The benefits of programmatic today and tomorrow

Despite setbacks, programmatic is still an amazingly effective way to promote your message.

Imagine you are an advertiser for a real estate company, who would like to increase the sale of a product or promote your brand. If you wanted to target sports enthusiasts, aged 20 to 35, who live in the Downtown Toronto area, make an annual income of approximately $120,000 and are in the market for a new condo this year, then your best bet would be to use programmatic.

Programmatic is a form of trading or market place bidding process that takes place online. This process allows for the buying and selling of website inventory in real time. In the real estate company’s example, the sellers are the publishers of the various website inventory, the final buyers are digital agencies who are searching for specific users on behalf of their clients.

There are as always middlemen within the buying and selling process who streamline the facilitation of these exchanges. They are fittingly called ad exchanges. They are the Walmarts or Costcos of programmatic. They buy the inventory in bulk and resell it at a lower cost and also provide the inventory in certain packages which makes the decision making process easier for the final buyer.

Programmatic works because it offers a way to reach a wide range of web users in many places in a short period of time. It allows for precision of targeting and easy monetization of your advertising efforts which allows the client to efficiently track their ROI. It allows the agency in charge of the ads to build accurate reports and pull eye-opening insights about a brand, their consumers and competitors.

What makes programmatic most valuable is how widely accepted online usage is all over the world. You can target a user in China who is using their smartphone to surf the web, with a product made in Toronto and track the viewing of the ad (an impression), the opening of the ad (a click) and the purchase of the product (a conversion).

Let us imagine in the not-so-distant future a film production company that has an exciting action film which is set to be released. If streaming or cable television providers are able to programmatically access the data, it will be extremely beneficial for the agency that manages the release of the new movie. If Ben watches Disney or Pixar films regularly, we can infer that he has at least one child at home, this information would be important for Disney World or Disney Cruises as it would help them send Ben targeted ads for a new event, attraction or toy.

The growth in vehicular technology also opens up certain possibilities in advertising that were not possible before.  Autonomous cars combine a variety of technology. They include radar, laser light, GPS, odometry (the use of data from motion sensors to estimate change in position over time) and computer vision. An advanced control system then interprets all the data the car receives. If this data were to be available programmatically, marketers could target the occupants in transit and send relevant messages that could show up on a screen inside the car since the driver doesn’t need to focus entirely on the road.

It has been proven that consumers prefer personalized ad experiences. In fact, 81% of consumers want brands to get to know them and understand when to approach them and when not to (Accenture, 2017). However, the importance of conserving people’s privacy and data must not be overlooked. As we enter a hyperconnected world, staying transparent and open is vital to a brand’s health.

With data breaches occurring a few times a year, users are losing confidence in the online world. Roughly half of Americans do not trust the federal government or social media sites to protect their data (Pew Research, 2016). Simply put, many struggle to understand the scope of the data collected about them and as a result, VPNs (Virtual Private Networks) are downloaded to feel more secure and browse the net at their leisure. In 2016, the entire VPN market (business, consumer, cloud and SSL) generated more than $15 billion in revenue and according to MarketWatch, the VPN market will be worth US $41.702 billion by 2023 at 18% CAGR. Programmatic being extremely useful to marketers and advertisers must also be aware of the privacy concerns of the public and their needs.

In our latest Data Story on Personalization vs Privacy, we take a look at the latest data on the privacy paradox, a term coined to explain our desire for personalized content and natural instinct to protect our personal information.

View the Data Story