Programmatic digital advertising refers to the process of automating the buying of digital advertising, instead of using the manual process of negotiating and buying ad inventory on specific websites or ad networks. It also optimizes digital advertising campaigns, instead of involving publishers directly. Programmatic is designed as a format where optimizations based on AI and machine learning replace human negotiations. Does that mean humans are no longer needed for digital advertising? No! In fact, the human element is crucial to the process.
The biggest benefit of programmatic is not that it is automated. The main benefit is its intrinsic ability to allow for precise audience targeting. Instead of buying space on specific websites and platforms, we can use programmatic buying to target a specific audience. We can target people who match behaviorally with your brand’s customers. Then ads are served to that audience on the sites they visit. It allows for better targeting and costs efficiencies, a true “win-win.”
The unlocked opportunity of programmatic digital advertising
Programmatic digital advertising opens many new opportunities that are absent in manual ad placement. It lets us buy digital media without a preset price, meaning you pay only for the impressions your ads actually get. We can also set a minimum budget or a minimum number of impressions, thereby making it more flexible. Programmatic allows us to purchase digital media across various publishers—something that reduces administration costs.
And as mentioned, since programmatic digital advertising arranges bids for each individual loading of a website, you can target your audience far more precisely. By leveraging customer data, we can identify content that resonates with each website viewer and target them on sites where they are most likely to engage and when they are most likely to engage.
Programmatic digital advertising continues to be the future of advertising. Currently, it’s primarily online ads that are bought and sold programmatically. However, while in the past it has been limited to web banners, it has expanded to include video, social, search, audio and advanced TV.
The ultimate goal of this advertising format is to boost transparency and efficiency for both the publisher and the advertiser. In 2018, 80 percent of digital display advertising in the United States was done through programmatic digital advertising (Source). In 2019, advertisers were poised to spend close to $60 billion on programmatic display. By 2021, it is estimated that almost 88 percent, or $81 billion, of the total digital display ad dollars in the US will take place programmatically.