Programmatic Advertising Explained: Why Everyone’s Doing It

Unless you haven’t been following digital marketing trends, you very likely have come across programmatic advertising which is growing by leaps and bounds. In 2021, programmatic advertising spend in the US was around $106 billion. By 2023, that number is expected to jump to almost $142 billion. Programmatic is one of the hottest topics for our existing and new clients and a strategy that we have been employing in client campaigns as the preferred digital advertising strategy.

So, what is programmatic advertising? And why is it growing so quickly?

Simply put, it’s the buying and selling of digital ad inventory through automated exchanges. But that definition doesn’t really do it justice. Programmatic advertising is changing how digital ads are bought and sold, making the process more efficient and effective for both buyers and sellers. Today, we’ll explore why everyone is jumping on the programmatic bandwagon, and take a closer look at what makes this type of advertising so powerful.

Programmatic advertising can be a complex topic, but we’ll try to make it easy to understand. Let’s start with a brief history of programmatic before diving into how it works and the benefits it provides.

The origins of programmatic go back to the early days of online advertising when ad buying was done manually, one campaign at a time. This process was slow and inefficient, and it quickly became clear that there had to be a better way. In 2009, the first programmatic ad exchange was launched, and things started to change.

With an ad exchange in place, buyers and sellers could trade ad inventory in real-time using automated processes. This made the entire system more efficient, and soon programmatic ad spending started to take off. By 2016, programmatic ad spending worldwide had reached $32 billion, and it has continued to grow rapidly since then.

Programmatic advertising is still a relatively new field, but it’s already having a major impact on the digital marketing landscape. Here are some of the key benefits that programmatic provides:

#1 Improved efficiency: Programmatic buying and selling eliminates many of the manual steps that were required in the past, making the process more efficient for both buyers and sellers. Plus, advertising can be purchased across multiple platforms at once – including native ads on Google and search engines, on various websites, on streaming channels, podcasts, OTT and more.

#2 Better targeting: Programmatic advertising allows you to target your ads more precisely than other methods, increasing your chances of reaching potential customers who are interested in what you have to offer.

Programmatic advertising allows you to target your ads by demographics, interests, and even location. You can also target ads based on past consumer behavior, making it one of the most targeted forms of advertising available today.

#3 Scalability: Programmatic advertising is scalable. You can buy as much or as little ad inventory as you need, and you can adjust your targeting parameters at any time.

Now that we’ve covered the basics, let’s take a look at three brands that are using programmatic advertising to great effect:

1. Nike: Nike has used programmatic advertising to target potential customers based on their location, demographics, and interests. For example, they’ve targeted ads to people who live near Nike stores, or who have expressed an interest in running or other sports.

By using programmatic advertising, Nike has been able to reach a large number of potential customers with their message.

“With programmatic, we can be very specific about the audience we want to reach and deliver our message in a way that is relevant to them,” said Scott Daley, Global Media Director at Nike. “It allows us to be very efficient with our media spend and reach the right people with the right message at the right time. Programmatic gives us the ability to really target our audience in a way that we couldn’t do before.”

2. Warby Parker: A smaller brand using programmatic advertising successfully is Warby Parker, a sunglasses company that sells prescription glasses and sunglasses.

They have used programmatic advertising to target people who live near Warby Parker stores, or who have searched for glasses or sunglasses online in the past. By using programmatic advertising, Warby Parker has been able to reach a large number of potential customers with their message.

“Programmatic has been great for us because it helps us target our ads more efficiently,” said Neil Blumenthal, Co-Founder and Co-CEO of Warby Parker. “It allows us to reach people who are interested in our products and who are likely to buy from us across multiple platforms.”

3. Bonobos: A men’s clothing company, Bonobos has used programmatic advertising to reach a large number of potential customers with their messages.

“Programmatic video is a great way for us to get our message out there to people who are interested in our products,” said Andy Dunn, Founder and CEO of Bonobos. “It allows us to target our ads more efficiently and reach a larger audience than we could through other methods.”

If you’re not already using programmatic advertising, now is the time to get started. It’s an incredibly effective way to reach your target audience and achieve your marketing goals. And with its rapid growth, it’s only going to become more important in the years to come.

If you’re ready to get started with programmatic advertising, we can help. We’ll work with you to develop a campaign that meets your needs and helps you achieve your goals. Contact us today to learn more!