Programmatic Market To Witness Huge Growth In The Next Decade

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Programmatic Market To Witness Huge Growth In The Next Decade

By the end of 2022, programmatic ad spending will reach $95B. That reflects continuous growth over the past several years, but there are no signs of things slowing down any time soon. 

In truth, this growth will continue over the next decade. In this article, we’ll explore why programmatic is so popular and why marketing teams are moving to this automated approach to advertising.

About Programmatic Advertising And Media Buying

Programmatic media buying or programmatic advertising allows advertisers to purchase digital advertising space on websites, connected TV channels, and other platforms automatically. However, instead of involving people in the process of buying and selling, everything is handled using data and algorithms.

The Growth Of Programmatic Advertising

Looking beyond this year, growth in this niche is expected to be explosive. By 2025 the digital ad market just in the US will exceed $300B. Here are some of the factors contributing to this continued growth:

Programmatic Advertising Fits Well In A Cookieless Future

Advertising cookies are set to be obsolete by the end of 2022. This obsolescence has left many marketers concerned with how they will execute their strategies when a key source of their tracking data is no longer available to them. 

One study indicates that 44% of marketers believe they will have to significantly increase their ad spend to compensate for this. When they do spend more money, every indication is that most of that will be on programmatic advertising. 

Businesses on both the supply and demand side of this niche have shown that they are prepared for the change. Programmatic advertising offers many targeting options that don’t require third-party cookies. 

These include location-based and contextual targeting. Additionally, there are collaborative initiatives like the Privacy Sandbox in which tech companies are working to find ways to allow brands to use data without intruding on customer privacy. 

Programmatic Combined With CTV Means Better Targeting And Engagement

Over-the-top (OTT) platforms continue to gain popularity. More householders are becoming cord-cutters. Major OTT platforms like Hulu, Disney+, and Netflix continue to grow. Additionally, new connected TV (CTV) platforms are being added. Many of these are designed to appeal to audiences with very specific interests. 

This connected TV growth has created an opportunity for advertisers to target very specific audiences. For example, imagine targeting advertisements for home goods and remodeling services to viewers on an OTT platform that has been specifically created for the DIY crowd.

In addition to targeting being better and the process of programmatic ad buying being more efficient, there’s another benefit. Programmatic advertising, along with OTT, increases ad engagement and watch metrics. This reality is particularly true when audiences are viewing content over connected television sets.

Automated Ad Buying Is Less Resource Intensive

The most effective marketing teams will be agile and lean. They’ll be able to pivot quickly in a changing business ecosystem, and often with a small budget. That’s been made clear by events over the past three years. 

Programmatic ad buying helps digital marketing teams achieve both objectives. Marketing team members don’t have to spend time managing relationships with publishers and website owners. The upshot of this hands-off approach is that it takes fewer people to manage video ad campaigns.

Finally, programmatic advertising is something that can be done on virtually any budget. Marketing teams can simply set a budget and establish their targeting criteria. Later, campaign budgets can be increased as ROI improves.

Advances In Data Science Will Improve Targeting And ROI

Programmatic media buying wouldn’t exist without data science. It certainly would not be as effective or popular without it. Data is what drives the ability to properly target audiences and select the right placements for ads. 

Data scientists are constantly improving how data is analyzed and understood. The sheer volume of available data is also going to increase significantly over the next decade. That represents even more information that can be used to strengthen algorithms and get better results, especially when the data is seamlessly integrated into performance marketing platforms.

Trust And Expectations Are Increasing

Thanks to better relevance and improved targeting efforts, consumers indicate that they have more trust in advertising now than in the past. The accuracy of programmatic ads has quite a bit to do with that.

At the same time, expectations are also increasing. Now that audiences know they can be targeted with ads that are relevant to them, their tolerance for low-quality, low-effort ad campaigns is dwindling.

Brands that have yet to adopt programmatic ads are going to have to do so sooner than later. Otherwise, they won’t be able to compete with brands that are already serving up relevant ads with perfect timing.

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