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What is Programmatic Advertising?
Content Marketing

What is Programmatic Advertising?

March 22, 2024

The advertising world is full of jargon, and new phrases are constantly emerging. One you might have heard in the past couple of years is "programmatic advertising." So what is it, and why does it sound so technical? Take my hand and follow me to the world of advertising, where we'll venture further in to discover the kingdom of programmatic advertising.

If you're a complete newcomer to the advertising world, let me set the scene for you. The way advertisements make it from your business to a little 300 × 250 box on your screen is that a media buyer from an advertising agency bought that space at that time for that particular advertisement. The way the media buyer chooses that specific part of space-time to buy for the ad is much more complex, including the consideration of price rates, target audience demographics, layouts and more. If some of you thought "is there an easier way?," you're not alone. The advertising world asked the same thing, and programmatic advertising was created as the answer.

The programmatic advertising kingdom & RTB

Programmatic advertising is when software is used to buy digital ad space rather than people. Move aside human media buyers, robots are taking over! Swapping out people for machines is a win-win for advertisers. Developing ads and picking the best space takes a lot of manual labor. The complex considerations that went into each bid and purchase of ad space can now be done in milliseconds by efficient, calculating machines. The bidding of ad space can be automated, and by telling your programmatic software specifically what type of audience you're trying to reach, the advertisements can now be targeted more efficiently than ever. Welcome to the programmatic advertising kingdom.

RTB: real time bidding

Before we dive too deep, let's take a quick detour into RTB forest, where ad spaces grow on trees for the robots to harvest. The expression RTB (real time bidding) is commonly used interchangeably with programmatic advertising, but RTB is actually just one part of the process, and the skeleton on which programmatic ad buying is built. Ad space is bought and sold in a digital auction, where the winning bidder gets to display their advertisement in that space. This happens in real time (hence real time bidding), and it's what programmatic advertising software uses to buy ad space. To clarify, RTB is the auction, and programmatic advertising is the full automatization of the bid, purchase and ad displaying process. Okay, let's get back on track to programmatic!

In the programmatic advertising kingdom, it's the machines that do the work, and the advertisers that rule from campaign castle. It's the human advertising experts who are the kings and queens, ruling from campaign castles, and they determine the laws of the land. The advertisers set the rules and extent of the campaigns, while the programmatic software handles all the menial tasks. They will set the prices and strategies, carefully select the channels on which to promote, create thoughtful campaigns, and more. No technophobia needed, people are still deeply involved in the process.

Why programmatic advertising?

Here's the rundown of why programmatic advertising is the greatest kingdom to be a part of in the world of advertising:

Efficiency

We all know people, right? No matter how many good qualities they have, there's always a degree of unreliability and room for error. Robots do not get sick, don't need vacation time and can't break the rules. While I 'd much rather have a human coworker and friend than a robot, when it involves buying and selling ad space, these things matter. Programmatic advertising removes slow-computing people from the equation, making the ad buying process hundreds of times faster, and less likely to include error. Plus, the programmatic advertising software can make small, immediate changes to campaign variables that humans may not consider, or have the time to change.

Optimization

Robots are much better data analyzers than people, and programmatic software can change dozens of variables within your campaign outlines to improve the campaign and get your desired ROI. The human side of marketing can establish budget, objectives, network reach and more, and the programmatic software will run with it to get the best bang for your marketing buck. Say hello to supplying hyper-relevant, cross-channel experiences that boost brand awareness, reduce churn and transform users at break-neck speeds.

Cost

Why hire an expensive, potentially unreliable human to buy and sell ad space when you can get a machine to do it better, and for less? Adopting programmatic advertising will result in a tangible cut of media purchasing costs, as well as let you budget out your (less-tangible) brain power more efficiently. And also, with a machine at the helm, your campaigns will achieve better ROI than would be possible with campaigns run by their human equivalents.

Campaign Quality

With the tedious tasks handled by programmatic software, your marketing team has the time and energy required to establish strategic tactics, and plan sophisticated, effective advertising campaigns. Each of these complex campaign plans will be performed by the programmatic software that has the ability to rapidly adjust tiny variables to get you the best bang for your campaign buck. After each campaign run with programmatic advertising, you'll also get detailed, data-filled reports so you can better prepare your next campaign.

Who needs programmatic advertising?

We all know that you don't bring a human to a robot fight. In the digital ad buying world, it's machine vs. machine, and ad space is bought and sold faster than you can blink an eye. Programmatic ad buying can offer hyper-relevant, hyper-targeted display ads to the audience you want to reach. If you want to run display ads online, you'll want to utilize programmatic ad buying. Besides, human interaction is so 20th century.

Programmatic advertising is big, and it's not something that will disappear in the next few years. According to a study from eMarketer, US programmatic digital display ad spending will hit $22.10 billion in 2016. The kingdom is growing, and overtaking new advertising territory every day. Digiday even called programmatic "the future of ad buying," so maybe a world of robots and people living in unity is more probable than Terminator had us believe.

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