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Why Programmatic Advertising is Important?

Advertising commercial monetization has always been an effective way for the Internet and technology companies to achieve profitability. Compared with traditional advertising, programmatic advertising owns one most valuable characteristic — efficiency. Before programmatic advertising, digital advertisements were dealt with over human resources, who may be expensive and unreliable. Programmatic advertising technology promises to deliver the advertisement purchasing system more efficient and credible, and therefore through removing manpower from the dealing process, programmatic advertising is cheaper. Furthermore, compared with human resources, machines require less rest time and provide higher working efficiency. Programmatic advertising contributed to US$45.72 billion to the digital advertising market in 2019, up from $17.5 billion in 2015, showing the industry has grown more than two times over the past five years. Conclusively, programmatic advertising takes an increasingly important role in the entire advertising market, and therefore it is significant to pay more attention to it.

What’s Innovative about Programmatic Advertising?

Compared with traditional advertising, the improvement of supply-side platforms (SSP) lead to the expansion of functionalities and advertising exchange mechanisms for sellers and buyers, which is one key trending innovation of programmatic advertising. Since this technology of programmatic advertising is an automated real-time bidding and acrosses various social media platforms simultaneously, it makes activities efficient and effective, streamlining the process and consolidating the digital advertising efforts in one technology platform. Moreover, with the emerging of newer technologies and advertising channels, such as 5G, VR/AR, smart devices, Digital Out Of Home (DOOH), etc., it will generate more innovative technology applications with programmatic advertising.

How Can Programmatic Advertising Help with Lead Generation, Customer Retention, and Sales?

One of the most important characteristics of programmatic advertising precise push advertisements, which can effectively lead generation, achieve customer retention, and therefore increase sales in the end. Since programmatic advertising automatically trades of online advertising based on big data, the data management platforms (DMP) are significant parts of programmatic advertising that assist ads publisher to reach the target market audiences. The DMP can collect and analyze market information and user data with segmenting from different channels, which appeals platform managers are easier to locate target market and audiences. Furthermore, with focused target marketing, programmatic advertising space is available to allow businesses and brands to be marketed directly to relevant markets. As we mentioned before, the development and optimation of SSP boost the fierce growth of programmatic advertising. It provides an effective channel for publishers and audiences to connect directly and offers the target market appeal and justified advertisement expenses for branding. Moreover, currently with the optimation of the Internet era and the rise of the mobile Internet, automating content becomes easier with the mobile applications that utilized data to determine which programmatic advertising will be the best opportunity. Timing for marketing campaigns and improved displays of content can be supportive of lead generation, customer retention, and sales growth with programmatic advertising.

Pluses and Minuses of Programmatic Advertising

There are multiple benefits of utilizing programmatic advertising for all digital advertising and marketing. Firstly, programmatic advertising benefits buyers and sellers make data-driven decisions and removes the guesswork from the advertisement purchasing process. Furthermore, using programmatic advertising benefits the budget. Programmatic advertising technology generates efficiencies by using machine learning to optimize campaign success, avoiding ineffective inventory. Therefore, it will be easier and more accurate to target audiences, get access to advertisement inventories, and achieve streamlined campaign management.

However, every coin has two sides. There are also some disadvantages of programmatic advertising. First of all, the initial phase of programmatic allowed marketers to cast a wide net of advertisements and immediately reap the benefits. However, programmatic has already become over-saturated, with brands continue to infiltrate the display spaces and bid for spots. Thus, the market has become gradually density, and it will be more difficult for marketers to publish successful campaigns. Increased bidding competition means that more brands are competing to display ads in their audiences and eventually win bids at a higher price, the overall market profit margin will be greatly reduced. Secondly, as people’s awareness of privacy protection increases, it will be more challenging to obtain users’ private information accurately. Therefore, if publishers cannot fully capture the behavior of target audiences, it is highly possible that programmatic advertising will fall flat with the wrong target audiences, and therefore the costs will soar while return on investment plummets.

Is Programmatic Advertising A Trend Or Fad?

I consider programmatic advertising will be around for a while. It is a typical marketing trend that is on a disruptive ride with the rise of new technologies. With the 5G promising, there is still a lot of market space that can be discovered based on programmatic. Programmatic advertising is by far the most influential segment of digital marketing and advertising technology. Combined with the whole advertising technology trends in the market, I consider that there are several main trends that will pave the path for new-age digital ad planning.

Firstly, due to the real-time data process functionality of AI and machine learning, it will be easier to predict outcomes and provides advertising suggestions in the future through analyzing customer behaviors, such as gender, geography, age, previous history, etc.

Secondly, with the DOOH gradually combined with mobile location data, marketers can integrate both DOOH data and mobile location data to drive conversions in the offline world in order to deliver both brands and performance marketing.

Thirdly, programmatic advertising increases transparency, which can effectively tackle ad frauds, and blockchain and Ads.txt can accelerate the achievement of this goal. Currently, blockchain in programmatic advertising technology, based on the principle of decentralization, has been able to tackle ad fraud by serving to cut down the number of unnecessary middlemen, removing domain spoofing, verifying the legitimacy of publishers, and allowing transactions using cryptocurrencies.

Recommend Programmatic Advertising to a client?

I will definitely recommend programmatic advertising to a client. If a client needs to do some digital marketing, it is necessary to collect audiences’ information. Compared with manpower to collect and filter information, using programmatic advertising to buy ads is time-saving with fewer errors. Moreover, the time it takes to purchase advertisements and reach out to audiences is faster. Publishers and advertisers simply set their requirements and everything else happens automatically immediately. Last but not least, the accuracy and the precision of targeted programmatic advertising lead to higher quality, and therefore it will eventually push the cost-per-click down and increase return on investment, which benefits to the budget.

In short, programmatic advertising can effectively assist clients to achieve preciser advertising and increase revenue.

Programmatic Advertising in a Post-COVID-19 world?

The COVID-19 provides an excellent programmatic environment because people have to stay home, and therefore more digital information and historical data will be generated during this period of time. I predict that the entire economic market is bound to have a retaliatory consumption in post-COVID-19. Therefore, if merchants or various advertising platforms can seize this opportunity, by collecting and combining online data during the quarantine and offline information in post-COVID-19, programmatic advertising will definitely achieve a more accurate push.