Online advertising is all set to march towards automation. With new methods being tested to create coherence around the media buying space, online advertising industry is improving. As advertising technology is evolving, many ad tech companies and agencies are opting for programmatic advertising.
It has been designed to largely replace the old method of buying and selling of advertisements directly or through agencies and ad networks. The goal is to drive more efficiency and transparency between the advertisers and publishers.
Programmatic advertising has proven to be a great tool for the online advertising industry and has been consistently growing since its inception. According to Business Insider, US programmatic advertising revenue has quickly grown to a $15 billion industry in the last few years. Furthermore, programmatic display advertising is expected to grow 37% in 2016 and reach 65% by 2020.
Programmatic buying works with the demand side platform of programmatic advertising. While it is just a part of programmatic advertising, it has proven to be a powerful tool for the marketers. It automates all of the processes and helps advertisers to set parameters such as bid price and targeting rules like location, demographics, devices, etc. This process will work through a real-time bidding (RTB) system, by layering the set parameters and the available audience data all within the same platform.
So the question here is, why do advertisers prefer programmatic buying over the old school methods of online advertising? What could be the benefit in doing so?
Programmatic buying helps advertisers to set budgets and target impressions based on factors such as interest, location and age group to find the right target audience. It offers a transparent pricing model to the advertisers. Through automated media planning, it provides enormous benefits to brand advertisers. There is a huge advantage for the buyers to select right impressions using a third party data to target the right audience.
The targeting is precise and up to the mark, making ads reach the right users to create a brand recognition. Retargeting helps keep brands in front of bounced traffic after they leave your website. The system automatically decides whom to serve the ads based on the available data. Certain algorithms also allow the advertisers to adjust their biddings based on performance data to achieve a better ROI. Through programmatic buying, buyers can purchase ads that are more viewable to the audience.
With so much to gain from programmatic buying, ad tech companies have a lot to offer to advertisers. The demand side platform and the data management platform together are bringing up about a lot of options for the advertisers, publishers and the ad tech companies.
Programmatic buying will soon dominate the online advertising market. It has evolved rapidly and will move beyond traditional buying methods. Currently, display holds the market for programmatic buying, soon other forms like video, mobile and native will also make a foothold and create a demand in the industry.
-by Ashish Shah, Founder and CEO, Vertoz
