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As you live in the global world of digital processes, you might have already heard about such a notion as ‘Programmatic Advertising’. Let’s see what this is in more detail.
Definition of Programmatic Advertising
Programmatic Advertising is the way to show your ads to more relevant public, with fewer efforts, and less money spent on each individual impression. Today, there are many platforms that offer their services in Programmatic Advertising.
In other articles, we will also consider the ways of choosing the right platform for you but in this one, let’s discuss how these platforms actually help advertisers do their job more efficiently.
You already know that every Internet user is captured their data when doing some online activity:
- Preferences (topics of interest they seek information about)
- Time of the day they visit the Internet
- Device and patterns of browsing
- Preferred sites
- Their reaction to ads
- Demographical factors (age, social group, income, the constitution of the family)
- Personal data (that is most frequently collected by social media) and other things.
All this data matters when you want to select the right people to see your ad.
In bygone days with no powerful system of applying these criteria online and with no AI behind it, showing the right ads to the relevant audience was hard or nearly impossible.
Today, with powerful AI supporting almost every viable process in which data comes into play, it is possible to stalk users online offering them relevant ads.
Not just ‘generally’ relevant but relevant in this same minute for them, when they open some site or searching for some information, based on all previously collected data mentioned above.
Programmatic Advertising: how it works
Let’s say you are an owner of a sandwich eatery in the heart of Brooklyn.
Someday, you want to attract more visitors or let more people be aware about your tasty juicy cheese-and-fries-and-tomatoes sandwiches, which are really a masterpiece.
So you come to a Programmatic Advertising platform and say that you want:
- People working in the office or living in the radius of 1.2 miles from you (or, for instance, no more than 5 blocks) or searching for a snack in your area while living/working elsewhere
- With all incomes
- With all types of devices
- Searching for a place to have a snack during the day, especially on their dinner time
- Interested in sandwiches or non-restaurant eatery at all.
Then you indicate how much you are willing to pay for 1 impression, or your budget for a number of impressions or period of time, or how wide audience you want to cover, no matter how much will 1 impression cost.
After all the parameters are tuned, the platform with Programmatic Advertising software starts working for you.
When a person that corresponds to your criteria is found, and he opens the site (any site that is put into the database of the platform).
A short-lived auction is held online bidding for the right to show a specific advert to this particular user from all the advertisers that are hunting for his attention right now.
If your advert wins the bidding procedure (which lasts milliseconds during which a user opens the Internet page), your ad is shown to them.
If he clicks your ad – he is redirected to your site and you pay money for a visit to the Programmatic Advertising platform.
Easy, fast, cheap, effective, with no bureaucracy underneath. No wonder we now see their booming growth.
Programmatic Advertising: effectiveness
Since the birth of programmatic platforms principle at the beginning of the 2010s, they have been growing ever since in 1.5-2 times each year.
By the end of 2019, according to forecasts and latest data, the percent of all ads on the Internet that are managed programmatically, will be more than 80% and some tell that even up to 90%, reaching over 40 billion dollars in volume.
It’s hard to tell for 2020-2021 now but it feels like the share will grow up to 95%-97%. Thus, we see that Artificial Intelligence has once again proven it is more effective than humans are.