Programmatic display involves
“Using real-time technology to deliver the most relevant messages for advertisers to maximise awarenees and response from targeted consumers who are served display ads”.
With the advent of ad marketplaces, advertisers can leverage programmatic buying to:
- Bid on and procure digital media without having to pre-negotiate a price
- Sign up for a minimum number of impressions or a minimum budget
- Generate an insertion order.
- Buy digital media across publishers, (e.g. a 300×250 IAB standard ad unit on Yahoo! or a 15-second pre-roll video on YouTube), on demand and to the extent that they require to satisfy a specific campaign objective.
How does this process work?
When a consumer loads a web page with an available space (invenntory) for an ad impression, the publisher of the page puts up the ad impression for auction in an ad marketplace. The ad marketplace then runs an auction among advertisers interested in the opportunity to serve an ad to that consumer. Dozens of advertisers may simultaneously compete in such an auction. Ultimately, only one of them wins the auction and earns the right to serve an ad to the consumer.
Advertisers now have access to tens of billions of daily opportunities to bid and buy digital media on ad marketplaces. The marketplaces make these opportunities available via auctions and an entire ad auction takes place in a couple of hundred milliseconds
Advertisers participate in “Real-time Bidding” (RTB) within ad marketplaces, and respond with their auction bids within the blink of an eye.
This Marketing Land article has a good summary of the State of Programmatic display in 2020.
They report eMarketer estimates that US advertisers will spend nearly $60 billion on programmatic display by the end of 2019. By 2021, nearly 88%, or $81.00 billion, of all U.S. digital display ad dollars will transact programmatically.
By the end of 2020, the combined ad revenues of Facebook and Google’s media in the U.S. will account for more than sixty percent of advertisers’ total budgets for programmatic display.
This visual summary of programmatic online ad serving is from the UK Online Nations report.