In 2013, programmatic marketing was a little known way in which to purchase online advertising space. During 2014, however, this trend grew exponentially; according to eMarketer, this area saw a 131.7% growth this year alone. Within the next five years, programmatic marketing is expected to eclipse all digital advertising spending. In order to appreciate the importance, it is necessary to look at the money spent on programmatic marketing and how it is being spent.

• How Much Money is Spent On Programmatic Marketing: Currently, close to $9.8 billion is being spent on this means of advertising. It is estimated that companies are currently spending 20% of their digital advertising budgets on programmatic marketing, and that estimate is expected to double in the coming year. Various reports indicate that by 2017, nearly $50 billion will be spent on automated targeted marketing.
• Why is This Area Growing: Basically, experts are finding that programmatic marketing allows them to more succinctly target their intended audiences by using sophisticated data that reveals specifically where potential customers go when they are online. In that sense, it is far more effective than radio or television spots or print ads that appear to a broad spectrum audience and are hard to scale. Overall, programmatic marketing can be more time and cost efficient than other forms of marketing that involve sales interactions and negotiations.
• Where is the Money Spent: The greatest growth area to date is in display advertisements (those seen on the webpage, to the side of the main content), as well as banner advertisements that appear at the top of the page. Video, non-standard, and highly customized advertisements are still sold traditionally. However, video and mobile advertisements are increasing, as well as social media (Facebook in particular has several sponsored ads that appear both to the side as well as in user newsfeeds). Internet-connected TV (aka Smart TVs) are the next area ripe for automated marketing. It is also anticipated that advertisements created for mobile devices will surpass those created for desktop/laptop computers.
• Who are the Buyers: Right now, programmatic marketing is predominantly used by companies that are looking to generate immediate sales or sales leads. However, as this trend continues, it is expected that companies that are looking to build brand awareness will also be driven to develop a stronger, effective online presence. Early adopters include big names such as American Express and Proctor and Gamble.
• What Channels are Used: As display is still the prevailing ad type purchased, Retail Time Bidding (RTB), in which available space is essentially auctioned off, is the most common form of programmatic marketing. Private marketplace sales, which are similar to RTB, but working directly with the site publisher as opposed to open exchanges, such as through search engines like Google or Yahoo, are a close second. Gaining traction, however, is programmatic direct, in which buyers can select from guaranteed inventory compared to taking their chances with ad placement. One of the chief concerns of marketers regarding RTB is the lack of control to some extent, in particular what on what pages or even sites their ads are appearing and whether or not the views reflect actual people vs. automated bots. Programmatic direct helps to address those issues for clients who wish to leverage their digital marketing dollar more precisely.

Overall, one can easily expect that by the end of this decade, programmatic marketing will become the primary means by which buyers purchase advertising space. While humans will always be need to interpret data, create campaigns and continue to support efforts, the science of targeting the right audience, at the right time, will become simpler, more efficient, and more effective. This is something to celebrate.