Programmatic may seem new, but the practice has actually been around for a while. In the last two years it has become more than just a cheap way to reach consumers. According to Zenith’s Programmatic Marketing Forecasts, spending on this type of marketing grew from $5 billion in 2012 to $39 billion in 2016. Yet, many agencies, publishers and even brands don’t understand what it is or how it works. To answer any questions you might have, we have prepared a quick introduction to programmatic and its potential.
Programmatic is the use of automated technology to purchase digital advertising through real-time bidding (RTB). Many web pages make ad spaces (called impressions) available for RTB via an ad exchange, a platform that auctions them off to the highest bidder. When you see a display ad for a company, it is probably because that brand placed the winning bid.
Impression price varies depending on the level buyers are willing to pay. This is where demand-side platforms (DSPs) come in, thanks to their ability to make faster, savvier purchases than a person sitting in front of a computer doing the same job.
Three factors make programmatic so popular: its efficiency, its ability to dramatically reduce advertising costs, and its optimization of campaigns in real time. Thanks to its integration with artificial intelligence, it also offers greater insight into consumer characteristics and behavior, delivering more flexibility and relevance in formatting and messages.
This form of marketing is useful in creating more transparent and effective campaigns. It allows marketers to see all of their opportunities on just one dashboard, leading to more strategic decisions about the best way to reach target audiences.
To optimize and manage campaigns properly, all you need to do is define a digital strategy and clear KPIs.
According to the Zenith forecast, spending on programmatic is on track to reach $64 billion by 2018. Also, eMarketer says that mobile is driving growth of programmatic, reaching almost 15.45 billion in the US.
Agencies and brands are looking for more transparency in managing and monetizing their first-party data, and programmatic can do both easily.
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