It is apparent that programmatic advertising is not only growing in popularity, but it is also becoming very sophisticated. According to the latest US programmatic ad spending stats and forecast, more than two thirds of total US ad spending happens to be programmatic. And according to eMarketer the growth of programmatic ad spending is being driven by the growing use of mobile devices.

US programmatic ad spending

But what exactly is programmatic advertising?

Programmatic advertising uses demand side software algorithms and interfaces to aggregate, book, analyze and optimize online display ads. In other words, programmatic advertising uses software to predict and to automatically buy digital advertising resources through real-time auction processes like what happens in programmatic stock trading. Programmatic advertising is a form of artificial intelligence with four key characteristics:

  • It bids on advertising inventory source
  • Occurs in real-time
  • It offers an opportunity for one specific ad to be shown to one specific customer in one context on one device.

For instance, a programmatic ad would set to bid a maximum of $ 5.00 on any visitor that has visited a specific website in the last 14 days.

Programmatic mobile and video advertising on the rise

Having said that, as buyers and sellers increasingly become comfortable with technology, programmatic has become one of the most extremely efficient when it comes to reaching the right audience at the right time and place. Mobile is the driving force behind the exponential growth of programmatic advertising. By the year 2018, mobile programmatic advertising will account for 43% of U.S mobile related ad revenue compare to the 6% that was recorded in 2013. Only a few years ago, desktop dominated programmatic ad revenue. This just goes on to show how things have changed within a very short duration.

Another key area of programmatic advertising that draws a lot of interest is the programmatic video advertising. The escalating reach and connectivity of digital video advertising provides better outlets for engagement for marketers. Consumers no longer spend as much time as they used to on traditional media to discover new brands and for entertainment as they do with digital video. Business Insider is predicting that online video revenue will hit $5 billion in 2016 from $2.8 in 2013. On the other hand, TV revenue is expected to decrease by 3% per year. Therefore, publishers will keep offering a greater portion of programmatic video resources to promoters and marketers.

The Bottom line

There is no doubt that programmatic advertising is not about to go away. On the contrary, we are only beginning to witness its growth and advertisers are yet to realize its full potential. Over the coming years, mobile and video programmatic ads spending is likely to grow at double-digits growth. It is time advertisers increased their demand for programmed, highly-targeted audiences.