The programmatic approach to online advertising

One of the challenging aspects of digital marketing is that the technology, platforms, and tools are changing and evolving so rapidly that it is hard to stay on top of the new trends and industry best practice on how to get the best results for your online advertising campaigns. In this article we are going to take a look at programmatic advertising and what this might mean for your business.

What is programmatic advertising?

Digital advertising used to be managed by selling specific online properties and the number of impressions that would be included within the package – pricing would be guided by the audience measurement tools that would help to determine the value of the online real estate being sold. Programmatic advertising began to emerge around 2010 and it’s effectively the automation of the premium level of digital advertising, using a direct sales platform and through an exchange type system.

The importance of measurement

One of the key factors in the success of programmatic advertising is getting your measurement right. You need dependable information that is timely enough and granular enough so that you can adjust your campaign while it is progressing. Your measurement also needs to address the key objectives of your campaign. In addition your measurement needs to be independent and unbiased.

How has online advertising been changed by programmatic?

At a basic level, what programmatic has replaced is the ad network style of operating model that bought and sold remnant inventory – the online real estate that hadn’t been purchased for a specific campaign. But what we are also seeing is the increasing adoption of programmatic advertising for premium online real estate. Yahoo, one of the major publishers of digital marketing campaigns, is estimating that over 90% of online advertising will soon be managed on a programmatic basis.

The size of the prize

The online advertising market is huge. According to recent studies by PwC (on behalf of the Internet Advertising Bureau), in 2013 advertisers spend over £1 billion on online advertising – an increase of 15% on 2012 figures. Online advertising generates £14 billion in annual sales – generating £14 for every £1 spent. Price comparison sites are an increasingly important feature of the retail market, with 4 in 10 UK consumers visit a price comparison site at least once per month. Of course the specifics of your marketing campaigns depend on the objectives that you have set for your business, and an analysis of the most effective ways to reach your target audience. But as we continue to see increasing penetration of smart phones and tables, and a blurring of functionality between laptops and mobile devices, it seems inevitable that online advertising will be featuring somewhere in your marketing campaigns and programmatic advertising will be the way that you manage the campaigns that you are running.

If you are thinking of launching a new online advertising campaign, or if you are in the process of reviewing your marketing strategies, you need to be asking how your digital advertising is being managed. The short-term future of online advertising appears to a programmatic approach to placement and management so make sure that your marketing plan reflects this.


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