What is programmatic advertising and media buying?

In the age of mass marketing, programmatic advertising is redefining the way organisations communicate and form relationships with diverse audiences in a heavily segmented market.

The revolution of targeted advertising in the digital era

Ever felt like you’re being followed online? It’s not your imagination – it’s a sophisticated advertising tool taking the world of digital communication by storm. No matter how varied your browser session might be, from online shopping to checking the sports score, you might see the same brand continue to appear across different websites.

Programmatic advertising enables advertisers to directly target relevant market segments, and its impact on the digital communication industry has been revolutionary.

By using software to purchase digital advertising, marketers and advertisers can efficiently purchase ads in optimal digital spaces. It marks a significant shift from mass to niche targeting – ensuring messages are reaching the right people at the right time.

Is programmatic advertising a big deal, or a passing trend?

Zenith Media’s Programmatic Marketing Forecasts expects programmatic ad spend to grow by 19 per cent in 2019, reaching US$84 billion globally (62 per cent of digital media expenditure).

In Australia, this figure is set to top $2 billion, having grown exponentially from $83.7 million in 2012 to $1.74 billion in 2018. By 2020, Zenith predicts programmatic spend will rise to $2.92 billion and represent 27 per cent of all digital advertising spend.

With exponential growth, it is hardly surprising that 65 per cent of media-buying companies are now offering programmatic buying in-house, and other channels like TV and radio are following suit with Channel Nine automating the buying and selling of inventory through its 9Galaxy platform back in 2017.

John Banks, Associate Professor in the Creative Industries Faculty at QUT, says programmatic advertising has become a powerful facet of digital communication.

“As spend increases, programmatic advertising has become an essential component of a digital marketer’s toolkit. Media buyers, marketers and communications professionals need to be attuned to what is happening in the digital industry to effectively future-proof their careers.”

How does programmatic media buying work?

Programmatic media buying simplifies the bidding and buying process for media professionals. Buyers enter campaign goals and key performance indicators into software, which uses digital audience behavior to predict where audiences are most likely convert. The algorithm serves ads in these spots to help advertisers meet their goals and achieve the best possible result.

The algorithm works by targeting individual characteristics and behaviours, enabling ads to reach people that have needs relevant to the brand. This transcends traditional, broad brush advertising strategies that inefficiently target a particular website, often incorrectly assuming that all site visitors will be their target audience.

Using the old approach, an advertiser might target a sports website with football ads, even if those currently visiting the site are cricket fans. With the new approach, advertisers can distinguish between those interested in football and those interested in cricket – targeting the individual, rather than the website they happen to be on.

Programmatic advertising improves the efficiency of digital marketers. It ensures their money is spent wisely and frees up time and resources to allow greater focus on creative and strategy.

Where does programmatic advertising fit in an evolving industry?

There is little doubt programmatic has become a steadfast in a new marketing model that brings together creative marketers and precise programmatic software.

By combining automation and data, the new model allows marketers to replace mass advertising with personalised, customised ads in real time.

Senior Manager of Content Marketing at LinkedIn, Sean Callahan, found that serving high-quality ads to users on a personal level not only enhanced brand experience and generated click-throughs, but inspired users to take the next step in the marketing funnel.

Associate Professor Banks says, as was the case with social media a few years ago, marketers not making the most of programmatic advertising risk being left behind.

“Digital marketing evolves at a rapid pace. Marketers need to be constantly learning to stay on top of their game. Now that programmatic advertising is becoming more commonplace, brands that embrace the software will be better placed to establish meaningful relationships with their audiences through advertising and achieve better results.”

“If you’re an aspiring digital strategist or want to get ahead in digital communication, there are a range of courses out there to help your reach your goals, such as the newly launched Master of Digital Communication with QUT Online.”

“Programmatic methods, computational tools and other digital technologies are profoundly reshaping the media and communication industries. This presents new opportunities and challenges for communication professionals to effectively and ethically apply new technologies. A key focus of this course to help professionals to stay up-to-date and competitive in a fast-changing world.”

Programmatic advertising is not a daunting concept accessible only to programmers and high-level marketers. It is an opportunity for marketers and brands to improve their digital footprint by targeting the right people at the right time.

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