{"id":110605,"date":"2015-09-07T14:18:00","date_gmt":"2015-09-07T19:18:00","guid":{"rendered":"https:\/\/www.dacgroup.com\/what-is-programmatic-advertising-and-why-does-it-matter\/"},"modified":"2024-12-21T05:51:02","modified_gmt":"2024-12-21T10:51:02","slug":"what-is-programmatic-advertising-and-why-does-it-matter","status":"publish","type":"post","link":"https:\/\/www.dacgroup.com\/en-gb\/insights\/blog\/strategy\/what-is-programmatic-advertising-and-why-does-it-matter\/","title":{"rendered":"What is programmatic advertising, and why does it matter?"},"content":{"rendered":"

In the beginning, there was display advertising. Then came real-time bidding (RTB), and more recently we\u2019ve seen the arrival of programmatic. \u2018Programmatic\u2019 has been the buzz word of the online ad industry in recent years, but surprisingly, many still fail to agree on what it actually stands for. If seasoned industry experts have been unsuccessful in reaching consensus, it\u2019s no wonder that many brands and businesses (i.e. buyers) remain a little confused. \"Advertise So, let us attempt to explain \u2018programmatic\u2019 in layman\u2019s terms… \u2018Programmatic\u2019 advertising refers to the use of software to automate the purchasing of online advertising. Traditionally, digital ads were bought and sold by human ad buyers and salespeople,\u00a0via human negotiations and manual insertion orders. With programmatic advertising, man is replaced with technology! What\u2019s more, the process happens in real-time, meaning that when a user visits a website, the auction between advertisers happens instantly.<\/strong> Programmatic advertising has unquestionably transformed the face of digital ad buying, and in theory, it should make the buying of digital ads cheaper and more efficient. A recent study by the IAB<\/a>, which sought to estimate the size of the programmatic market, from both a buying and selling perspective, found that programmatic revenues totalled $10.1 billion in the US in 2014 comprising approximately 20% of total internet advertising revenues ($49.5 billion). Programmatic revenues made up approximately 52% of display related advertising ($19.6 billion) in 2014, while non-programmatic display related revenues comprised the remaining 48%. Programmatic penetration of digital display ads is forecast to hit 59% in the UK by 2017 and reach 56% and 60% in France and the Netherlands, respectively. The majority of programmatic inventory (70%) was bought and sold through Open Auctions last year, which is the Wild West of auctions and refers to unreserved inventory, available to any and all buyers, sold through auction pricing. It is however predicted that other platforms, such as private marketplaces, will build in prevalence. One thing is certain, however. The programmatic ecosystem is extremely complex, made up of several technology components from the buy side and sell side. It\u2019s no wonder that even the biggest brains in programmatic have sometimes found it a tricky space to navigate. Why does programmatic matter?<\/strong> Despite some differences of opinion, programmatic advertising is certainly here to stay. As businesses become increasingly comfortable with signing off programmatic marketing budgets, it\u2019s important they have an understanding of the full potential of the technology, and are mindful of where their attention should be. The ability to deliver the right ad to the right user at the right time…<\/em><\/strong> Programmatic has the potential to make it easier to reach target audiences, at exactly the right time.<\/p>\n

https:\/\/www.youtube.com\/watch?v=wyDSubnQd28<\/a><\/p>\n

During the World Cup last year, Nike used programmatic, real-time buying to deliver immersive 3D display ads<\/a>\n

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