Programmatic advertising is more than just automated ad buying processes -- it's also one of the hottest trends going today. This more efficient, granular method for positioning ads in front of the most relevant target audience possible has already proven its value online, and it could revolutionize the way advertisers use TV as well. Let's take a moment to examine why this strategy has taken the advertising world by storm across multiple media.
What It Is, and Why It Matters
Just what is programmatic advertising anyway, and how does it represent a marked improvement over previous forms of ad buying and selling? In its most general definition, programmatic advertising is the automation of the ad buying process. Software programs operating at lighting speed do jobs such as the placement of insertion orders, ad tagging, and other tedious tasks that used to require old-fashioned manual intervention.
The potential efficiency boost is obvious, since computers never need to sleep, call in sick, go on vacation or suddenly resign/retire like human advertising agents do. Real-time bidding (RTB) is a shining example of how programmatic advertising can facilitate the near-instantaneous purchase of ads via online auctions. Other programmatic systems allow ads to be bought or sold at fixed rates.
But that's only part of programmatic advertising's appeal. The software's ability to tap into big data on the public's browsing, buying and interest patterns allows buyer-side programs to automatically select the ad spots most likely to attract an exactingly precise sliver of the buyer's target market. This gives advertisers the ability to make the smartest possible advertising choices, 24 hours a day.
A Possible Revolution in TV Advertising
The ultra-fine audience targeting made possible by programmatic advertising represents an enormous step forward for the world of TV advertising. Traditional TV advertising has always been a notoriously speculative task -- a kind of "black magic" based largely on demographics reported through ratings and other less-than-bulletproof methods. This "silo" was typically isolated from a brand's other marketing efforts. Today, however, more and more people are getting their TV fix through streaming video delivered to desktop computers, laptops, tablets and smartphones.
As TV converges with online communication, the wealth of data that pours in about viewers' habits will give advertisers a remarkably clear holistic picture of where and how their customers are tuned in, enabling them to make strategic ad placements in streaming, pay-per-view and streaming video presentations. From there, it's a natural evolution toward using programmatic advertising to advertise on national and local channels as well. It's already believed that 4 percent of all TV advertising budgets in 2015 will be devoted programmatic ads -- and by 2019, that number could top 17 percent, spurred by major events such as the Presidential election that create new demand for interactive television options.
The New Normal for Online Marketing
While programmatic TV advertising is still in its formative stages, the programmatic approach has taken the rest of the marketing world firmly in hand. IAB research indicates that 85 percent of ad buyers have used RTB to purchase their digital spots, and that on the seller side, 72 percent of publishers can accommodate programmatic ad methods. Those numbers are expected to keep going up over the next couple of years. Of these, more than half of the advertisers are using programmatic for its ability to zero in on audience segments more precisely, while almost half of the total mainly use programmatic advertising for the sheer efficiency an automated platform can provide.
In short, programmatic advertising is here to stay as a force in the digital media world -- and as technology evolves to make TV and digital media one big happy family, we'll see programmatic become the new normal for TV advertising as well. Keep an eye on this revolution in advertising tech, and you just might find your own brand profiting from it as well!