PROGRAMMATIC EATS THE WORLD OF ADVERTISING

PROGRAMMATIC EATS THE WORLD OF ADVERTISING

Discussion in 'General Internet Marketing' started by DorisRon, Nov 29, 2016.

  1. DorisRon

    DorisRon Member

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    In 2011, a well-known entrepreneur and investor Marc Andreessen wrote: "Software eats the world." Today, in 2016, it can be argued that the advertising world is eaten with the phenomenon of programmatic.

    About a year ago, "Forbes" has published an article entitled "What is programmable advertising and whether it has a future?". And today eMarketer experts are predicting that the volume of this segment of the advertising market in 2017 will amount to 32 billion dollars. Of course, such forecasts can be treated with some skepticism, but if you think that digital advertising is limited to only with such devices as phones, computers and televisions, just take a stroll through the streets of your city and count how many ordinary billboards were replaced with digital displays. And digital is known, to open the doors to all digital technologies. A striking example is programmable radio advertising. Since today the consumption of music is mainly digital - from the radio on the internet to such digital services as iTunes radio, Spotify and ClearChannel 's iHeartRadio - then audio / video advertising is bought and sold programmatically.

    Many people mistakenly confuse algorithmic buying, that is automated advertising transactions, with complete abandonment of direct sales. And only penetrating the essence of the question, you'll get a clue as to why programmatic eats the world of advertising.

    The essence of the automation process is fairly easy to understand. Automation improves efficiency, significantly reduces the cost and improves the results. Maintenance of orders and drawing of spreadsheets manually remains in the past.

    But there is another misconception that algorithmic buying allows advertisers pay less for ads. In fact is that the cost of advertising is growing every year, and the advertiser in the case of programmatic buying pays the same price, and sometimes even more, but he gets a guarantee that there will be return from the ads. In other words, the advertisement becomes more accurate and efficient - that's why advertisers are willing to pay more for it. At the same time it is much easier to calculate the poorly performing ads (the wrong targeting vector, the wrong context or lack of creativity) and stop them. And then turn to efficient ads and increase the return from them.

    If we consider programmatic in terms of economy and technology, the key shift is that the advertiser has the opportunity to decide when to show an advertisement to the user. In traditional sales world the context was just bought (for example, 10 million impressions on the home page of the site). And this were no guarantees of efficiency.

    Of course, advertisers vary with their preferences, desires, needs, budgets, and so on. But in the era of programmable advertising a publisher can simply send a report to the advertiser on each impression of the ad on the home page and let the customer to specify the combination of context and users, he needs. This causes the value of the product sold (in this case the impressions of the advertisement) increase exponentially. Suddenly, media buying process becomes more efficient than ever before, because the context in conjunction with the available audience is much better than just the context.

    The pace with which programmatic devours advertising industry is constantly accelerating, and many companies are trying to keep up with the times. Here are some examples: Twitter bought the ad exchange platform MoPub, media conglomerate AOL bought the company Adap.tv, Yahoo search engine after several difficult years begun to actively invest in Yahoo Ad Exchange, for the technology platform for algorithmic buying Xaxis recently merged with the Internet company 24/7 MEDIA.
     
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