The History of Programmatic Advertising

Programmatic advertising started with a humble banner ad. While that might sound simple and ineffective, it actually produced some pretty fascinating results. Take a look and learn more about the history of programmatic advertising and how it will evolve in the future. 

WHAT IS PROGRAMMATIC ADVERTISING?

Programmatic advertising is the automated process of buying and selling online advertising space. Traditionally, ad space like a billboard is bought and sold for a specified period, and only one ad is visible. Programmatic advertising changes that narrative by providing flexibility in digital advertising. This way, the ads on websites are customized to each user, their interests, and demographics. 

WHY IS PROGRAMMATIC ADVERTISING IMPORTANT? 

Programmatic advertising helps companies save time and money by automating the process of buying and placing ads. It provides increased transparency and control in ad campaigns by allowing advertisers to see exactly what type of customers are looking at your ad, where your ads are being placed, and any additional costs associated with the ad space. This transparency allows companies to make optimizations throughout the lifespan of the campaign to target the right audience and get the best ROI from their advertising budget. 

THE HISTORY OF PROGRAMMATIC ADVERTISING

Programmatic ads started in 1994 with some of the internet’s very first banner ads. Compared to our modern standards where any CTR above 2% is considered a major win—with most ads only having a CTR of around 0.35%—these first banner ads were a major success with a CTR of anywhere from 40-50%. 

After the success of that first ad, digital marketing started to explode in popularity. DoubleClick, the first ad server, began offering programmatic options in 1996. Their success created an explosion of ad servers between 1998 and 2000. 

In 2000, Google entered the ad market with Google AdWords. Just like Google was revolutionary because it helped clean up the clutter of the internet, AdWords cleared up some of the clutter within online advertising. It provided CPC (Cost Per Click) pricing and started to get very close to modern programmatic advertising with the Google Display Network(GDN), which allowed ads to be placed by targeting segments. 

Around this time, AdSense became a competitor for Google. It offered a form of self-serve advertising, which was more accessible for users, but created a culture of spam content. 

Around 2007, ad exchanges started to offer real-time bidding (RTB) solutions, which was the start of what we currently consider programmatic advertising. 

THE FUTURE OF PROGRAMMATIC ADVERTISING

Programmatic advertising has gone through a few minor changes since the implementation of RTB. Most importantly, programmatic marketing has provided even more support in demographic targeting and helps ads to be placed for segmented audiences. But what’s going to happen from here? 

AUTOMATION

Automation and leveraging AI will continue to grow in programmatic advertising. This will help streamline the process of placing and bidding for ads while also leveraging big data to make sure that the right ad is placed to the right viewer at the right time. 

PRIVATE MARKETPLACES

Broad market ad servers are great at reaching the broad market, but there will likely be a growth of private marketplaces that specialize in specific websites and customers. This shift from an open ad exchange will allow companies to drill deep into demographics and interests to place ads that are hyper-targeted for maximum relevance and impact. 

AD EXPERIMENTATION

Testing and experimentation are in their infancy. With more tools available to quickly create and place ads, there will be more focus on experimentation to create the perfect ad for specific target audiences. 

TRUST THE EXPERTS AT AGILITY

Agility's platform makes it easy to create, manage, and optimize ad campaigns while utilizing programmatic and display advertising. 

Contact us today to find out how you can optimize your campaign and get the most for your marketing budget.