Thanks to online media, the number of publishers has skyrocketed into the millions, giving marketers more digital advertising options than ever before. Though a complex space to navigate, marketers have welcomed programmatic because it brings unparalleled efficiency and can be incredibly effective in driving sales.
Most of us in the industry know well that programmatic advertising allows marketers to clearly define budgets, set goals, and apply attribution models for campaigns while the technology does all the work. Algorithms do the heavy lifting, analyzing variables in real time to determine the right campaign settings. If you ask online marketing professionals, they’ll say programmatic works, which is why it has maintained its dominance in the ad space.
Don’t just take it from me, though. Programmatic buying is so attractive that it’s on track to make up 59% of total U.S. digital display advertising spending this year, or $15.43 billion--up over $5 billion from last year. As more and more publishers and advertisers shift to programmatic, it is undoubtedly the future of online advertising.
So what exactly are the factors driving programmatic’s growth?
1. Buyers and marketers are in control: Since programmatic is automated, marketers and publishers alike can change settings at the click of a button, spending less time on the ad buying process and offering users control over how and where consumers are exposed to marketing messages. Unlike traditional ad buying, buyers are empowered to evaluate geographies, times of day, and publishers that are best, making it possible to target consumers shopping for the exact products they are in the market for and optimize relevant ads at the impression level. When buyers and marketers can navigate their online advertising investments and precisely engage consumers, they’re much more likely to continue to spend.
2. New advertising routes and formats: At its inception, programmatic was only available via open marketplaces and real-time bidding for display ads. Now programmatic also includes direct publisher relationships and partnerships with walled gardens such as Facebook. And no longer is programmatic only available for display ads; it’s being applied to a vast array of ad formats, such as video, TV, native ads, and other rich media across all devices and through open or private marketplaces. New avenues to place ads and new formats are helping fuel programmatic’s adoption and growth.
3. Social networks keep bearing fruit: Facebook has 1.49 billion users, Twitter and Instagram have 300 million users each, and newcomer Snapchat has about 200 million. Advertisers know that the vast majority of users connect to brands through social networks, so it’s no surprise that programmatic has access to these walled gardens. Marketers are well positioned to take advantage of the hyper-segmentation and targeting capabilities, first-party data integration, and dashboards that can point to ROI of social campaigns. Facebook, Instagram, and Snapchat may be some of the largest social media networks, but many have yet to be tapped from a digital advertising perspective. The newest form of social that has yet to be leveraged for programmatic are messengers. Expected to gain 1.1 billion new users by 2018, messenger sites present a big opportunity to connect with users.
4. Mastering the mobile consumer: For a long time, bringing programmatic to mobile seemed like fantasy. But by turning to client log in and geo-location over the last several years, marketers have cracked mobile programmatic and are quickly capitalizing on it. Even though mobile may seem like old news, it’s not. It’s only this year that consumers have started to spend more time on mobile than on desktop. The modern consumer buying journey spans desktops, laptops, tablets, smartphones, and even smartwatches. The opportunity for marketers that engage with consumers in the moment and across all of these mediums, as well as in-app and mobile Web, can be huge. Not to mention, when it comes to the cross-device attribution marketers want, mobile programmatic is a step forward.
5. More innovations on the horizon: Programmatic has made major waves since coming into the ad scene almost a decade ago, and it's continuing to do so. Innovations in deep linking on mobile, the integration of offline attribution, and direct publisher relationships to make the ad buying process seamless are extending the value programmatic brings to marketers and companies overall. As the technology behind programmatic continues to advance, new strategies will emerge, and marketers’ approach to buying will become increasingly sophisticated. One thing is for certain: With the ability to decide exactly who is going to see an ad, as well as where and when, fewer marketers are going to be able to resist the tangible benefits and ROI of programmatic.
See what the Twitterverse is saying about programmatic advertising: