Understanding Programmatic Advertising

Definition of Programmatic Advertising 

The use of Artificial Intelligence and machine learning to buy advertising in real-time, instead of going through human negotiations and pre-set prices. In the early days, the number of publishers grew quicker than the number of advertisers – meaning there were more websites available than people willing to advertise on them. This left publishers with an oversupply of ad space, and large quantities of unsold inventory. 


As a solution to this, ad networks were created. They were platforms that pooled unsold ad space from several publishers and made it available to advertisers at a discounted rate. The problem with this approach was targeting. 

If you chose to advertise on a large publisher’s website there was no way of knowing who saw your ads. Products aimed at an audience of, say, people over the age of 50 could just as well be shown to 25 year-olds. This brought on the birth of Real-Time Bidding (RTB) – the first real instance of programmatic advertising.


Programmatic Targeting 

The problem with this approach was targeting. There are a number of ways you can choose to target your ads with programmatic advertising, to achieve better accuracy and results. These are the most common strategies that advertisers use to target where their ads appear: 

o Contextual Targeting 

o Keyword Targeting 

o Data Targeting (Audience targeting) i.e. cookies 

o Geo-Targeting 

o Retargeting


Programmatic Continues to Grow 

Digital ad dollars as a percentage of ad spend are projected to more than double in a ten-year period. 

According to emarketer, Programmatic is going to account for 86.5% of all digital ad spend in the US in 2021. The primary growth in ad spend will be in  video, social media, mobile, and DOOH ads.


Programmatic Ad Spending


Top Trends in the Programmatic AD 

AI in Programmatic Advertising: 

Programmatic advertising statistics show that in 2020 one of the top trends is automation–– AI and machine learning. It is expected that by 2021 digital ad spend will increase by 88% in the US. 

o Dynamic, data-driven, automated creative 

By maximizing contextual relevance, such as time of day, weather, traffic,  brands can manage contents to maximize media value. 

o Predictive Analytics & Audience Targeting: 

One of the primary benefits of AI in DOOH is unlocking of predictive analytics to allow agency and media to make better decisions 

o The use of Artificial Intelligence in programmatic advertising will continue to rise. This is because it provides the marketers with a deluge of data that enables them to target the right people at the right time, through the right channel, on the right device, and with the right message.


Digital Out of Home (DOOH) Combined with Mobile Location Data 

o Combined with mobile location data, DOOH is capable of redefining how advertisers/marketers can deal with the vital last mile between the store and home, or online and offline. A direct impact is guaranteed on the scale and speed of conversions while connecting advertising and buying. 

o Marketers that use DOOH for their programmatic advertising can combine location data with their ads. This allows them to write content that can be tailor-made. This content’s reach can be immense, as brands can display their DOOH ads in locations like train or bus stations or shopping malls. 

o Programmatic DOOH is a medium that is good-for-all. It will provide both experimental and performance marketing as it gets more accurate with first- and third-party information from companies. 


5G Network will Enhance all Forms of Programmatic Advertising. 

By 2030, the use of 5G tech is estimated to expand to 1.4 billion users. This means that programmatic advertising will have an ample audience to run sharper and more interactive ads without lags across mediums. 

The high bandwidth speed of 5G enhances THE ADTECH ecosystem, allowing websites and videos to process faster, enabling precision of ad placement and delivery through the right mediums with perfect timing and with lightning speed. 


Omnichannel or Integrated Programmatic Advertising is the Way to Go 

o 49% of agencies are using their ad technology for programmatic media buys. 

o According to New research by IPONWEB and ExchangeWire, 49% of the entire advertising fraternity is carrying out programmatic media buying with their technology. This is enabling the agencies to gain better performance across various vital media measurements and buying criteria. The research originates from a survey of 129 programmatic professionals. The research concluded that 58% of agencies in EMEA depend on their technology, while 56% used US agencies 


Personalization will Remain Paramount 

o Programmatic customization is increasing. This allows marketers to offer highly personalized and relevant messaging to a target group. In conjunction with AI predictive modeling, the programmatic ad technology can serve more specific messages at the right time and place.


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