What is programmatic advertising?

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Produced in partnership with Jude King of Facebook
Published on LexisPSL on 22/11/2017

The following TMT Q&A produced in partnership with Jude King of Facebook provides comprehensive and up to date legal information covering:

  • What is programmatic advertising?
  • What are the likely implications for future legislation?

What is programmatic advertising?

Programmatic advertising is the automated process of buying and selling ad inventory through an exchange, connecting advertisers to publishers. Programmatic uses artificial intelligence and real-time bidding for inventory. Programmatic advertising allows a website to tailor a specific message to the right person by reaching audiences by demographics such as age, gender, social standing, interests and geographic areas.

In its simplest form, programmatic advertising means an automated way of buying and selling advertising. It is most commonly used for online display, social media advertising, mobile and video campaigns, although it is expanding to traditional TV advertising marketplaces. Traditionally, advertisers had to buy online media space by e-mailing or calling a media owner’s ad sales team and placing manual insertion orders. Now advertisers can use software to bid on ad slots which will be viewed by selected audiences across a group of websites. Automating the ad buying process in this way means that it can be done in real time and does not rely on human interaction, leading to greater efficiency and reduced costs. However, the volume and speed at which programmatic advertising is carried out means that there is a much greater risk of ads appearing in violent, pornographic, extremist and other ‘unsafe’ brand environments if proper safety checks are not put in place by the ad platform and ad buyer.

Programmatic advertising was

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