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Is Programmatic Advertising the Future of online advertising?

May 27 2020 03:05:52 / By Mari Muthu

Remember those days when there was a commotion in the industry and brands were investing most of their efforts and times in finding such a person who could handle ads for them?

With the industry getting evolved and adopting new technologies, programmatic advertising is overpowering the need to run ads with human interference. The increase in programmatic channels depict that they are at the forefront of digital marketing - compelling marketers and brand owners to be ahead of the competition.

In fact, back in 2019, the prediction stated that approximately 65% of the money spent on digital advertising was traded programmatically. In this post, let’s find out more about this advertising form and see how far it can stand up, in terms of popularity.

Defining Programmatic Advertising:

Several experts have been referring to programmatic advertising as the BlackBox of digital marketing, owing to its exponential growth and the tendency to fill up with various industrial jargon. 

Hence, for a novice, it might be difficult to wrap the head around this subject. Putting it in simple words, programmatic advertising is the automated transaction of selling and buying advertising on the internet. 

It is one such process that uses varied platforms to sell inventory on different publishing sites. From an advertising perspective, it is about purchasing inventory and placing ads on publisher’s sites. 

A few years back, this used to be a manual process, comprising requests for proposals (RFPs), negotiations, and manual insertion of orders. However, today, the entire transaction takes place in a few seconds, courtesy to automation.

The Working Methodology of Programmatic Advertising:

It’s not easy to figure out how this form of advertising works. Hence, here is a complete guide to help understand the process more comprehensively:

  • Whenever somebody lands on a website that has active programmatic advertising, it begins automated bidding to cater to an ad to this specific visitor.
  • Now, the publisher lists the ad space for this visitor on the supply-side platform (SSP). This acts as a seller for the publisher, allowing advertisers to figure out the features of the website and the ad space that enables DSPs to make a bid. Principally, they then advertise the ad space for sale.
  • After the SSP has received information on this ad space, user’s cookies are then analyzed to know varied factors, like demographics, interests, location, and more.
  • And then, the equivalent demand-side platform (DSP) evaluates the information that the SSP provides. DSPs generally act for advertisers to select the ad space that aligns with the targeting considerations and budget of the advertiser. Then, it allocates the placement of the ad based on the characteristics of users and the website.
  • From the advertiser’s end, the DSP makes the bid on the placement of the ad. This entire process takes place in real-time, which is the reason why programmatic advertising is sometimes called real-time bidding (RTB).
  • Once SSP gets the bids from different DSPs, it picks up the winner. Different SSPs use numerous strategies for bidding. Generally, client-side bidding, waterfall bidding, and header bidding are a few that are considered the most globally.
  • After the winner is picked, SSP then displays the ad to users on the publisher’s website. This process is executed in a few milliseconds while the page is loading for visitors.

Different Formats of Programmatic Advertising:

Almost a decade ago, it was only about display advertising; however, today, programmatic advertising covers a varied range of advertising formats.

  • Native Video:

Several brands choose native ads over others because they can be easily customized to meet the feel and look of the publisher’s website. This, in turn, results in improved visibility and better engagement with ads. 

Furthermore, native ads also help reach the market quite quickly as a bundle of assets is used to fill different ad templates.

  • Lightbox Ad:

Lightbox ads are those responsive ads that have the competence to fit any space, based on the display screen. Typically, these ads contain videos and galleries with images that allow customers to engage effectively.

  • App Promotion Ad:

The app install platforms help in creating such an ad that assists in increasing the app download number. The app can easily be created with an interstitial ad that contains YouTube videos or images, along with appropriate descriptions and intriguing titles. 

App install ads are generally designed to spread awareness about a specific app and let users install it directly.

The Future of Programmatic Advertising:

Although programmatic advertising is not a new concept; however, it is evolving consistently. Latest regulations, technologies, and best practices are helping to make it an attractive as well as an integral part of digital marketing. 

But, how does the future for this advertising type look like? As per a recent report from eMarketer, the expense of programmatic advertising is about to touch the mark of $69 billion by 2020, which is 4x more than 2015. 

And, this figure about to increase in the future, it is evident that programmatic advertising is here to stay. If talking about the giants of the industry, like Google and Facebook, advertising is at the core of their business. 

Apart from these two, Amazon is increasingly setting its foot in digital advertising and is about to become the third major player in the industry. That being said, programmatic advertising is ready to invade the rest of the world. 

And, brands can easily avail their proven advantages, including scalability, quality reporting, superior targeting, and more.