Today, advertisers rely strongly on artificial intelligence and advanced analytics that allow them to provide their business customers with better results of their marketing campaigns, but about two decades ago, no such solutions in digital advertising were available. Do you know when programmatic advertising started, and what modern catalysts brought about its evolution? Read our article to learn more.
In this article, you will learn about:
- The history of the programmatic advertising
- The events from the advertising industry and technologies that affect the shape of modern advertising
- The pros and cons of in-house programmatic advertising and alternative approaches
Table of Contents:
- The beginning of programmatic advertising
- The catalysts for the evolution of programmatic advertising
- Can programmatic advertising be handled by in-house teams?
Markets can change overnight, but they rarely do so. More commonly, there are multiple micro-changes that cause other changes, and suddenly we realize that our business environment has transformed significantly, due to the new technologies and solutions that have become available. Programmatic advertising is not a thing that just happened one day – there were various events that made it indispensable and stimulated its growth, and still there are many events and changes that affect it. How did it all start?
The beginning of programmatic advertising
Before programmatic advertising, negotiations of agreements for buying digital ads were time-consuming and as a result, advertising itself became quite expensive. The oldest „ancestor” of the modern, digital ad was probably an old, well-known, static banner ad introduced to the advertising market by HotWired (presently Wired.com). In 1994, it was something new and perhaps even a little intriguing for users – at least intriguing enough to score a CTR between 40-50%. Sounds impressive, right? Of course, these were different times and users were exposed to so much less advertising content. Over time, the average CTR went down, when more and more ads started to appear on the Internet.
Just two years later, in 1996, the first ad server – Double Click – was created (11 years later, it was bought by Google) and, in time, new servers were built and the first network for advertising started to take shape. In 2000 the famous Google AdWords (currently known as Google Ads) was released. Perhaps this wasn’t the beginning of programmatic just yet, because it only enabled advertising in Google’s network, but it was a breakthrough in digital advertising. Finally, in 2013, Google’s AdSense was released – this was a display ad network. There were, of course, other companies on the advertising market, but Google’s solutions were the most popular due to the success of their search engine.
Programmatic advertising platforms and automation
The adoption of programmatic started from the need of premium publishers to monetize all of their inventory, but in the end it made the entire process much easier for all parties involved. AdSense gave the publishers the possibility to offer their websites as an advertising space. This had negative consequences as well – suddenly Google had to face enormous amounts of SPAM sites etc. Before Google’s Panda Update for search optimization, the first RTB (real-time bidding) solutions were designed and built in the first decade of the 21st century . From this moment on, programmatic advertising companies started to follow the general tendency in business to become more data-driven and automated in general.
Eliminating the human factor and the automation of that process made it more efficient and allowed brands to advertise more effectively. Costs were reduced and effectiveness increased… Did it, though? In a way, yes. You have to remember that competition is increasing, so new technologies and solutions are required. What sort of programmatic advertising techniques are leveraged?
The catalysts for the evolution of programmatic advertising
The programmatic advertising evolution is still under way. Below, we describe the most popular trends that influence the world of digital advertising today.
General process automation
Automation became popular among various industries and company departments. The time also came for marketing and advertising. It serves all the parties involved – programmatic platforms owners, websites owners and companies that want to promote their content. Automated ad placement reduces the time needed for displaying an ad (because no face-to-face negotiations are needed) and improves the ad’s performance, as the right media for displaying an ad is selected by advanced algorithms.
Contextual targeting services availability
The development of the new targeting approaches requires the advertising environment to improve continuously in order to support new advertising solutions. As programmatic advertising is evolving, new solutions like contextual targeting are evolving as well. The very existence of programmatic advertising has improved user experience. Of course, the entire SPAM problem was rather inevitable. The negative connotations related to it can be avoided by the brands that invest in programmatic advertising. The main benefit of contextual targeting is to provide users with non-organic content (ad) which will be closely related to the content they are viewing at the very moment.
According to our estimation, In 2022, 82% of the traffic on the internet will be by video. Research shows that video advertising is becoming more relevant to customers. They would prefer to consume content in the form of a short video, rather than in other forms. Programmatic video advertising techniques include ContextAI, with which we are able to display your ads to the right audience. Proper video ad campaign optimization can help brands to promote their content more efficiently.
Changes in the privacy requirements and the elimination of 3rd-party cookies
3rd-party cookies have been leveraged by some companies for over 25 years, but their importance has decreased. It no longer meets the current privacy trends, hence in January 2020 Google made a decision about removing it and in June 2021 the company declared that it would phase out 3rd-party cookies at the end of 2023. The removal of 3rd-party cookies is a huge change, for sure, but it’s just the beginning of a bigger revolution in the digital advertising area. Advertising companies have to adjust their services and processes to the new privacy regulations (for example, GDPR, CCPA, the new EU-US Privacy Shield, etc.).
Can programmatic advertising be handled by in-house teams?
The answer to the question whether programmatic can be managed in-house depends on the brand, its digital investments, maturity, and capabilities. As you see, these days, managing an advertising campaign on your own is quite challenging, but it is not only just about the regulations… To succeed in programmatic advertising, you need proper tools, resources, and knowledge. You may realize that it is more cost-effective to cooperate with one of the experienced programmatic advertising companies, rather than handling it in-house.
Specialized advertising partners have bigger resources and, by cooperating with experts, you may gain access to the best advertising opportunities. It is important to bring at least some competencies in-house to stay informed and in-control of the process, but in many cases, carrying out programmatic advertising fully in-house may prove to be inefficient.
If you have any questions, comments or issues, or you’re interested in meeting with us, please get in touch.