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Last Updated on April 22, 2023 by Rovamedia
As technology continues to advance, the world of digital advertising has seen significant changes. Programmatic advertising that uses artificial intelligence (AI) has emerged as a popular approach to buying and placing ads. According to eMarketer, programmatic advertising spending in the United States is expected to reach $80.43 billion by 2021, with programmatic display advertising accounting for 83.5% of all display ad spending. With this rapid growth, many are wondering if programmatic advertising with AI will account for 80% of digital advertising by 2023.
What is Programmatic Advertising?
Programmatic advertising is an automated approach to buying and placing ads in real time. This technology uses algorithms to target specific audiences with relevant messages, making it a more efficient and cost-effective way to advertise. Programmatic advertising allows marketers to set their targeting criteria and budget, and the system takes care of the rest.
The Role of AI in Programmatic Advertising
AI is the driving force behind programmatic advertising. It allows marketers to process vast amounts of data in real time, making it possible to target specific audiences with relevant messages. AI algorithms analyze data such as browsing history, purchase behavior, and location to determine which ads to serve to each individual user. This approach results in more personalized and effective campaigns.
Benefits of Programmatic Advertising with AI
Programmatic advertising with AI offers several benefits to marketers. First, it saves time and money. By automating the ad-buying process, marketers can focus on creating and optimizing campaigns rather than manually buying and placing ads. Second, it delivers more effective campaigns. AI algorithms can analyze data in real time to determine which ads are most likely to resonate with each individual user, resulting in higher conversion rates. Third, it provides better targeting. Programmatic advertising allows marketers to target specific audiences based on demographics, behavior, and interests.
Challenges of Programmatic Advertising with AI
Despite its benefits, programmatic advertising with AI also presents some challenges. One major concern is privacy. As AI algorithms collect and analyze vast amounts of data, there is a risk of violating users’ privacy. Another challenge is ad fraud. Programmatic advertising has made it easier for fraudsters to create and distribute fake ads, resulting in wasted ad spend. Finally, there is a concern about AI bias. AI algorithms may unintentionally discriminate against certain groups or perpetuate stereotypes.
Will Programmatic Advertising with AI Account for 80% of Digital Advertising by 2023?
While it is difficult to predict the exact percentage of digital advertising that will be accounted for by programmatic advertising with AI by 2023, the trend is clear. Programmatic advertising is rapidly growing and will continue to do so in the coming years. The COVID-19 pandemic has accelerated this trend, as more people have shifted to online shopping, leading to an increase in digital ad spending.
However, it is important to note that there are still challenges that need to be addressed. Marketers must be mindful of privacy concerns, ad fraud, and AI bias as they continue to adopt programmatic advertising with AI. By taking a data-driven and ethical approach to advertising, marketers can maximize the benefits of programmatic advertising with AI while minimizing the risks.
Programmatic advertising with AI has emerged as a powerful tool for marketers, providing a more efficient and effective approach to advertising. While there are concerns about privacy, ad fraud, and AI bias, the trend toward programmatic advertising is clear. Whether it accounts for 80% of digital advertising by 2023 remains to be seen, but it is clear that programmatic advertising with AI will continue to play a significant role in the digital advertising landscape.