Current trends in the programmatic advertising market

Until relatively recently, placing ads on the Internet and, in particular, on websites required fairly lengthy negotiations with resource owners, discussing a huge number of details, and multi-level approvals. Today, this process has been significantly simplified and accelerated thanks to the introduction of automation both in the purchase itself and in the placement of advertising materials on the network.

To implement this idea, specialized software platforms are used. This is how programmatic purchases, or as they are actively called, programmatic advertising, appeared on the market. Today, this solution can rightfully be called advanced and innovative. It has gained mass popularity and demand. We see similar advertising everywhere now: on websites, billboards, social networks, messengers. Programmatic advertising is becoming more and more personalized, which ultimately contributes to a noticeable increase in efficiency.

In today's review, we will dwell in more detail on what product we are talking about in principle, what advantages it has. We will talk about what stage this industry is at now and what to expect from it in the foreseeable future. We will cite a number of current trends in the field of programmatic advertising that should be adopted by all business representatives who would like to keep up with the times and not waste their advertising budget in vain, getting the most out of the company's launched campaigns.

What is programmatic advertising

Programmatic advertising — This is the same classic advertising that we are used to, but with one fundamental difference: specialized software packages are used to purchase space on websites, in mobile applications and other platforms. Thanks to this implementation, it was possible to optimize and automate most of the processes that advertisers face when launching their campaigns. In particular, we are talking about collecting and analyzing data, selecting the best platform for advertising, direct bidding and publishing ads. Now those routine and monotonous works that were previously performed manually by marketers are implemented by programmed bots.

If we talk directly about the work of programmatic advertising, then everything is quite simple and logical. Today, there are specialized auctions through which the entire process of purchasing and placing a programmatic advertisement takes place. They are carried out in Real-Time Bidding, that is, in real time and consist of the following main stages:

• The owner of the advertising platform, who is often called the publisher, registers on the appropriate platform, where the auctions will be held.
• As soon as one of the users goes to the website of the owner of the advertising platform, where there is a place to place an ad, the auction sends out a mailing to all potential advertisers, informing them that there is an opportunity to show their ad to this person.
• An auction is launched in real time between all advertisers who are interested in this offer. The winner is the one who makes the highest bid. As a result, it is his ad that is shown to the user.

Along with placing ads through an auction, programmatic technology also offers an additional way to publish ads - Programmatic Direct. In this case, advertising space will be purchased directly from the owner through specialized platforms, but bypassing exchanges and auctions.

What are the differences between programmatic advertising and its analogues

The main difference between programmatic advertising and other similar products is that here the purchase of sites does not involve direct interaction with the owners of these sites. There are specialized platforms on which this entire process is already automated based on the corresponding algorithmic systems. This makes Internet marketing more flexible, including in terms of the formats of the advertising placed. Here, opportunities open up for displaying both classic banners and any other types of ads. As a result, we get a complete automated system for managing and optimizing launched advertising campaigns based on big data, regardless of the traffic source.

If we talk about the specific differences between programmatic marketing and other types of advertising, the following points should be highlighted:

1. Targeted advertising. With its help, ads are shown exclusively to that category of potential buyers who are interested in a given product. When it is launched, the region of residence, demographic data, behavioral factors of the target audience and a number of related indicators are taken into account. Programmatic advertising also uses this basis to target people who will be interested in certain products, services, but at the same time the targeting will be more accurate, and the entire process of working with ads is automated.
2. Contextual advertising. Such technology assumes that the ad matches the context of the search query that the user enters or directly the content of the Internet page where it is posted. Programmatic advertising is not limited to context, although such classification is also used at the setup stage.
3. Social media. This is a specialized channel for promotion in social networks, combining targeting and the format of advertisements. Using programmatic technology in practice, you can also launch advertising in social networks, but its coverage will be wider, including different advertising platforms.

That is, we can say that programmatic advertising combines the features of all three key types of advertising, providing the widest possible coverage, which ultimately increases efficiency.

Advantages and disadvantages of programmatic advertising

Like any other technology, programmatic advertising has its strengths and weaknesses. So, the main advantages include:

• High efficiency in operation, launch speed. Due to the fact that software algorithms take on such tasks, the processing and analysis of large amounts of data is significantly accelerated. As a result, the decision on placement is made literally in real time.
• Good targeting indicators. Having sufficient information about user behavior allows algorithms to quickly select the most suitable sites and launch relevant advertising on them.
• Scalability. Programmatic advertising is great for launching and managing large-scale campaigns, regardless of the traffic source.
• Optimization of advertising costs. When launching a separate campaign, real demand is taken into account, as well as the auction principle. Thanks to this, the cost of advertising will be optimal for each advertiser in practice.

