Targeted, individualized and automatically booked and switched advertising on the Internet – this (and much more) is summarized under “Programmatic advertising”. Programmatic advertising is not a fantasy for the future, on the contrary: it has been a reality for years and is on the advance. And from today’s perspective, we can say that it is also the future of online advertising.
All in one
Let us look at advertising in the social media sector for a better understanding. If you want to stand out here (and this is only possible with target-group relevant advertising), you have to control your advertising messages 100% individualized and in real time. This is humanly impossible, but absolutely feasible when automated. Programmatic advertising takes over automatically.
• Analysis of the advertising environment
• The decision to place the advertisement
• Bidding on advertising space
• The choice of the advertising message
• The actual advertising placement
In this way, wastage is minimized and the available (financial) resources are used as efficiently as possible – the return on investment and the conversion rate rise and fuel this mechanism automatically. The buyer and seller are brought together, the price for the ad placement is determined via an auction, the highest bidder places his ad – all this happens automatically and within fractions of a second.
East markets with potential
The development of this business segment is dramatic. For comparison: in 2012, around 13 % of online advertising space was still filled programmatically, by 2017 it was already around 50 %. For the European market, this corresponds to an advertising volume of more than EUR 8 billion in placements. The trend is clearly upward. However, there is a general east-west divide: around EUR 7.5 billion was invested in Western Europe, only EUR 610 million in Eastern Europe. A look across the pond shows that Programmatic advertising in the USA is already well integrated, but the potential still exists.
KI as a driving force
Programmatic advertising will have to develop itself further in the future. From our immediate and personal environment, we know that advertising banners, videos and audio files do not always achieve the desired advertising effect (keyword: ad blocker). The advertising environment also plays an important role, it can influence the advertising message in many different directions both positively and negatively. Programmatic Advertising will, therefore, have to incorporate much more information about the advertising environment of the placement into its calculations – namely a certain “human element” that takes into account all possible reactions of the viewer in advance. This is where AI will come in and have a decisive influence on the further development of Programmatic advertising.
Sales figures as an indicator
Nevertheless, customers and agencies are not released from their responsibilities. They must continue to subject the basic data, the implementation and the results to a critical success control. As with any other type of campaign, the focus in Programmatic advertising is on the efficient use of existing resources. However, at the end of the analysis, there is always one irrefutable and all decisive factor: the actual sales figure.