When you work in digital marketing and advertising, there are so many terms thrown around that it can be hard to keep up. Attend a conference and even the most experienced marketer can find themselves floundering at times because someone has come up with a new term to explain something that was perfectly simple before. Keeping on top of the buzzwords and definitions is essential though, so we’re here to cover programmatic advertising for those of you who have maybe heard of it but have no idea what it actually is.
So what is it? Well, it’s been called “the beginning of the end for all manual processes in digital advertising”, which isn’t exactly a catchy name, and probably isn’t even accurate. So we’ll start at the start. Traditionally, adverts have been bought and sold manually by ad buyers and salespeople, which isn’t a perfect system and seems out-dated when it comes to the modern world of digital advertising, so that is why programmatic media buying exists.
What Is Programmatic Advertising?
So what is the definition of programmatic advertising? State Of Digital says that: “Programmatic media buying, marketing and advertising is the algorithmic purchase and sale of advertising space in real time” while Econsultancy calls it: “Programmatic quite simply means automatic. Programmatic buying refers to any ad space bought automatically on a web page, through either bidding for the space or buying it directly so it’s guaranteed to be yours.” Digiday put it even more simply, saying: “It’s using machines to buy ads, basically.”
The significance of this is that it both speeds the process up by removing the human element from the more menial parts and also cuts down costs for the same reason. This allows more time and money to be spent on actually planning and implementing the ad campaigns, and the rise of programmatic advertising has led to a change in the way both agencies and in-house marketers are working, which only seems set to continue.
How Does Programmatic Advertising Work?
If you’ve used Google AdWords, you’ll have a good idea of how this works, the difference is that AdWords is based around search ads and this is for display ads that appear on websites, etc. It allows you to target and segment your advertising by various demographics and geographic factors as well as deciding where and when the ads appear, all aspects that you would normally need to negotiate when buying the ads, which in theory gives you a lot more hands-on control.
The information you provide about who you are targeting is then used to determine which websites your ads will appear on and the process of matching them up and assigning the space to the highest bidder is all done automatically. This can be through Real Time Bidding or also the more direct approach where an advertiser buys a set number of impressions.
What Does The Future Hold?
It may have started out in digital advertising, but programmatic advertising is rapidly moving into other forms of media too – like TV, radio and out of home advertising – unsurprisingly when there are so many benefits. It’s on the up and up at the moment as more agencies switch to it as their main tool for ad buying. According to the IAB, programmatic ads now represent about 60% of all digital spend in the UK, with 93% of agencies and 87% of advertisers using it. LinkedIn announced last week that it is introducing programmatic buying for display ads on its desktop site, through either open auctions or Private Auctions.
Its head of products Russell Glass said: “We don’t want to reinvent the wheel. We want to build table stakes capabilities into our platform in a way that highlights our differences, but is kind of what marketers have come to expect.” LinkedIn has trialled this option over the last few months in some sectors and had already offered programmatic advertising for sponsored content, which has grown by 80% in the first quarter.
Continued developments like this demonstrate that programmatic ads are not only here to stay but are going to be a part of the way all display ads are bought in the future.
Do you already use programmatic advertising or are you planning to in the future? Do you think it’s the future of display advertising? Let us know in the comments section or via social media, and don’t forget to subscribe to the blog to receive more articles straight to your inbox.