But before you bet on programmatic advertising, you should understand what problems you may encounter in the upcoming process. Unfortunately, there are also risks and limitations that you need to know about in advance. In particular, certain requirements must be met to enter. Initially, most of them conduct special testing, on the basis of which algorithms are configured that increase the accuracy and effectiveness of programmatic advertising. For those who are just starting to work with this area, this may create certain difficulties. It is also important to understand that access to certain tools and advanced functionality of such platforms is available to large advertisers and specialized agencies, while representatives of small and medium businesses will be able to use only basic tools.

It is also possible that your ad will be automatically sent to sites with a dubious reputation or with irrelevant content, which is fraught with reputational losses. Another nuance is the possibility of cheating. Despite the fact that the work is based on the algorithms of the platforms, it is impossible to exclude the possibility of misuse of funds and click cheating. Are all these shortcomings so serious? Most likely, no, but they should be taken into account before launching a campaign in order to minimize problems and potential risks.

TOP 5 current practices in programmatic advertising

In order for your programmatic advertising to be as effective as possible in practice, to minimize spending and all sorts of mistakes, we rely on advanced practices in this area that are relevant today. In particular, we are talking about such points as:

1. Betting on artificial intelligence.
2. Increasing popularity of in-app and in-game formats.
3. Development of advertising based on CTV and OTT technologies.
4. Growth of programmatic advertising in the Digital Out-of-Home format.
5. Google's departure from classic cookies.

Let's consider each of these options in more detail and highlight the points that deserve special attention.

Betting on artificial intelligence

The fact that artificial intelligence is actively developing, affecting more and more areas of human activity is a fact that many have already seen. If you analyze the past year, you can see that about 60% of all global companies began to implement neural networks in production processes to automate similar and routine processes, as well as to solve a number of other problems. At the same time, the value of the artificial intelligence market is currently estimated at almost 300 billion dollars. And this figure will grow in the foreseeable future. According to experts, by 2030 this market will grow approximately 6 times, that is, its volume will be calculated in trillions of dollars.

This trend will also extend to the programmatic advertising market. In particular, neural networks will be widely used here to solve the following problems:

• Automation of many processes. Neural networks are able to independently generate reports, manage rates based on preliminary recommendations, optimize content, adjusting it to current trends. You will be able to shift work with routine and similar tasks to the neural network, while devoting the freed time to more creative and strategic issues.
• Increasing the accuracy of targeting, focusing on personalization. Modern neural networks are capable of selecting advertising creatives that will take into account the needs of the target audience in detail. Thanks to this, advertising budget expenses are optimized: funds will be directed exclusively to target impressions. As a result, conversion rates will improve. And this is one of the key performance indicators of a launched advertising campaign.
• Creating unique content. It is sometimes very difficult for a person who has been working in the advertising niche for a long time to find an idea that would become the basis for a new campaign. A neural network can take on its generation. It will be enough to make minor adjustments to get an attractive and memorable advertising material.
• Data analysis and subsequent optimization. Modern neural networks are capable of analyzing huge amounts of data in the shortest possible time, structuring the information received, identifying key trends and literally in real time making all the necessary adjustments to the launched advertising campaign, thereby increasing its effectiveness.

That is, we can say with confidence that artificial intelligence in the field of programmatic advertising will become a reliable assistant. But you must understand that no neural network can replace a real person. Where creativity and analytical skills are required, you cannot do without a good specialist. In this case, neural networks should be used precisely as an assistant. One that will help form the basis, offer several ideas, automate similar tasks, voice the text with the voice of a famous actor, generate a picture. The specialist will only have to edit the existing materials, add a touch of creativity to them, and bring them to perfection.

Another point that I would like to draw special attention to. As the Internet began to fill with texts generated by neural networks, many search engines, including Google began to apply additional sanctions to sites with such content. If the check shows that search engine promotion is carried out exclusively with the help of generated materials, the system can apply sanctions and then all work will simply be reduced to a minimum.

Let's repeat once again: artificial intelligence in the context of programmatic advertising is good, but only for automating routine tasks and helping to find new ideas. Otherwise, you shouldn't rely on neural networks, at least in the foreseeable future.

Increasing popularity of in-app and in-game formats

Statistics from one of the services for 2024 showed that modern users use their smartphones for an average of about 90 hours per month. At the same time, this figure is constantly increasing. Here we are talking to me about making calls, and directly about the use of various applications, including social networks, instant messengers, mobile games, etc. On average, this category takes up about 70% of all screen time. The remaining 30% is this is the use of browsers, entertainment applications, listening to music, working with third-party services.

