Online ad purchases involving people are on the way out. In 2015, display advertising will be primarily managed through computer-driven sales.
The New York Post points to a recent report from eMarketer that forecasts 55 percent of all such sales will be done by computers by the end of the year, as technology takes up the tedious task of determining optimal ad rates and deciding when the price goes too high. That means fewer negotiations between live individuals will take place. Even better, these processes can take place faster, with programmatic buying happening in real-time and adjusting on a whim to changing marketplace conditions.
Display advertising alone is a $15 billion business, meaning that roughly $8 billion of those sales will be handled entirely by computers, according to the report. But even more transformative is the way that programmatic ad buying is expected to expand beyond online outlets.
Marketers believe even traditional ads, such as those for television, radio and newspaper, will gradually transition to programmatic buying solutions.
Setting Parameters and Letting Computers Go to Work
It's important to note that computers aren't acting fully of their own accord. Marketers still set the parameters of ad spending so that purchases are controlled, and to give the programmatic buying systems an optimal target for these virtual negotiations. These parameters can include maximum spending thresholds, target demographics and other restrictions to make sure ad purchases are focused and of high value.
The systems then go to work making purchases. Marketers, meanwhile, use analytics solutions to review the performance of the ad purchases, making adjustments to ad buy parameters when necessary. Marketers can focus more on refining campaigns and increasing efficiency instead of haggling over ad purchase prices.
Overall, programmatic ad buying represents a significant decrease in the time commitment of ad purchases. For small businesses, this is a great tool. Smaller outfits face a more level playing field in which their own programmatic solutions can go toe-to-toe with the systems used by larger competitors. At the same time, the cost-per-impression goes down. And because all of these negotiations happen while marketers are busy doing something else, the overhead of running display ad campaigns is lower than ever.