An overview on Programmatic Advertising

Programmatic advertising is the use of software to automate the buying and placement of digital advertising. It uses data, algorithms and automation to target specific audiences with personalized ads and optimize the performance of the campaign. The software automates the process of buying ad inventory, placing ads, and optimizing the performance of campaigns in real-time. This allows advertisers to target specific audiences with personalized ads, while also improving the efficiency and effectiveness of ad campaigns. Programmatic advertising can be used for display, video, mobile, and social media advertising. It is used across a variety of industries, including retail, finance, technology, and healthcare. The process of programmatic advertising typically involves the use of data and algorithms to target specific audiences, and real-time bidding to purchase ad inventory.

Growth of programmatic advertising

The programmatic advertising industry in the US is large and continues to grow at a rapid pace. According to eMarketer, programmatic ad spending in the US was valued at $81.3 billion in 2020, representing 80% of all digital display ad spending. Programmatic ad spending was expected to reach $98.2 billion in 2021, representing 82.5% of all digital display ad spending.

The growth of programmatic advertising is being driven by several factors, including the increasing use of mobile devices, the growth of digital video, and the growing availability of data. As more and more consumers use mobile devices to access the internet, programmatic advertising is becoming an increasingly effective way for businesses to reach those consumers. Additionally, the growth of digital video, such as streaming services, is driving demand for programmatic video advertising.

Furthermore, the growing availability of data is making it easier for businesses to target specific audiences and improve the performance of their ad campaigns. The rise of digital transformation and the implementation of technology such as AI and machine learning, are also playing a role in the growth of programmatic advertising.

Overall, the programmatic advertising industry in the US is large and continues to grow at a rapid pace. It is projected to continue its upward trend in the coming years, and is expected to reach significant numbers in terms of ad spending. Programmatic advertising will become an increasingly important part of the overall digital advertising landscape, as more and more businesses look to use data and automation to improve the performance of their ad campaigns.

Privacy regulations

Privacy regulations have had a significant impact on the programmatic advertising industry. The industry relies on the collection and use of personal data, such as browsing history, to target specific audiences and improve the performance of ad campaigns. However, with the introduction of new privacy regulations such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States, companies are now required to obtain consent from individuals before collecting and using their personal data.

The regulations also require companies to disclose what data they collect, how they use it, and who they share it with. Companies are also required to provide individuals with the right to access, correct, and delete their personal data. These regulations have placed additional compliance burdens on companies, and have made it more difficult for them to collect and use personal data for programmatic advertising.

As a result, many companies have had to adjust their data collection and use practices to comply with the new regulations. Some have turned to alternative forms of data, such as contextual data or aggregated data, to target specific audiences and improve the performance of ad campaigns.

Additionally, companies are also implementing new technologies such as blockchain, to help them comply with privacy regulations. Blockchain technology can be used to store personal data in a secure, decentralized way that makes it difficult for unauthorized parties to access.

In summary, privacy regulations have had a significant impact on the programmatic advertising industry. They have placed additional compliance burdens on companies and have made it more difficult for them to collect and use personal data. However, companies are finding ways to adjust their data collection and use practices to comply with the new regulations, and are turning to alternative forms of data and technology to help them do so.

Buy side vs. Sell side:

In programmatic advertising, the "buy side" and "sell side" refer to different parts of the advertising ecosystem.

The "buy side" refers to the advertisers or agencies that purchase advertising space on behalf of their clients. These companies use programmatic advertising platforms to buy ad inventory, place ads, and optimize the performance of their campaigns. They also use data and algorithms to target specific audiences and improve the performance of their campaigns.

On the other hand, the "sell side" refers to the publishers or platforms that sell advertising space to advertisers. These companies use programmatic advertising platforms to sell ad inventory and make their inventory available to advertisers. They also use data and algorithms to optimize the performance of their ad inventory and increase revenue.

In general, the buy side tends to be more focused on targeting specific audiences and improving the performance of ad campaigns, while the sell side tends to be more focused on increasing revenue and maximizing the value of their ad inventory. Both sides rely on programmatic advertising platforms to automate the buying and selling of ad inventory, and use data and algorithms to optimize the performance of their campaigns.

It's worth noting that, recently, some companies are trying to bridge the gap between the buy and sell side, by creating their own platform to connect advertisers and publishers, this is called the "Supply Side Platform" (SSP) and "Demand Side Platform" (DSP) and these platforms are becoming more popular as they are able to offer more efficient and effective ways for both parties to connect, buy and sell advertising inventory.

The leaders on the sell side of the programmatic advertising industry include a variety of companies such as Google's DoubleClick platform, AppNexus, OpenX, Rubicon project and Amazon's Advertising platform. These platforms allow publishers to manage and monetize their ad inventory. They offer a wide range of features, including real-time bidding, data management and analytics, and ad serving.

The leading buyers of programmatic advertising in the US are typically large brands and companies across various industries such as Proctor & Gamble, Unilever, AT&T, Ford, General Motors, American Express, Wlamart and other leading brands.