Recently, it has become clear that most users use a mobile application, and not the classic web version of the same product. And here, in principle, everything is clear, since such a solution is more convenient to use. In particular, it requires a minimum of time to load, and the functionality here is mostly more advanced. That is why many advertisers launching programmatic advertising rely on In-app and In-game formats.

Yes, such advertising has always irritated and continues to irritate users. But still, without it, the vast majority of games and related applications simply could not exist. There would be no funds for their regular updates and support. But at the same time, ordinary users for the most part understand that the studios that create these products must have funds for salaries for developers, hosting fees and other related expenses. And this means that an understanding of the need for advertising in society has already been formed. Moreover, everyone makes the best decision for themselves: to watch the ad or buy a paid version of the application to use it without ads.

When launching programmatic advertising, it is worth betting on In-app and In-game formats in order to ensure the highest possible engagement rates among the target audience. In addition, the viewing depth in this case is higher. Most modern mobile applications use full-screen blocks that cannot be closed or scrolled during the game. That is, the user will simply be forced to watch this advertisement to the end. Many games offer additional rewards or performing certain actions for viewing an advertisement, which in itself motivates users to interact with the video. That is, such ad units are endowed with increased visibility, which ultimately significantly increases the effectiveness of advertising.

Another advantage of In-app and In-game formats is the ability to generate really high-quality traffic. In this case, advertising will be targeted at real users. Moreover, here you can additionally set up retargeting and show ads to users of other similar applications.

Development of advertising based on CTV and OTT technologies

CTV and OTT are the technologies that are gradually displacing cable television from the market, offering users much more convenient, advanced and technological solutions. In particular, CTV, or Connected TV is a term that is used today to indicate that the TV is connected to the Internet. Such devices today include everything that allows you to watch content from the Internet on the TV screen. But OTT is a technology through which content is delivered over the network. This includes video broadcasting services, streaming platforms and all those sites that provide viewers with access to films, programs without the need to connect to classic satellite and cable networks.

There is nothing surprising in the popularity of CTV and OTT. Moreover, all this is quite predictable. In comparison with classic television, they offer viewers:

• a huge variety of films, series, programs for any interests and preferences of the audience;
• access to materials at any time without being tied to the traditional television grid: no longer need to adjust to the program schedule, plan your day. free time so as not to miss an interesting program.
• wide availability: these technologies can be used by anyone who has specialized set-top boxes (Apple TV, Xiaomi Mi TV Box), smart TVs, game consoles, including PlayStation, Xbox.

We would like to draw your attention to the fact that programmatic advertising on CTV will be shown on all TVs connected to the Internet, but OTT advertising will be broadcast to viewers using any device, including TV, laptop, smartphone, etc.

According to preliminary forecasts, over the next 3 years, the connected TV market will increase more than 2 times, reaching billions of dollars. At the same time, revenues from programmatic advertising will increase annually by an average of 10%. And today there are all the prerequisites to say that the current year will show quite an impressive growth in advertising on the CTV market.

Among the main advantages characteristic of this technology, we highlight:

1. Maximum accurate targeting. When displaying ads, a huge number of parameters will be taken into account, including the search history of a particular user, the geolocation of his device, as well as those applications, films that are installed on him or added to the "Favorites" folder. Thanks to the presence of such voluminous information, software packages will be able to select the most relevant advertisements. Those that are most likely to interest viewers.
2. Good memorability rates. Statistics show that all advertising that is embedded in content that is interesting to the viewer is always remembered much better. And this means that at the output you get the most engaged views.
3. Excellent viewing rates, high visibility. In principle, advertising that will be displayed on CTV can be skipped after a few seconds of viewing. But people almost never use this opportunity. And the reason here is quite banal - the reluctance to reach for the remote control. In addition, if the advertising itself is not too intrusive, annoying, then no one will skip it a priori.

All this allows us to confidently state that CTV and OTT advertising formats have a number of more than significant advantages. This means that advertisers should not neglect such a promising promotion channel. This market will grow in the foreseeable future, but opportunities should not be missed today.

Growth of programmatic advertising in the Digital Out-of-Home format

Today, outdoor advertising is quite actively used in cases where it is necessary to tell about the brand, the products and services produced to as many audiences as possible in the most visual and interesting way. This niche today includes billboards placed on the sides of roads, at intersections, citylights, screens in shopping and entertainment centers and much more. A modern user faces an abundance of such solutions every day.

