The Importance of Programmatic Advertising and Its Impact on the Retail Industry

In today’s market, digital marketing is an essential method of communication for marketers to reach consumers. Digital marketing incorporates communication through various channels such as the internet, email, mobile devices, and social media. It entails programmatic advertising.

According to the Statista article by A. Guttmann about programmatic advertising, it is the “automated buying, selling, placement, and optimization of digital advertising.” Programmatic advertising includes algorithms for placement and bidding of ads and includes social and native ads, mobile displays, and digital videos.

Programmatic advertising continues to gain popularity in today’s market. According to the eMarketer article on US Programmatic Digital Display Ad Spending, 2019, programmatic digital display ad spending was increased from 81.2% in 2018 to 83.5% in 2019 ($46.05 to $57.30 billion respectively). Moreover, increased programmatic advertising is projected from 85.0% in 2020 to 86.5% in 2021 ($68.47 to $79.75 billion, respectively).  

Consumers today are exposed to various readily available information and resources relative to product and services due to rapid advances and emerging technologies that influence their purchase making decisions.  As a result, digital marketing changed the retail industry by creating opportunities for one-to-one relationships between retailers and customers and engaging with consumers in a more innovative, personalized manner.

Programmatic advertising is beneficial to retailers in gaining a competitive advantage over its competition by utilizing technology to ensure that the right messages are sent to the right customers at the right time efficiently and effectively, increase sales, and reduce advertising expenses.   

Real-Time Data Optimization

• Retail marketers can obtain immediate information regarding the performance of their ad campaigns and their target audience.  
• According to the article by Retail Minded, “Programmatic Advertising 2019: Why it’s the Next Big Thing in Digital Advertising,”programmatic advertising is an “automated method…” and “…now possible to gather and analyze data of the campaign as soon as it is launched.  Marketers can improve the campaign based on the collected data.” Marketers can quickly identify which campaign that will provide optimal results.  
• Additionally, retail marketers can collect and utilize real-time data on their customers to create one-to-one relationships by ensuring that the products that they suggest to their customers are the right items and the right fit for each customer based on their individual needs and trends by aligning their suggested products with the preferences of each customer.

Increased Targeting Capabilities

• Programmatic advertising increases the ability of retailers to reach more prospective customers. The Retail Minded article, “Programmatic Advertising 2019: Why it’s the Next Big Thing in Digital Advertising,”states programmatic advertising increases the visibility and the likelihood the campaign succeeds.  
• Programmatic advertising enables retail marketers to engage and connect with the right customers, the right message, and the right time in a personalized way.
• Retail marketers can use machine learning technology to collect more data focused on customer interests, behavior, demographics, and location to deliver programmatic ads online to encourage customers to continue their customer journey to the store and make in-store purchases.   

Improved Budget Allocation 

• Retail marketers can reduce their advertising costs by optimizing real-time data.
• Real-time data optimization enables marketers to focus on the target audiences that generate more revenue and allocate budget efficiently and generate a greater return on investment.

Custom Audiences and Customer Engagement

• Programmatic advertising enables retail marketers to utilize data to focus on custom audiences and ensure they are targeting the right potential customers. It helps marketers identify new customers by creating look-a-like target audiences.  
• Programmatic advertising can also assist marketers in engage previous customers that have become inactive.  
• Retailers can use their customer email addresses from sources such as their newsletter sign-ups, in-store customer loyalty cards to send programmatic advertisements online and ensure their customers engage with the brand across various touch-points in their customer journey.

Programmatic advertising is a fast, cost-effective way for retailers to connect and engage with their customers. It is crucial in allowing retail marketers to use the right channel to communicate the right message with the right customers, and at the right time efficiently and effectively in a personalized way that enhances the customer’s experience on their customer journey. Furthermore, programmatic advertising increases retailers’ sales and reduces advertising expenses. Programmatic advertising not only equips retailers with the tools to maximize their relationships with customers but their overall return on investment.

Did you enjoy this post? Read about the significance of email marketing in the food retail industry in my last post!