What is Programmatic Advertising?

The term Programmatic Advertising covers a wide range of technologies that have automated the buying, placement and optimization of advertising. The phenomena has replaced traditional methods of advertising such as phone calls, faxes and postal mail. Programmatic ad buying has changed the face of online advertising, but there’s still confusion around its use.

Programmatic Ad Buying

Programmatic ad buying is a process of using software to purchase digital advertising. The traditional process involves tasks like Request for Proposal (RFP), human negotiations and manual orders. A lot of people get confused by thinking it as same as buying ads through computer-run auctions, which is known as real-time bidding. Basically, programmatic ad buying is any ad buy that gets processed through machines.

Why do we need programmatic advertising?

Earlier, we used to buy digital ads from sales people, which was expensive, time consuming and error-prone. Humans have the tendency of coming late to work, get sick and need to sleep, but a machine will never do that. Programmatic advertising is making the ad buying process more efficient and cheaper, by automating everything.

Programmatic advertising is used to change some of the most basic processes, like sending insertion orders to publishers and dealing with ad tags. It may mean less ad buyer jobs, but it also lets both marketers and sellers devote more of their time in planning refined, customized advertising campaigns.

Future of Ad buying

It is nearly impossible at the moment to suggest what portion of advertising is now traded programmatically, but it is on the rise. There are a lot of agencies keen to buy as much media as possible through programmatic channels. Some major brands like American Express and P&G have expressed their intentions to buy up to 75% of their digital ads through programmatic ad buying this year.

There are brands that have even created in-house teams to carry out their programmatic ad buying as they spend more of their advertising budgets that way. However, it’s mostly online ads that are traded programmatically, but gradually media companies and agencies are discovering ways to sell “traditional” media this way. Hulu has tested it with auctioning off video ads through private trading. ABC has also announced that it would let advertisers buy ads programmatically for its digital content.

Wrap Up

As people will learn more about programmatic advertising, it will probably account for most of the advertising on the web. It is not the A.I. Apocalypse Stephen Hawking has predicted and it won’t put advertising people out of their jobs. Along with a digital attribution model, programmatic advertising can really help online businesses to enhance control over their advertising expenses.