Programmatic media buying is now among the fastest-growing markets – and the sky is seemingly the limit. Today, two-thirds of digital display spending and 85% of all U.S. digital advertising is programmatic. In the U.S., this means nearly $80 billion in programmatic spending.
Programmatic advertising, or the process of buying advertising inventory using a real-time bidding auction rather than the person-to-person back and forth transactions in a standard market, boasts a fast and affordable alternative. Advertisers have the freedom to design campaigns on their own time and take them to market without the hindrances of the traditional media buying environment.
The primary differences between traditional media buying and programmatic media buying address both how the purchase process proceeds as well as how ads are placed. Instead of using a traditional agency model that relies heavily on a large network within the industry, programmatic media buying lets advertisers purchase media at the source. This streamlines the entire process, allowing advertisers to bring ad-buying in-house in a way that both reduces agency fees and saves time. Ad delivery can occur in a few different ways, including real-time bidding, private marketplaces, preferred deals, and guaranteed deals, yielding a flexible model with a lot to offer.
While not all advertisers have embraced programmatic media buying, industry growth patterns imply that this trend isn’t going away any time soon. In fact, all signs point to increases in the U.S. and beyond. These five benefits are at the cornerstone of the popularity of programmatic media buying.
Precise Audience Targeting
Advertising dollars make a difference, especially when it comes to calculating ROI: put ads in front of the wrong eyeballs and returns will fall flat. Programmatic media buying strategies seek to alleviate this, however, utilizing targeting methods that place ads onto websites based on things like:
- Purchase intent
- Household income
- Behaviors and interests
This allows advertisers to increase the likelihood of successful campaigns and ensures placement in a spot that counts.
The traditional media buying business relies on a lot of old school tactics, like purchasing through agencies via sales representatives. While certainly effective, this process can be convoluted and time-consuming – a real disadvantage when time to market matters.
Programmatic, however, is largely automated. There is no need for a media buyer to do research on which platform or website is best and make arrangements to place ads; instead, an algorithm does the heavy lifting. This makes placement faster and more accurate.
Greater Media Buying Transparency
Before the advent of programmatic, advertisers have had little information on which to rely. The placement process in traditional advertising can be somewhat of an agency secret, leaving advertisers in the dark about where their ads are going and why.
Programmatic advertising overcomes a lot of these hurdles due to the nature of placement techniques. Advertisers now know where their ads are landing as well as the kinds of customers viewing their ads. This kind of information can be invaluable, both in determining the efficacy of current campaigns as well as planning future ones.
Gathering the results of an advertising campaign has long been a slow process, and the accuracy of results yielded by media companies can sometimes be a question mark. However, this is no longer the case for advertisers who choose programmatic pathways.
Programmatic ads offer real-time information about performance, giving advertisers to-the-minute updates that can be used to inform decision-making. This access also enhances the array of information available via seamless integrations, giving advertisers more tools than ever to use when building out new ad campaigns.
Campaign Reporting and Optimization
Not all ad campaigns will be winners but in traditional advertising, it’s not always easy to parse out what works and what doesn’t. Campaign performance data is limited and potentially inaccurate and is largely available only after a campaign has ended.
The opportunity to analyze, adjust, and pivot are among the largest benefits of programmatic advertising. Campaign reporting is advanced and up to date, allowing advertisers to see what works and make quick fixes to adjust what doesn’t. The reporting and optimization process is largely automated, too, giving advertisers simple tools designed to push through tweaks on an expedited schedule.
Is Programmatic Media Buying Right for Your Brand?
While programmatic advertising isn’t right for all advertisers and all campaigns, it offers plenty of benefits for those willing to take the leap. From automated tools to robust reporting, the rise in programmatic offers compelling opportunities for advertisers prepared to pivot in a new direction. For those who want to get ahead and stay that way, programmatic should play a role in current ad campaigns as well as those in the future.