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What is programmatic advertising?

  • Article by

    Amie Whale

What is programmatic advertising? eighty3creative

Programmatic advertising is on the rise as a completely optimised automated online advertising system. But is it worth it? Delve into the advantages and disadvantages of programmatic advertising to help make the all-important decision.

There are a million and one ways to advertise these days. Marketing is becoming so specialised that each ad is almost as unique as the targeted individual it’s designed to entice. 

Nowadays, there are so many platforms offering so many tactics, that trying to make the most of your online marketing strategy has become a real headache. If only there was something that could do it all for us? This is where programmatic advertising comes into play.

It’s just a matter of time before automation, and AI takes centre stage in the world of online advertising, with global programmatic advertising spending valued at $129.1 billion between 2017 and 2021

The question is, should your business be using it?

What is programmatic advertising?

You can define programmatic advertising as a streamlined automated process for buying and selling online advertising. This automation takes place on one platform which compiles every transaction quickly and efficiently.

All in all, it’s a completely optimised automated online advertising system that buys your business online advertisement space.

Through personal information, advertisers can segment their audience before targeting them with specific ads at ideal times. Sophisticated algorithms integrated into the programmatic advertising systems enable these ads to be placed effectively.

It sounds complicated, but that makes sense when you think about it, seeing as it’s taken all the intricacies of modern advertising and put it into one streamlined automated system.

The main benefit of programmatic advertising is that it removes the manual, long-winded process of finding online advertising space. It also differentiates between various types of data, such as:

  • Demographics
  • Location
  • Preferences
  • Interests
  • Behaviours
  • Climate
  • Time
  • Devices

A programmatic advertising system works in real-time, targeting the right audience with a specific product.

There are three types of ads that can be purchased through programmatic:

  • Standard banner ad – Appears on the top or sides of site pages
  • Native banner ad – Sponsored or recommend content
  • Rich media banner – Interactive visual animation with invitational options

27% of the top 10 thousand websites worldwide were using header-bidding technology in April 2021.

Advantages of programmatic advertising

1. Efficiency

Consolidating advertising under one platform makes things so much more efficient and easier to process. Algorithms now take care of what was a gruelling bidding war between people competing for online space.

Now, programmatic advertising handles this issue, removing human interference or delay. This sophisticated system uses technological logic, personal data, and advanced mathematics to reach results so much faster than a person or team of people ever could.

2. Targeted

Programmatic advertising can target customers precisely in real-time. Combining tactics, data, and personalisation across various devices and platforms, programmatic signifies how segmentation is indispensable in today’s marketing.

Programmatic marketing enables segmentation with a specific focus on user behaviour, ranging from purchase activity, preferences, and lifestyle habits. This means your marketing budget will most likely pay for ads being delivered to the right people at the right time.

3. Fast

So many companies are investing in programmatic advertising because of its ability to generate speedy results. What would take marketers days to conduct ad buy strategies or structure-specific targeting data, programmatic does in seconds. What’s more, it does it all at a minimalised cost.

4. ROI

By operating quicker and more efficiently, programmatic reduces costs over time to serve you with a better return on investment. While the system keeps churning away results, you save time and utilise your ad budget more effectively.

Disadvantages of programmatic advertising

1. No human control

Although we like machines doing everything for us, we are not quite at the stage of technological singularity yet. You still need a programmatic expert to launch your system and ensure you get the best results.

You need the right team behind you to make sure everything is in order and ticking along nicely. For example, programmatic advertising has the potential to inappropriately match your ads. Imagine if someone was in the market to buy a car, was reading a news report on a car crash, and your ad popped up? Not good.

2. Lack of transparency

With such an untapped complex system, it’s difficult to obtain complete transparency. People want to know where their money is going, and a fool-proof version offering complete transparency is just not available yet.

3. Third-party cookies

The latest restrictions for obtaining personal data through third-party cookies will stunt programmatic advertising. As an automated system relying heavily on third-party data, this will no doubt throw a spanner in the works.

User behaviour is a key component for programmatic advertising, and this is normally gathered by gaining cookies information. But it’s not all doom and gloom. Things are evolving rapidly.

Programmatic advertising vs direct buying

Programmatic advertising is quicker and efficient than direct buying, leaving you with more time to run your business. However, it’s not controlled by a person, so cannot think like one.

Direct buying entails a lengthy process of finding a publisher, negotiating a price and buying inventory before the advertising takes place.

All this takes time, effort, and money. What’s more, there is no guarantee on price because it’s always negotiated.

As we’ve discussed in length, programmatic advertising takes all this stress away. It’s faster, more economical, and costs less in the long run.

The rate at which programmatic advertising works, and the money it saves, makes for a better option than direct buying. Plus, it will continue to develop and improve while direct buying will fade away, becoming obsolete in comparison. 

Need more support? For any help and guidance on utilising programmatic advertising, get in touch with eighty3 creative.

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