Programmatic advertising is the automated process of selling and purchasing paid inventory online.
Programmatic advertising allows digital marketers to purchase advertising space using automated technology and machine learning, typically through a demand-side platform (DSP).
Brands can use various programmatic advertising platforms to sell ad inventory to advertisers on publishing sites. To buy the stock and set their ads, advertisers place bids.
- An automated bidding process begins displaying ads to visitors who have arrived on a website that uses programmatic ads. The publishing site develops the ad space for the viewer on the supply-side platform.
- It serves as an indicator for demand-side media to place bids on the product, representing the website and the user's attributes. DSPs assess the data and assign a distinct value to the advertisement placement based on the site's and user's characteristics.
- Supply-side platforms (SSPs) determine which advertisers can place ads on the publishing site, while DSPs solicit bids for ad placement. Programmatic advertising is also known as real-time bidding because the process takes only a few milliseconds.
Marketing teams can avoid wasting ad spend by targeting specific audiences. Programmatic also simplifies making effective and economical use of the budget by offering many targeting choices and the capacity to merge them into a single campaign.
Based on a Statista study on Programmatic Advertising Spending, the United States spent USD 167 billion on programmatic advertising in 2021. By 2026, programmatic ads will account for 86% of all digital ad revenue.