What is Programmatic Advertising.
Programmatic advertising is the automated buying and selling of online advertising. Targeting tactics are used to segment audiences using data so that advertisers only pay for ads delivered to the right people at the right time. The market for digital advertising space is run by ad exchanges, who operate auctions that bring together both parties of the transaction.
- Advertisers; who want to buy advertising space on the internet.
- Publishers; the website owners with digital space to sell.
The four components make up the framework of programmatic advertising. A demand side platform (DSP), supply side platform (SSP), data management platform (DMP), and an ad exchange.
Programmatic advertising uses algorithmic software that handles the sale and placement of digital ad impressions via ad exchange platforms. In addition, programmatic incorporates traffic data and targeting methods to serve impressions far more accurately, efficiently and at mass scale. This means better ROI for advertisers and publishers.
In every purchase of online ad space, there are two sides: the buyers (advertisers) and the sellers (publishers). Each side uses a computerized platform to facilitate the transaction on the ad exchange. Publishers use Supply-Side Platforms and advertisers use Demand-Side Platforms (DSP).
Benefits of Programmatic Advertising.
The advantages of programmatic advertising include,
1: Reach. Programmatic advertising supports multiple ad exchanges and networks, which gives advertisers access to far more ad space on thousands of websites at once. This allows advertisers to advertise at scale at affordable prices and with no extra work.
2: Transparency. Programmatic advertising gives advertisers and publishers real-time access to data about ad placements and activity, which helps to maximise transparency.
3: Data insights and real time reporting. Programmatic exchanges provide access to real-time data and advanced reporting about ad placements and performance; enabling advertisers and publishers to optimise campaigns more accurately.
4: Relevancy. Programmatic buying gives advertisers access to a massive advertising inventory across multiple ad exchanges and networks. These include premium inventory and private marketplaces with high quality traffic.
Programmatic Advertising is the future, now.
When it comes to programmatic, the future is already here. In 2023, digital display ad spend for programmatic will reach nearly over $96 billion. Almost double what it was in 2018 when advertisers were spending just $49.2 billion on programmatic digital display. Furthermore, programmatic advertising spend is increasing every year, and in the USA alone over 85% of display ads are forecast to be bought programmatically in 2023.
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