Programmatic advertising

It is common for certain internet pages to prompt visitors to introduce a code or to answer a question, in order to prove that they are not a robot. This happens more and more today, due to the fact that, indeed, robots, that is computers, are increasingly used to perform certain menial jobs which humans used to do. They are specially programmed to work with high-volume data that would take too long and it would be too expensive and less reliable to process by a human. The advertising industry is no stranger to this technology and is bound to rely heavily on its advantages.

Programmatic advertising, also known as programmatic marketing or media, consists of automated buying, placement, and optimization of digital advertising according to certain business rules, where both supply and demand partners are in fact non-human. A recent study forecasts that the global programmatic spending will increase almost tenfold between 2011 and 2018 and that North America is presently the largest regional market in regards to spending on programmatic ads. Spending in the United States alone is expected to grow from 2.8 billion U.S. dollars in 2011 to 17.6 billion in 2018. There are, however, many concerns associated with automated operations, such as banner blindness, fraudulent traffic and ad collision.

Although this type of advertising is not entirely new and has its roots in the developing of Teletext in the 1980s, it has only gone global in recent years, due to the growing penetration rate of the internet. However, yet another trend is changing the market, namely the ubiquity of smartphones and increased use of mobile phones as means to access the internet. As a result, marketers are concentrating more and more on programmatic display ads specifically tailored for mobile devices and research shows that spending on ads for this device might increase ten times in only three years.

A study among marketers in Canada, the United States and United Kingdom shows that this trend is still new, as only 18 percent have been using programmatic marketing for more than 24 months while the majority have been doing so for a shorter amount of time. Depending on the size and profile of the company, different departments might be responsible for programmatic advertising, such as Media buying, Marketing or Digital Marketing. As of 2014, the leading types of ads bought programmatically by marketers, agencies and publishers in the United States are standard banners, mobile, pre-roll and high impact ads. The preferred channel for buying and selling of programmatic display advertising in the United States is the public ad exchange, a virtual open marketplace where advertisers and publishers trade digital display inventory, video and mobile ads.

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