More advertisers and publishers are entering the vast world of programmatic advertising. According to eMarketer, programmatic display advertising spending will balloon up to $64 billion in 2019. Even if it remains an entirely new field, programmatic advertising is winning the confidence of investors worldwide.

The efficiency and transparency of programmatic advertising have even driven TV and mobile to join in. Magna Global reports that $600 million will go into programmatic TV this 2017 compared to the $450 million in the previous year. The mobile scene will have 85% of its ads bought programmatically by 2019, according to eMarketer.

With the numbers telling the trends, it pays to know what makes programmatic advertising attractive to advertisers and publishers.

Speedy

Being fast is at the crux of successful business in these modern times. People are jumping from one device to another and reading digital news while watching cat videos on YouTube. Going digital has molded us into efficient multitaskers, and that takes some speed to catch up with.

Programmatic advertising allows ads to insert itself in the milliseconds before a page loads or an app starts. By the time the whole screen is ready, the users already see an ad. All this is possible with real-time bidding (RTB), an increasingly popular form of programmatic advertising.

The moment a user clicks on a link, the website owner sends an ad impression into the ad “marketplace”. This marketplace, called ad exchange, has several advertisers waiting to bid on an impression best suited to their ad campaign. Once they see the impression, interested advertisers bid. The highest bidder places its ad on the page just before it’s done loading.

Targeted

It’s not just about speed, but also about potential. It only makes sense that advertisers want to put up an ad in front of users who are most likely to be customers. The best way to do this before was by buying bulks of inventory from a certain website that’s best predicted to have the target audience a certain business is after.

For example, a shoe company would buy impressions from a shoe website. This practice, however, is being replaced by programmatic advertising.

Programmatic advertising is not [just] about the website, but about the user. It has replaced the old “spray and pray” method by cherry-picking users with the highest potential to be customers. A website owner sends ad impressions about the website, web page, and user via the supply-side platform (SSP). This allows ads to determine the context, moment, and the kind of user (based on demographic, behavioral, and psychographic data). The advertiser’s demand-side platform (DSP) then processes the similarity of the impression to the ad campaign and determines whether to bid and at what price.

Data

None of the speed and specificity will work without data. Here are some of the kinds of data programmatic advertising uses.

  • Cookies – when collecting data about the user, cookies are the best. They are small pieces of data that holds information about a user on a website.
  • IP Address – using the IP for data is called IP tracking or IP targeting. This hold valuable data about where the user is and the kind of environment he is in (e.g. office, home, etc.). Specifically, it contains data on your country, region, city, ZIP code, and longitude and latitude. This is used for geolocation advertising.
  • Big Data – this contains information about who, where, interests, and mode of communication preferred by users. Forbes reports that Big Data makes to possible for advertisers to “deliver consistent omnichannel customer experiences across all channels.”

…and this is You!

Now you have an idea about programmatic advertising and how it works. We asked who needs this new piece of advertising platform, and it’s clear that if you want speed, targeted advertising, and lots of data about your audience, programmatic is the way to go.

Any business that’s going into online advertising should utilize the immense capabilities of programmatic ads. With more investors projected to come in over the years, you can expect data to be of higher caliber than ever. 

Programmatic advertising will take time to fully master though. If you find your interest piqued, do your research and find the best digital partner to consult. Don’t worry about being a total newbie because even the field itself is one. The promises are bright and the trends have been positive. Any business, including yours, need to start going programmatic.