As digital marketing continues to innovate, the challenge for marketers is keeping abreast of technological advances in order to take advantage of the new opportunities available. It’s no secret that programmatic buying and real-time bidding have changed the face of the digital media market recently. According to IDC, spending on real-time bidding for display advertising will accelerate at a growth rate of 59% through to 2016, making it the fastest growing segment of digital advertising over the next few years. Additionally, an IAB study found that within two years 91% of advertisers and 83% of publishers expect to be using programmatic.

In my opinion, programmatic buying is the most exciting development in digital marketing industry so far this decade and it still has a long way to go. So what is programmatic buying and what can it do for you?

Defining programmatic buying can be a difficult task, however at Rocket Fuel we use the simple definition of ‘an act of bidding on advertising inventory in real time for the opportunity to show one specific ad to one consumer, in one specific context’.

With programmatic buying, advertisers buy impressions individually based on rich data that provides an accurate picture of the ideal audience.

Pick your targets

The reason why programmatic buying is now an essential part of a marketers toolbox is that it allows advertisers to buy impressions individually based on rich data that provides an accurate picture of the ideal audience – they only pay for who they want to reach, where they want to reach them.

While programmatic buying gives marketers control over who they wish to target, I would argue that it is having an even bigger impact on marketing by moving away from a campaign-by-campaign method towards a real-time optimisation approach. The level of data generated by consumers online is constantly growing and by monitoring this data in real time, it’s possible to gain immediate and accurate feedback on the effectiveness of ads, and instantly inform where and to whom the campaign should also be served. Furthermore, the analysis of this data is also able to provide insights on individuals’ awareness, favourability, consideration and even purchase intent.

As programmatic is an automated approach the system learns what’s working over a period of time and adapts its approach, meaning the campaign spend is fully optimised and focused on increasing results.

Programmatic buying allows marketers to pay for the customers they want to reach (or more importantly should be reaching), but not only that, it heralds a sea-change in the ultimate goals of advertising as it allows marketers to target one ad, for one consumer in one context – 1:1 marketing at its best.

The programmatic buying of display advertising will increasing becoming a must-have for every media plan as more and more advertisers gain an understanding of the benefits it can provide. What will be really interesting to see is where programmatic will go next. It’s already making ground in social, mobile and video advertising but TV and radio are also avenues being explored. Watch this space.

 

By Dominic Trigg, Managing Director Europe at Rocket Fuel. 

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