What is Programmatic Advertising?

Programmatic advertising is a rapidly growing and lucrative marketing channel. In 2023 it’s projected to reach $133 billion, accounting for 91% of US digital ad spend according to eMarketer.

It’s also a complex and evolving area, with the technology changing and improving all the time. The key to success with this approach is a good understanding of the system and the data. But it’s not a case of simply setting a campaign and then forgetting about it – the best results are delivered by using a dynamic, in-depth strategy with short- and long-term goals defined from the start.

When a customer goes to a website or other media outlet that’s configured for programmatic advertising, the publisher puts up ad impressions for auction in an ad exchange. This makes the customer profile available to all advertisers who have a DSP and are willing to bid on the impressions. The highest bid wins the auction and the ad is displayed to the customer. In practice, this happens in real-time and is highly targeted to the specific user.

This process is known as ‘real-time bidding’ or RTB. Advertisers can use DSPs to identify the right publishers and mediums for their ad campaigns, then create ads on those platforms which are programmed to be relevant to that particular audience. The DSP then automates the purchase of the ad impressions, ensuring that the right message is delivered at the right moment.

Brands can do this work in-house or work with a specialist agency. The advantage of an agency is that they have the knowledge, tech and resources to do it more efficiently and effectively. An in-house team would need to consider their own capabilities and how much investment they want to make in the DSP, notes Harcus.

While programmatic is still a relatively new channel, it’s being used to target existing customers as well as find new ones. This is called retargeting and can be used to offer upgrades or new products, for example. It can also be used to find potential leads by identifying audiences that have similar characteristics to those already on your database.

As programmatic advertising evolves, so too will the types of data marketers can collect and use. For example, AI will be able to map the results of ad viewing metrics with users’ personal data and determine what products or services they are most likely interested in purchasing.

With the growth of this cutting-edge approach, it’s worth examining some real-world examples to see how it can be applied and what the benefits are. For instance, Child Rescue Alert moved to programmatic advertising in 2016 and saw a huge return on its investment by targeting parents who’d lost children. This allowed the charity to expand its appeals to areas where children had gone missing and help save lives. Another success story comes from The Economist, which ran a campaign that targeted intellectually curious readers with provocative, witty and humorous headlines, in order to encourage subscriptions.

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