Programmatic advertising is one of the hottest topics in digital marketing, and it’s easy to see why. Programmatic ads are an efficient and effective way of buying media online, allowing a digital advertising agency to use complex algorithms and data-driven insights to reach the most viable, convertible consumers.

Here’s how programmatic advertising works: content publishers and website owners from across the internet plug into digital advertising exchanges. These work a lot like the stock exchange and allow an advertising agency to join ongoing auctions for ad space throughout the web.

Digital ad agencies use real-time data to determine the value of the ad space, and then submit bids accordingly.  Once all bids are in, the publisher awards the inventory to the highest bidder, and that agency’s ad shows up on the publisher’s site. The entire process takes place in just a matter of milliseconds.

This method of digital advertising isn’t just powerful, it’s also:

1. Efficient – The real-time bidding process allows a digital agency to purchase inventory from hundreds of thousands of websites all across the internet without ever having to negotiate individual contracts or insertion orders. This saves advertisers time, money and resources.
2. Targeted – With a slew of advanced targeting options that leverage both first- and third-party data, savvy ad agencies can ensure their media dollars are only spent on consumers who are valuable to their business – one who are ready to buy and become a customer.
3. Effective – By utilizing advanced algorithms and up-to-date data, an advertising agency can optimize their campaigns to reach consumers at the right place, the right time, and on the right device.

As we look ahead, it seems programmatic advertising is the future of online advertising. It combines critical insights of big data with the power of algorithmic optimization to give digital ad agencies a smart, efficient and effective way to drive business on the web.