In the recent years programmatic advertising has quickly gained a substantial amount of popularity, especially among digital advertisers.
It’s estimated that they will be dedicating even more of their budgets to programmatic video inventory in 2019. It is estimated by eMarketer that programmatic video ad spend will reach $29.24 billion, which would account for almost 50% of all programmatic display advertising spending this year.
Why exactly is this strategy gaining so much popularity and why do digital advertisers believe it is valuable enough to be spending almost half of their budget on it? Are there possible downfalls?
What is Programmatic Video Advertising?
Programmatic video advertising is essentially the use of bots to buy ad space according to set prerequisites. The advertiser enters a detailed description of their ideal audience, their budget, and their ads into the program. The program then takes user data and uses real-time bidding to display the ad to a user that fits the ideal client profile, the advertisement with the highest bid is given the spot. This process is completed before the page loads. Ideally, the ads are only being shown to people that would actually be interested in what’s being offered, to hopefully get the most out of the ad spend.
The internet averages billions of users at any given time, with the possibility to reach millions, depending on the targeted parameters. Programmatic enables advertisements to reach a variety of different channels across platforms that companies would not otherwise have the ability. The program has an extensive web of established connections that allow these companies to reach new users across all platforms. Not only does the message have the potential to reach a larger amount of people, it also reaches specific people, those identified as the ideal audience.
More Specific Targeting Capabilities
Programmatic technology uses behavioral analysis to pinpoint the audience that the ads are best tailored for. The program is capable of IP targeting, geolocation targeting, contextual keyword targeting, and retargeting. This means advertisers and marketers can continue to reach those ideal customers that have yet to make a conversion to the website.
Uses Real-Time Data
As soon as a campaign is released, every detail is immediately trackable. You don’t have to wait until the end to measure the results. As soon as an ad is displayed the impressions, who it was seen by, where they were located, ect. can be instantly analyzed. This also allows to make changes whenever necessary, ensuring you’re not spending ad dollar in the wrong places.
With the ultra simplified process of being able to buy and sell ads, anyone is essentially capable. The most common instances of fraud in programmatic advertising are non-viewable ads, as well as bot traffic. The problem of non-viewables is that the ads are reported as placed and displayed, but they were actually buried, never reaching the user. And while bots can make things very efficient, they can also be used to fool the system. The artificial traffic is used to drive up the prices, resulting in higher ad spend.
Ad Misdirects or Misplacement
Publishers can sometimes forward ads to affiliated entities, getting displayed there instead of their intended placements. This could mean that the ad never actually reach its targeted audience. Depending on the ad, this could be harmful to brand image. For instance, if an adult-intended ad ended up being displayed on a children’s site. While stronger preventative measures are being created, issues can still frequently occur.
It gets Costly
As the precision of pinpointing the perfect customer increases, so does the price. Depending on how specific your audience is, it may be more beneficial in the long run to purchase the more expensive program. You don’t want to be wasting money on an audience that would never even consider what you’re offering.
There’s no doubt that programmatic advertising is extremely efficient, but just as every other advertising platform there are a variety of downsides that come along with the advantages. As with anything, you just need to decide if those benefits outweigh the risks.
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