Programmatic advertising isn’t just some new buzzword in the marketing scene.
It’s actually a revolutionary concept that’s only going to get bigger and bigger as time goes on.
While those who like to micromanage their advertising campaigns might not think much of the idea, there’s a growing body of evidence which shows that it’s extremely effective for those who choose to utilize it.
Of course, if you’ve never heard of it then you might be wondering what all the hubbub is about so let’s dive right in.
What is Programmatic Advertising?
Programmatic advertising is something of a counter-intuitive name for the concept, but essentially it all boils down to letting an AI decide when and where your ads are displayed.
This means automatically buying space for your ads and, ideally, placing them exactly where they need to be to draw in converting viewers.
While I’d hesitate to call the traditional “trial-and-error” style of marketing primitive, it represents a big step up for a lot of people and it really can be quite effective if used properly.
Many of the big advertisers, including Google, now offer some variant of programmatic advertising which means that it’s also easy to incorporate as an adjunct to your normal channels.
The Paradigm Shift
If you’re the type who micromanages their campaigns, carefully spending time crunching on numbers and choosing each ad placement to find things optimal for your target market… then programmatic advertising may seem like something of a gimmick.
The ultimate reality is that it’s the way the market is moving right now and anyone smart is going to have to adapt.
There’s a real culprit here: Big Data.
Big Data, the industry which supports your favorite social media sites.
You should know by now that Facebook, Instagram, and other social media platforms take the information which is utilized on their platforms and sell it.
This has some serious implications for the future of advertising. Basically, once all of the information is linked together you have a fairly complete picture of consumers and the things that they buy and what they click on.
The implications of this amount of data being processed is pretty astounding if you sit down and think about it for long enough.
The problem is that Big Data is… well, it’s BIG. A team of individuals working full time couldn’t process all of it and draw the relevant conclusions within a reasonable amount of time, instead algorithms and AIs are relied upon to draw this information to a reasonable conclusion.
And that’s where programmatic advertising comes in.
It takes advantage of the virtually infinite amounts of data, draws conclusions, and works tirelessly to ensure that your ads end up in the right places 24/7.
There are some other good reasons to use programmatic advertising as well.
The coolest one, in my opinion, is the potential to uncover markets which you never thought about breaking into through the information being processed.
There might be a whole new world of potential customers out there for you to interact with, and they might just be outside of the circle you’re advertising to.
And the data may uncover them.
If that doesn’t represent a radical paradigm shift in the advertising world, I don’t know what does.
Types of Programmatic Advertising
Of course, programmatic advertising isn’t the be-all, end-all phrase that some people might think it is.
There are a few different types on the market.
Programmatic direct advertising means you spend the money and get direct ad buys automatically.
It’s pretty simple, and over half of all of the programmatic advertising currently being done is done through direct buying of the ads.
Real-time bidding(RTB) on the other hand, was actually the direct precursor of programmatic advertising as a whole. It involves auctions for ad space which take place in real time.
When you apply the programmatic formula to it you end up with an AI choosing where to bid.
The Bold Advantages
Here’s the thing: many marketing campaigns blow a substantial amount of their budget up front going through trial-and-error testing on their placement.
The idea behind programmatic advertising is to place, as some have put it “dog food ads in front of dog owners.”
Basically, not everyone is going to be interested in your product or service. Any ad impressions utilized by these people wastes part of your budget.
And that really isn’t great for your bottom line, since it lowers overall conversion rates and ROI at the end of the day.
The idea here is that you’ll eventually be able to plug in, pay up front, jot down some performance indicators, and let it go loose in the aether of the internet and not have to worry about haggling and hassle.
The reality isn’t quite there yet, but some of the programmatic advertising programs out there are getting quite a bit closer as time goes on.
The main advantage here is time saved for the marketer and less money being spent on reaching those who aren’t interested in your project.
The entire process relies on the availability of data, of course, which means that intuitive approaches which aren’t quite discovered yet might still deliver better initially.
The advantages of AI raise their head again here, however, since they’ll quickly be able to learn about those new markets and methods as well.
It can also easily be applied cross-platform, working on mobiles and accounting for the differences in how mobile users utilize their devices over traditional channels.
Another big advantage: roughly 30% of ad traffic is fraudulent clicks. That’s a lot of wasted money from a campaign.
And finally: how would you like to see automated split testing?
Split testing is a time consuming process for most marketers, and it requires you to both develop both advertisements and spend time crunching the numbers to determine which ad performs best where.
With AI backing, you can just release them “into the wild” as it were, and allow the machines to sort everything else out. In real time.
Machine learning can identify this kind of fraud and eliminate it as a cost to your budget over time.
Is it a Reality Yet?
Fully programmatic advertising, in the sense of a start-to-finish, unsupervised algorithm or AI which handles everything for you isn’t quite there yet.
Google AdWords, Facebook ads, and many other sources are getting pretty good at delivering things where they need to go but you’re still going to have to do some of the legwork yourself.
There are a ton of exciting new developments that are coming out each day, however, as Big Data and advertisers get together to find the best ways to reach consumers. The possibility will exist soon even for smaller businesses.
As artificial intelligence programs become more and more advanced and data becomes more and more focused the idea of fully automated advertising becomes something of a possibility.
There will, of course, always be a need for creatives for the end copy which is utilized to make the final sale. The amount of involvement required in driving the traffic which gets there in the first place may become smaller and smaller as the technology gets closer to being fully automated.
What Does This Mean For Me?
There are currently ad agencies out there which utilize programmatic advertising to a greater or lesser extent in order to deliver great results for their clients.
In most cases, this is proprietary technology and it can get rather expensive. However, the advantages of a self-learning algorithm can be pretty impressive for your ROI.
Whether you opt to go with this technology or not will really depend on your budget and who you choose to work with.
It’s not perfect, by any means, but it is a huge improvement over for the average person.
Many large companies are already investing heavily in programmatic advertising. Some have even converted almost entirely to it.
It remains poised to be a revolutionary change in the world of advertising, but as always you’ll need to do what’s best for your business at this particular time.
While some predictions put things at or near 100% by 2020 the future is anyone’s ball game and remains to be seen.
It’s definitely something to heavily consider, however, if you’re looking to maximize the return-on-investment you receive on each dollar spent.
It really is a complex subject, and it’s impossible to gain everything you need to know from just an article or two. Do your research if it sounds interesting and you’ll be on the right track to making an informed decision.
Programmatic advertising stands poised to take the marketing world by storm. It’s available now, although the metaphors used are likely to be over-the-top and it still requires a decent amount of work by even the advertisers who claim it’s entirely automated. Investing in a service which performs it, however, may be just the thing for those who can truly use the time and ROI advantage.