By Krishnakumar Govindarajan
More access to data and a digital revolution means that digital advertising is rapidly evolving. The entertainment and media outlook report 2022 by PwC shows that India’s internet advertising market is set to increase at a 12.1% CAGR to reach INR 28,234 cr by 2026. And programmatic advertising represents a huge proportion of this.
In fact, programmatic is actually growing at a quicker rate than the overall industry. According to Statista, 75% of digital advertising revenue in India will be generated through programmatic advertising by 2027. We anticipate that this will only accelerate further, with the likes of Netflix and Disney rolling out ad-supported plans.
But what is programmatic advertising? It’s the process of using automated systems to purchase and place digital ads in targeted ways. It ensures the right ad is placed in front of the right person, on the right channel, at the right time. Thanks to innovations in connected TV and digital out-of-home, brands can reach us on any screen – whether we’re at home, at work, or on the move. Programmatic has revolutionized the advertising industry, and is showing no signs of slowing down.
AI/ML driving effectiveness and efficiencies in programmatic advertising
Programmatic uses artificial intelligence (AI) and machine learning (ML) algorithms to connect and analyze vast amounts of data and valuable insights. This helps advertisers to plan and predict which ad placements are most relevant for the target audience. Through real-time analysis, marketers can see the effectiveness of advertising campaigns and optimize their ads instantly.
Importantly, AI and ML algorithms consider data points across all levels, including first-party, second-party, third-party, macro and micro-level data. This approach creates a more personalized experience for the customer, and it increases engagement and conversion rates, leading to a higher return on investment (ROI) for advertisers.
More than artificial intelligence
Programmatic is powered by both artificial and human intelligence. Effective programmatic is driven by the kind of expertise, understanding and context that only people can offer. The human touch is needed at every stage – from understanding complex and unique problem statements and creating pre-campaign strategies, right through to campaign optimization and developing better tools and solutions.
Advertisers need to work with the right partners to achieve the full potential of data-driven programmatic advertising. The right partners will deliver business objectives based on things that people care about. That can be anything from the images, ad placement and wider message, or brand goals like environmental sustainability, social responsibility or consumer protection.
Environmental sustainability in digital advertising
The internet is largely ad-funded. If the internet were a country, it would be the third largest polluter in terms of carbon emissions. The programmatic industry has a responsibility to help advertisers reduce their carbon footprint and reduce the impact of the internet on our world. Highly targeted programmatic ad campaigns help because they reduce the number of irrelevant ads and wasted ad placements. But there’s still more to do.
Data science and machine learning are key to solving this challenge. The role of data science and machine learning is to understand the impact of the entire programmatic ad supply chain and find ways to maximize efficiencies and minimize emissions. As programmatic campaigns are curated for each advertiser, emissions can vary depending on the country, device, ad format, website publisher, programmatic exchange, and much more.
There’s no fix-all magic button. Instead, achieving true environmental sustainability in programmatic requires a nuanced approach at every stage of the ad chain.
(This article is authored by Krishnakumar Govindarajan, CTO, MiQ, and the views expressed in this article is his own)
