evolution of Online Display Advertising.
Reasons for the massive growth of programmatic
Programmatic will grow from roughly a 17 billion dollar industry to a 33 billion dollar Goliath over the next 3 years in 2017. There are many reasons why ad dollars are shifting to be spent in a programmatic way. Here are the 3 main reasons why programmatic is so profitable for advertisers.
Reach – Programmatic allows an advertiser to reach a huge audience with only a few clicks. Almost every website on the internet that has display ads on their websites are selling their ad space in a programmatic way. This is amazing for advertisers because there is essentially an unlimited supply of ad impressions on the internet to be bought.
Highly Targeted- Advertisers who are buying impressions programmatically are able to target consumers who are segmented in a granular way. A buyer of digital media can as geographic, demographic and psycho-graphic data points to hone in on a customer who is most likely to interact with the messaging of a brand.
Cost Effective- Buying ad impressions for an advertiser is a cost effective way to reach a large audience compared totraditional advertising messages such as television; where metrics are hard to track and print which consists of physical materials that can be very expensive to produce and distribute. Digital advertising is a game of supply and demand where the scale is tipped to the supply side. Publishers salivate over ad dollars.