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What Is Programmatic Advertising, And Why Should I Care?

January 4, 2016 by Aimee

In the early days of digital advertising, things were simple. Marketers knew which websites their clients loved, so they’d contact the publisher of that website and buy some banner advertising on the homepage. 20 years and a several million websites later, it’s not so easy. Not only is the web itself exponentially bigger, we have more screens, more media types and more web-savvy users than ever before.

Programmatic advertising offers a new way to reach more of those users at the moment they’re most receptive, and on the device they’re using at that moment.

If you’re not familiar with the term or the concept, don’t worry - you’re not alone! In an ANA study  last year, 12 percent of marketers admitted they’d never heard of programmatic media buying - a key aspect of programmatic advertising  - and 29% confessed they’d heard of it, but didn’t understand it.

So what is programmatic advertising, and how can it make your digital advertising campaigns more powerful?  Joe Zawadzki, CEO of MediaMath, defines it as "The use of technology to automate processes and the use of math to improve results.  It is the future of marketing, available now."

Essentially programmatic advertising is advertising powered by data. Marketers can use their own first-party data, coupled with available second- or third-party data (available from specific vendors) to target consumers on the internet. The data can identify users by who they are demographically, where they’ve shopped, or what they’ve watched, read or engaged with online. While the data can get very specific (like “soccer moms in New Jersey who drive minivans and enjoy gourmet cooking”), it will never allow the user to be personally identified. 

Programmatic media, purchased based on data, solves the huge problem of media fragmentation. When consumers just watched TV on TV, and only listened to radio on their radios, ads could be easily purchased based on the medium and demographic targets. Now, which people streaming football games on their phones and listening to their favorite radio shows on their laptops, it’s a little more complicated. Programmatic media targets the user herself via the content she consumes, rather than trying to reach her when she’s watching TV or listening to the radio.

This shift to programmatic advertising is then beneficial for three key reasons:

  1. Targeting the user with behavioral data is far more specific than targeting with broader demographic data. The more we know the user, the more likely we are to reach her on the sites, programs, magazine and radio stations she favors. Since programmatic media buying doesn’t limit us to just one publisher or radio station, we have a lot more opportunity to reach that consumer. Furthermore. the collection of data we get from multiple sources in programmatic will give us a much better idea of who we’re targeting and whether that person is the right audience - versus the looser demographic and user targeting we’d get from a radio/TV station or single publisher.
  2. Programmatic advertising, like all digital advertising, is “always on” - and so are consumers. Advertisers who leverage programmatic channels are far more likely to reach and engage consumers online, and use their advertising budgets more efficiently and effectively. With linear TV and radio, and even with direct buys on publisher websites, there’s no guarantee your target customer will be on the site (or show) when your ad is running.
  3. Like most other digital channels, programmatic advertising happens in real-time. That means campaigns can be optimized on the fly. So if your creative isn’t performing as well as you’d like, it can be tweaked or swapped in real-time to improve results. Creative, targeting and budgets can be adjusted quickly and easily. It also means you have access to real-time reporting so you’ll always know how your campaigns are performing, the state of your current spend, and what your ROI is.

Programmatic advertising symbolizes a true revolution in digital advertising overall: It promises to make advertising more targeted, more efficient, and more effective than ever. It’s still evolving, improving and growing in adoption every day, and soon it will be the standard way to purchase digital media. Why not try it now, and see how much more effective your online advertising campaigns can be?

Want to learn more about programmatic? Download our free infographic - "Life of a Programmatic Ad in 200 Milliseconds!" 

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