Programmatic Advertising Explained

If you advertise your business online, you must have heard about programmatic advertising. It appeared back in 2013. In the past five years, the technique has become smoother and more attractive for an average business owner.

Some people say that programmatic advertising has changed the approach to ads. Others view it as another useful tool for the marketing campaign. We asked experts from programmatic advertising agency War Room to shed some light on the process.


What Is Programmatic Advertising?

Programmatic advertising involves buying online ads by using the software. Essentially, you don’t use a marketing team to purchase online ads. A program does it for you. The traditional approach to ad purchase involves proposal, discussions, quotes, tenders, and such. Meanwhile, digital advertising makes the process highly optimized by involving machines and algorithms.

The digital ad buying is not fully automatized though. For example, the manual process, which involves insertion orders and ad tagging has been taken off the marketer’s shoulders. Thus the team has more time to deal with add optimization, which is still a 100% human task.

Programmatic advertising makes the work of the marketing team easier. Even though some people view the approach as a step toward full de-humanization of the marketing process, it’s not exactly true.

People still need to create, improve, and optimize the ads. Thankfully, programmatic advertising gives them more free time to deal with important tasks while taking care of small yet time-consuming details.

Even though programmatic advertising has become “the new word” in the marketing world, it still has a few disadvantages. For example, scanning for extremist content is not yet perfected. Thus, a company’s ad may appear on a video or a website with inappropriate content without the advertising specialist knowing about it.


How Does It Work?

How does programmatic advertising work? AI technologies use algorithms that analyze a user’s behavior, allowing real-time changes to the advertising campaign to help increase the conversion rate. Programmatic platforms collect data about the audience and use it for an improved target advertising approach.

Numerous platforms are used to facilitate the process of purchasing the ad on the open market. For example, data management platforms collect the cookie data and then analyze it to help the marketers make better decisions about the target audience.  

The ad publishers use a supply-side platform to manage their available ad inventory. This platform tracks the visitors while collecting information about their browsing history. Later, the platform picks the winning bid and sends the winning advertisement to the publisher’s website.


Disadvantages Of Programmatic Advertising

Even though programmatic advertisement seems to solve many problems, it has a few disadvantages.

1. Advertising Fraud

Since a big amount of online traffic is fraudulent, the programmatic campaign is subject to advertisement fraud. As the AI is learning fraud patterns, the programmatic advertisement is becoming more secure.

2. Brand Safety

Many programmatic advertisers are already working with companies which ensure brand safety. However, without such a company supervising the process, the ads may start appearing on pages which are not safe for the brand.

3. Bot Traffic

Some traffic available through programmatic advertising opportunities is bot traffic, Taking advantage of such ad buying increases the risk of bot traffic since there is no direct relationship between the human parties.


Final Thoughts

Any new robotic solution has its pros and cons, especially when it’s just starting to be implemented. Programmatic advertising is not an exception. By weighing all the advantages and disadvantages of this option, you can make the right decision for your company. Since programmatic advertising is fairly new, you have to be ready for a few challenges.