The Rise of Programmatic Advertising
Advertising is a continually growing industry in the US, with digital advertising quickly becoming the most prominent advertising form. The US spent nearly $187 billion on ads in 2015.(1) By 2018, one in three dollars of total advertising revenue will be used for internet advertising. Over the next four years, internet advertising will likely equal, or even overtake, TV as the largest advertising platform. With this increase in digital advertising, the method to buy digital advertising is also evolving with the rise of Programmatic ad buying.
Instead of the traditional ad buy process, involving RFPs and human negotiations, programmatic ad buy uses software to purchase digital advertising. It helps to optimize the buying and placement of paid media through a programmatic marketing platform that automates the buying and selling of online advertising. The automation of the process delivers stronger business performance for brands.
This shift to an automated process is similar to evolution of vacation planning. Before the internet, you had to call a travel agent or hotel to book a room, park passes and excursions. Today, all of that is done on a computer.
The Secret Recipe
Programmatic ad buying uses data generated by your brand’s website, social media, and mobile app visitors. The programmatic software can detect relationships in the data otherwise overlooked by a marketing team, and optimize ad buys for a better ROI.
Visitors to a company’s website, social media profiles and apps leave behind lots of valuable data. Companies can collect that data and use it to optimize retargeting ads and PPC campaigns based on the most viewed pages.
Retargeting, pay-per-click campaign, and real-time bidding are all examples of paid media. Demand Side platform, Data management platforms. (2)
Programmatic ad buying needs data from both owned and paid media to create the most efficient campaign. Without data from both types, there is potential for missing a large part of your audience.
The Pros and Cons
Pros: Efficiency. Programmatic advertising technology allows the process to be more streamlined, with less menial tasks like sending insertion order to publishers and dealing with ad tags. Programmatic ad buying also has less of a risk for error compared to
Cons: Rise of the robots. Programmatic technology takes care of the menial tasks required for digital advertising, which means humans don’t have to. This new process will probably mean fewer ad buying jobs in the future.
But it’s not all bad, humans will still be required to optimize and plan the sophisticated, customized campaigns. Programmatic ad buying allows ad buyers to spend more time on the important campaign planning, instead of wasting time on the boring busy work. (3)
Programmatic in Action
The travel industry, one of the biggest advertising industries, has already put programmatic ad buying to good use. The TUI Group, the world’s largest leisure and tourism company, has adopted the programmatic advertising approach. It developed a platform to collect, integrate and act on data generated across its integrated travel service offerings. The data allows TUI to use what it calls “dynamic retargeting” to reach relevant consumers with its product advertisements. (2)
1. 2015 Ad Spend Rises To $187B, Digital Inches Closer To One Third Of It
2. Programmatic Media Buying: Sitting at the Intersection of Owned and Paid Media