Programmatic, you may have heard of it but do you know what it is? Are you looking for a job within digital media sales; more specifically, with a programmatic agency but do not have a clear understanding of what it is or what it means? Then hopefully this blog post will help.
What is Programmatic?
Simply put, programmatic is the process of buying and selling media in an automated fashion. Whilst not a new trend in the world of advertising, 2015 was the year it took off, offering marketers a whole new way of reaching their audiences more effectively online.
What does programmatic advertising matter?
The main reason is efficiency. Before programmatic buying, digital ads were bought and sold by real people instead of the machines that are used now. This was not only expensive but it also led to human error. This technology promises to make ad buying more efficient and therefore cheaper.
So is programmatic the same as real-time bidding?
No. Real-time bidding (RTB) is a type of programmatic buying but it is not the only one. RTB is what it says on the tin in that ads can be bought in real-time through auctions however programmatic software allows adverts to be purchased in advanced.
Would you say programmatic is the future of ad buying?
From reading various reports such as those on the Internet Advertising Bureau (IAB) UK and Emarketer, we would say it's highly likely.
Emarketer predicts that programmatic spend in the UK in 2016 will account for more than 50% of the total display advertising spend with it having 80-90% of the display advertising market by 2019.
Reports by the IAB have also shown that spend on digital advertising has increased year on year. According to a research deck by the IAB, UK digital ad spend grew 16.4% in 2015 to over £8.6bn. As ownership of internet devices increases with the average home now owning 8.3 internet devices, advertisers spent a record £8.61bn on UK digital advertising in 2015.
The report also states that the majority of display advertising is now programmatic with display ad spend rising 24.5% year on year to reach a 35% share of digital ad spend. Ads bought directly at fixed prices from media owners using manual processes now represent just 37% of display ads.
The growth of programmatic mobile advertising has been particularly notable with eMarketer predicting that around 75% of all mobile inventory is to be bought programmatically in 2016.
Does programmatic buying mean ads are losing their creativity?
This may have been the case a few years ago but it is not the case anymore. Advertising has reached a fantastic stage in which it is targeted to the audience it is intended and programmatic is one of the catalysts for this. Traditionally there has been a 'you buy the media and we'll do the creative' approach between creative agencies and clients meaning that media is often bought before the agency has even seen the creative. However, in the past 18 months or so this has been flipped on its head with the creative being finalised before buying the media. In order for programmatic to work successfully, the client needs to tell the agencies who their audience is, what they're trying to achieve and the objectives they have in place. Only once all this has been clarified should the programmatic media buying process start.
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