What is programmatic?

In digital advertising, there's an effective strategy that's been getting a lot of attention in recent years: programmatic. But what exactly is it, and how did it become the bread and butter for many digital marketers? Let's dive into programmatic history, from its humble beginnings to its current status as an industry staple in digital advertising.

What is Programmatic Marketing?

To best understand programmatic, I think a short example will be helpful to share. Picture this: you are an advertiser in the early 2000s looking to get a digital banner ad placed on a related website. You do your research and find a great website to host your content. You reached out to secure a partnership with the brand, but unfortunately, you’ve missed out. This website’s advertising space is in high demand, and unfortunately, while you were figuring out if this website would be the right place for your brand’s ad, another brand has already secured this ad space. Now, envision a different scenario: the current day. Instead of cumbersome manual negotiations, we now rely on algorithms and data to orchestrate the buying and selling of digital ad space with precision and efficiency. It's akin to having a digital assistant that targets the right audience, bids on ad inventory in real-time, and optimizes campaigns seamlessly. But how did we get to this point?

A Brief History Lesson:

Programmatic marketing didn't just appear overnight; it's the culmination of years of innovation and technological advancement. Back in the early 2000s, ad exchanges and real-time bidding (RTB) platforms laid the groundwork for automated ad buying. As smartphones and social media grew more prevalent, advertisers realized the need for more efficient ways to reach consumers across various devices and channels. And thus, the era of programmatic marketing was born. With Internet advertising revenue estimated to reach $723.6 billion by 2026—and all but $8.4 billion coming from the U.S. (PwC, 2022) —the growth trajectory of digital advertising underscores the significance of programmatic marketing in this landscape.

A Key Difference

Before delving further, let's distinguish programmatic marketing from its counterpart: endemic marketing. Unlike programmatic marketing, which uses an automated approach to ad placement across various websites, endemic marketing, also known as native advertising, adopts a direct strategy to reach audiences. It focuses on partnering with related websites or media to promote products in a targeted manner, seamlessly integrating with the platform's content. Think sponsored articles, branded videos, or influencer partnerships tailored to specific audience segments.

Pros and Cons:

Now, let's talk about the good, the bad, and the ugly of programmatic marketing:

Pros:

• Efficiency: Say goodbye to tedious paperwork and manual negotiations. Programmatic marketing streamlines the ad-buying process, saving time and resources.
• Precision Targeting: With programmatic marketing, advertisers can target specific audience segments based on demographics, interests, and behavior, ensuring their ads hit the mark every time.
• Real-Time Optimization: Need to tweak your campaign on the fly? No problem! Programmatic platforms allow advertisers to optimize their campaigns in realtime, maximizing performance and ROI.

Cons:

• Ad Fraud: Programmatic marketing's automated nature can make it susceptible to ad fraud, such as bot traffic and invalid clicks. Advertisers must stay vigilant and implement measures to combat fraud.
• Brand Safety: Advertisers must be mindful of where their ads are displayed to avoid associating with objectionable or inappropriate content.
• Data Privacy: As data privacy regulations become more stringent, advertisers must comply with guidelines regarding consumer data collection and use in their programmatic campaigns.

In Conclusion:

Programmatic marketing has emerged as a game-changer in digital advertising despite its challenges. Advertisers can reach their target audience precisely and efficiently by leveraging technology and data-driven insights. As we look to the future, programmatic marketing is poised to continue its reign as a dominant force in the ever-evolving landscape of digital advertising. The better we can understand programmatic, the better we can serve our clients and succeed in the digital advertising landscape!