According to a Business Insider study by 2018 programmatic advertising will account for 50% of digital ad sales.
Notwithstanding the rush to programmatic advertising by some marketers, many others are still scratching their heads. Either in confusion or fear. As the article states, ‘There are still a number of barriers to adoption. Top barriers include brand worries that they will lose control over where their ads will appear, internal resistance at ad agencies, and lack of transparency in the industry over methods and results’.
Programmatic really isn’t that difficult to understand though. Artificial intelligence (AI) and real-time bidding (RTB) take over the previously human role of deciding where ads get placed.
Programmatic aims to solve the issues that today’s plethora of media choices presents – precisely zeroing in on the right audience to harvest better-quality leads for brands and maximize marketing investment.
Say you wanted to target unmarried men in their 40s with high incomes who live in Perth, or women in Western Sydney between 18 and 35 who enjoy live concerts.
Given all the targeting combinations to choose from (including more than 3,000 postcodes in Australia) you could end up with an unwieldy number of choices. You’re in an area where an accurate understanding of the right combination of choices starts to get beyond human ability. It’s here that technology helps advertising become much more scientifically focussed.
With programmatic campaigns, once information about your campaign goals and KPIs are in, the campaign starts – first small, using predictive analysis then evolving and growing based on what’s working. The ultimate goal is for KPIs to be reached faster with fewer wasted dollars.
Big data can threaten to drown marketers. AI uses machine intelligence to target relevance and deliver results using algorithms that help analyze data and process choice. Programmatic strategies leverage AI to resolve the billions of potential targeting combinations to reach customers most likely to convert to sales.
Skepticism, fear, and distrust of technology have at times given programmatic a bad name. However, we’ll increasingly see its growth, not just in digital channels but also in traditional channels like radio and television as they open themselves up to receive marketing assets programmatically. This blending of technology and marketing or ‘martech’ as it is known is set to continue it’s rapid growth.
“Five years from now, all media will be bought programmatically,” according to Ashu Garg, general partner at Foundation Capital, a Silicon Valley venture capital firm with a track record of big-payoff martech investments, such as Responsys, Tealeaf, Freewheel and Localytics. “There’s no reason why the traditional model for buying and selling media should exist. It’s archaic and irrelevant.”