Until recently, traditional technology for producing outdoor advertising was actively used, which involved publishing posters on vinyl or paper. As a result, one or several such posters were placed on one billboard (in the case of billboards with a rotating mechanism). And if there was a need to replace one of these ads, then the entire poster or individual sections had to be re-pasted. And this is an expense of material, labor, and time resources.

Digital formats, which have become widely used in practice quite actively today, have made radical changes, including in the field of outdoor advertising. Thanks to them, ads have become more dynamic, bright, and effective. They attract the audience's attention better, and help convey as much useful information as possible. In addition, digital panels allow you to alternate different ads throughout the day. If desired, such advertising can easily be customized to a number of external parameters. Alternatively, in sunny hot weather people will be shown advertisements for water, sunscreen, sunglasses, while in rainy and cloudy weather - umbrellas, waterproof jackets, rubber boots. And it is noteworthy that all these products can be purchased in one store.

Such efficiency has already proven itself in practice many times. If in 2021 the global advertising market in the Digital Out-of-Home format was estimated at about $ 0.5 billion, then according to forecasts next year it can reach $ 6 billion. The demand here is constantly growing, as many companies have already managed to appreciate the advantages of programmatic technologies in outdoor advertising. We are talking about:

• the ability to customize impressions in real time, taking into account the location of the screen, traffic indicators, weather, age and gender of the audience, as well as many other parameters;
• ensuring wide coverage, which is important for local businesses: you will be able to tell the audience about yourself, attract their attention, and lead them away from competitors with more attractive offers;
• improving brand visibility: dynamic, bright and unusual creatives will attract the attention of the audience, be remembered, thereby contributing to increased interest and sales growth;
• fast and convenient analysis of data about the audience, impressions, which is ensured by the ability to install special devices that allow you to recognize the MAC addresses of smartphones of users who are nearby and, as a result, collect anonymized information about consumers and compile a generalized portrait of the target audience with the subsequent offer of the most relevant ads;
• the ability to customize retargeting for even larger audience coverage: also provided by reading MAC addresses and allows you to show the same person advertising not not only on the billboard, but also on his smartphone.

This once again confirms that programmatic advertising is a truly advanced and high-tech solution that can be implemented even in classic outdoor advertising, increasing its effectiveness.

Google's departure from classic cookies

For several years now, Google has been systematically preparing its users, as well as website owners and advertisers, for the fact that third-party cookies will no longer be used. This decision is due to a fairly large number of scandals related to the illegal use of personal user information. But the reason for the formation of such a ban was also the fact that many major browsers have already abandoned cookies at least partially, and some - completely. A striking example here would be Mozilla Firefox, where third-party cookies were disabled by default more than 5 years ago. Following this, Apple also blocked cookies in the Safari browser. Similar restrictions are also in effect today in Yandex: third-party cookies are immediately blocked in the browser.

We would like to draw attention to the fact that in this case we are talking about third-party cookies, i.e. 3rd Party, while 1st Party, i.e. primary cookies will continue to be used on websites. This is a mandatory measure, since without them, the user's work would become more difficult. In particular, you would have to re-enter your login and password on websites every time, items added to the cart would be immediately deleted after exiting the browser, and the speed of loading websites would increase significantly. That is, there can be no talk of 1st Party cookies being blocked. The ban will only affect third-party files.

But this solution could become a serious problem for website owners and advertisers, since 3rd Party cookies are actively used by them to personalize content and set up individual targeting. And if you consider the fact that today Google Chrome is used by about 70% of all Internet users, in the event of such a blocking, it is necessary to find alternative options as quickly as possible.

But is it worth waiting for such a blocking to come into effect? Probably not. Advertisers should already be looking for an alternative solution today. As an option, one of these would be Privacy Sandbox - another product from Google, called "Privacy Sandbox". With its help, you can set up a fairly high level of personalization of advertising for certain categories of users, excluding direct identification. This technology is already at the testing stage, but no one is saying when it will be implemented in practice yet.

But still, the probability that third-party cookies will be blocked in Google in the foreseeable future is quite high. The system has placed a bet on a more conscious choice for the user audience and with a high degree of probability will still make its idea a reality.

Summing Up

We hope that in our review we were able to tell you about the prospects of using programmatic advertising in practice and showed which trends will be relevant in the near future. In particular, when developing such companies, connect artificial intelligence and neural networks to search for original ideas and automate routine work, focus on mobile application formats, games, as well as the CTV and OTT market, that is, connected television. Do not forget about the Digital Out-of-Home format, which today can be called one of the fastest growing advertising channels. It is also worth preparing in advance for the fact that Google may block third-party cookies in the foreseeable future and you will need to look for an alternative solution for content personalization.

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