While there’s no concrete research, it is estimated that the average person can see up to 10,000 adverts per day – almost double the amount we would have seen back in 2007. The most obvious explanation for such an existential rise in advertising can be attributed to the boom in online advertisement.
In 2021, Google Ads alone made a revenue of more than $209bn and Facebook made $32bn. In such a saturated market, it can feel impossible for brands to get their voices heard and make their advertising campaigns stand out from the crowd. This is where programmatic truly comes into its own and proves itself as an invaluable asset to businesses around the world. But what exactly is programmatic and how does it work?
What Is Programmatic?
As the name suggests, programmatic is the perfect blend between programs and automations, mostly used within the digital marketing sphere. It cuts out the timely human element of ad buying, instead using sophisticated software to signal to the user where their ads are going to be most effective.
This is done through a variety of different tools but most often relies on algorithms that have learned information from similar looking campaigns. Simply plug in your key performance indications (KPIs) and the audience you want to reach, and the programmatic platforms will take care of the hard bit: consistently ensuring that your ad spend is used effectively and efficiently to maximise your campaign’s success.
The popularity of this method of ad buying can be best demonstrated in the sector’s phenomenal growth, which has more than doubled to $493bn in the past five years. By 2026, it is estimated that the global market for programmatic advertising spend will reach £724bn!
But Where Does The Software Get Its Data From?
Of course, data sets about audiences aren’t simply plucked out of thin air. Within programmatic, the data is gleaned from either first, second or third-party data. In a nutshell, each group of data can be described as follows:
- First-party data:
Data collected and owned by you from your own audiences. This kind of data is the most powerful but, depending on your database, may not be the widest data set.
- Second-party data:
Data that comes from a partner’s first-party data, is accessed through mutual agreement.
- Third-party data:
Data that is purchased from an outside source – usually one that is anonymous. This data is the lowest quality but may have the farthest reach regarding the number of data sets available
Is It All Plain Sailing?
Of course, while programmatic will allow its user to make brilliant data-driven decisions as well as save time on lengthy manual tasks within the media buying process, there will always be hurdles to be wary of.
For example, it would be extremely bad practice to allow machines and technologies to take the reins without human supervision. Just because the algorithm might find the most cost-effective place for your advert to sit, doesn’t necessarily mean it should sit there. Unfortunately, there have been numerous case studies of programmatic ads sitting in inappropriately juxtaposing positions that have landed brands in incredibly hot water.
Programmatic is undoubtedly leading the way when it comes to media ad buying, and many marketing teams rely heavily on the insights it gives, to make the most of their advertising campaigns in this technologically driven world.
While there are countless examples of where programmatic has been worth its weight in gold by delivering amazing return on investment (ROI), there has also been too many cases where it hasn’t quite hit the mark.
Whether it’s through misplacement of ads or programmatic fraud, as with anything in the world of Data & Analytics, human skill and knowledge cannot be replaced by machine without consequence.
Learn more about the roles available in programmatic by contacting our team here.