Modern examples of AI programmatic advertising solutions allow business owners or outsourced advertisers to no longer advertise their products or services randomly. They actually can reach much more specific segments that are, ultimately, more interesting for brands. Programmatic advertising is already a reality for modern industries, so this article is dedicated to discovering what you might not know about how AI programmatic advertising works and the potential it has.
What is programmatic advertising?
Programmatic advertising is a way of buying ads that uses a lot of data. Advertisers choose to purchase access to targeted audiences instead of specific ad placements. Any AI programmatic advertising company should entirely explore and provide solutions or a real-time advertising buying and selling model, which is different from traditional advertising in that it reaches exactly the audience that interests us at the time that interests us.
For example, we know that our product is aimed at 40-year-old women with children, who live on the outskirts of the city and do not have a car but are looking to buy one. Through programmatic advertising, it is possible to reach this profile of people, discarding those who do not meet the characteristics of our audience. Therefore, it also becomes a very profitable way of advertising since you only pay to reach the consumers that interest you.
How does programmatic advertising work?
Programmatic advertising uses advanced computer programs to find the right matches between the information brands give about their target audience and available ad spaces in various media at certain times. In other words, it is a semi-automatic system where advertising spaces are purchased through bidding.
Programmatic advertising is possible thanks, without a doubt, to great technological advances, Big Data, which allows us to know people better, and to the desire of brands to find an effective way to communicate with their audiences.
However, to understand how programmatic advertising works, it is important to be familiar with the following terms:
- Trading Desk: a team of people who develop their own technology to buy programmatic advertising on various platforms known as DSPs.
- DSPs: Demand Side Platforms (DPS) work with an internal algorithm that finds the cheapest impressions for the advertiser’s banners every second.
- Ad Server: This is an ad server that allows you to broadcast or serve to find AI programmatic advertising tools set within the advertising spaces of different websites.
- Ad Exchange: This is the meeting point between digital supply and demand. It collects advertising spaces from SSPs and generates auctions that are sent to DSPs that are responsible for automatically purchasing these spaces.
- SSP: Sell Side Platforms (SSP) are platforms that automate the commercial management of thousands of digital media.
All this means that it will be the advertiser who will buy advertising in real-time through bids known as Real Time Bidding, specialized platforms to offer impressions to the advertiser with the highest bid. Therefore, these are digital auctions with the aim of advertisers paying for the number of people with a specific profile.
Ad Exchanges or Marketplaces are platforms that act as intermediaries between buyers of programmatic advertising and sellers.
Advantages of programmatic advertising
Programmatic advertising has undoubtedly been an innovation for advertisers and offers them great advantages. Below we show you the most emblematic ones:
- Automation. With programmatic advertising, the media outlet offering the advertising space is not in charge of the conversations for distribution, but by connecting to an SSP platform, the resources are managed automatically.
- Free market. In terms of programmatic buying, the market is opening up, allowing any media outlet to buy and sell advertising space, taking into account advertisers’ preferences. In addition, advertisers and media outlets from all over the world can distribute their campaigns and access them without geographical limitations.
- Market-adjusted price. Unlike in the past, where the publisher set the prices, with programmatic advertising, advertisers bid exclusively for the purchase of an impression. This ensures that the price paid is in line with market demand.
- Possibility of segmentation. In these campaigns, it is possible to carry out different segmentations, either geographically or demographically, by content through websites and by audiences, which are generated thanks to the information that we have previously collected on the platform and by technology that ends up segmenting by device, telephone company, or operating system.
Using Big Data
Big data is very important for programmatic advertising and artificial intelligence. The first one lets a lot of data be gathered and looked at right away. The latter finds patterns and insights that help advertisers understand what works well and what doesn’t. This includes information about audiences, time slots, creative ideas, or calls to action. Geographical, meteorological, and traffic data can greatly influence the effectiveness of a campaign. By using this data in their advertising strategies, brands can improve where and how their ads appear to make them more effective.
Improved return on investment (ROI)
Combining audience targeting and efficiency helps improve how advertising money is spent. By reaching the right people at the right time, advertisers get the most from their money and make their ads work better. Furthermore, the SmartAds AI-powered solutions can learn and adapt, ensuring that campaigns continuously improve over time. As algorithms gather more data and change their approaches, ads usually perform better, which leads to a higher return on investment (ROI).
Future innovations in programmatic advertising and AI
The future of programmatic advertising and artificial intelligence is bright. As technologies advance, new opportunities and challenges arise for marketers. Some emerging trends we can look forward to include:
- Predictive advertising, using AI to predict consumer behavior and adjust campaigns accordingly
- Integrating immersive experiences into advertising campaigns to increase engagement.
- Content automation is personalized in real-time and based on the behavior and preferences of user segments.
Conclusion
AI and machine learning are transforming programmatic advertising, making campaigns more efficient, personalized, and impactful. By automating processes like audience targeting, bid optimization, and creative development, AI enables advertisers to reach the right people at the right time with precision. New formats like Connected TV (CTV), augmented reality (AR), and virtual reality (VR) offer immersive, interactive ad experiences that engage users on a deeper level. AI-driven programmatic ads also enhance fraud detection, privacy protection, and campaign optimization. As businesses continue to integrate content marketing into their strategies, AI-powered programmatic advertising will play a crucial role in driving growth and building customer loyalty.
