What Is Programmatic Advertising?

Many of the ads that you see on your computer, tablet or phone are targeted specifically to you. Here’s a brief outline of how programmatic advertising works.

Certain websites have default locations on their pages for the purpose of displaying digital ads. But the ads that are placed in those locations are changing in real-time so they are customized and relevant to the viewer.

Not all websites participate in this dynamic ad environment. Some websites may have fixed ads that are shown to every viewer, but that is becoming less common over time.

In other words, in many cases, you could be sitting next to a friend and viewing the same web page at the same time on your individual phones. But if you were to each look at the other person’s phone, you may see that you are each being presented different ads on the same web pages, depending upon a number of anonymized targeting data points, such as age range, gender, interests and geographical location.

In many cases, the targeting data can be reasonably accurate when it’s supplied by the users directly to the ad platforms, such as Google, Facebook, LinkedIn and Amazon. Although some users may provide incorrect info when they sign up for such services, much of the info is generally correct.

However, other adtech companies may not have users who voluntarily provide their gender, age, address, etc., which means much of their targeting parameters are inferred or derived. The result is that this targeting data isn’t as accurate as can be expected on the major platforms.

Circling back to the purpose of this article and the video above, programmatic advertising represents the automated processes and networks behind the scenes that connect buyers and sellers of advertising spaces and which also present ads on web pages in the instant before they load on your device.

Even though it’s imperfect, programmatic advertising is an extremely fast bidding system for ad placements, which benefits ad space buyers and ad space sellers, particularly at scale.