“The advertising industry is on a march toward automation.”

Alex Kantrowitz of Advertising Age may be on to something. Programmatic advertising, media buying and marketing is well on its way to becoming the future of advertising.  This subset of digital advertising is based on data-driven decision-making via computer automation. Marketers are increasingly using data to inform their creative campaigns and an ever-growing number of digital ads are bought without any communication between another person or media company.

Here are a few facts on Programmatic Advertising:

• Ad buying programs are optimized to purchase ads that maximize sales, reach, and other metrics through the analysis of engagement data.
• Ads are bought across many web outlets. Data is evaluated mid campaign to determine the effectiveness of the buy. Money can then be shifted to more effective outlets.
• Ads are bought in real-time, targeting specific customers.
• Ad-space is bid on in real-time. Programs compete for ad space based a user’s online data.
• Programmatic advertising is used primarily in online/social media space.

To put the programmatic advertising phenomenon in context: According to Emarketer, programmatic ad spending will reach $22.1B by the end of 2016.  That equates to 67% of digital display ad spending in the United States. To put that in perspective: Programmatic ad spending for desktop/laptop has increased every year, going from $440 million in 2014, to $3.03 billion in 2016 with an estimated increase to $3.73 billion in 2017.  Mobile has seen an increase as well, going from $190 million in 2014 to $2.48 billion in 2016 with an estimated increase to $3.89 billion in 2017.

Programmatic advertising not only makes transactions faster; it makes them more effective.  Advertisers see the following benefits:

• Specifically, targeted ad buying and placement that equals better ad conversion rates
• Curated ads on the consumer’s side creates a cohesive brand image and consistent experience
• Uses fewer resources than traditional ad buying with greater results

Marketers can optimize programs to buy ads that maximize reach as well as analyze engagement data.  They can also maximize their ad spends by buying more ads that work and stop buying ads that lag behind.  Programmatic advertising can offer more benefits and less cost than traditional advertising.

How does Programmatic Advertising Affect Influencer Marketing?

Brands and agencies continue to turn towards Influencers at an increasing rate. In data from MuseFind, 92% of consumers’ trust influencers more than traditional celebrity endorsements and advertisements. Influencer marketing provides a personal connection and level of trust that other marketing outlets cannot match. Influencer marketing has established its place in the media market, regardless of the prowess of programmatic ads and other outlets.

Influencers themselves are becoming media channels.  They are able to move from social platform to social platform, publishing original content and driving engagement. Could this be defined more through the use of programmatic advertising?  Programmatic advertising and influencer marketing may be headed for a collision course, with influencers looking to expand their reach and advertisers looking to pinpoint-target consumers, influencer and programmatic advertising could be complementary rather than competitive.

The essential benefit from marrying both influencer and programmatic advertising is capturing information in “real-time.” Why? Marketers need as much clear and specific information about a consumer as possible.  What content do they watch? On which platform do they consume content? What other media interests them? Real-time data snaps a picture of this information precisely when it is made. As a result, creative direction and key metrics are consistently updated.  Real-time data, according to CIO, “increases revenue generation and uncovers new revenue opportunities,” a boon to marketers and advertisers.

Programmatic advertising affects influencers through pre-roll video ad selection and surrounding banner ads.  These ads have no actual impact on influencer content itself but programmatic advertising leads to better-targeted ads, increasing click and conversion rates for influencers, increasing influencer revenue. In these ways, programmatic ads and influencer marketing work hand and hand to drive reach and engagement.

For more information on programmatic advertising and how influencer marketing can boost your brand’s marketing strategy, contact Trending Family today!