The scope of programmatic - Adwords Tutorial

- [Narrator] To best understand the programmatic industry today, it helps to understand how it changed online advertising from yesterday. In the very recent past, if you were an advertiser that wanted to reach an audience, say mothers between the ages of 25 and 35, who are concerned about healthy eating, you would have to first find a publisher who had that audience, a publication for that audience with an online component, like "Mother's Day" or "Family Circle," which were well-subscribed magazines for that audience. Or you would need to find popular websites and bloggers that appealed to that audience. After finding a publisher, you would negotiate your ad placement. It could be a banner on the top of the homepage or a square on the sidebar. Would the ad be multimedia, and how many times should the ad be shown to users? Or as some advertisers would do, purchase every space available, top banner, sidebars and footer space on every page. The contract negotiations were substantial. Big publishers with millions of visitors demanded more money. Smaller publishers with fewer visitors had very little leverage. Advertisers were challenged to have a marketing mix that reached as many visitors as possible while keeping costs low, and a few large publishers could take up the entire budget. Next, they had to create an insertion order to define the campaign, but if something changed, you need a new insertion order. And usually this system required the publisher, the advertiser, agencies for both, and probably other players to make everything happen. The system began to change as advertising technology tracked user behavior with cookies and device identifiers. The most pivotal change, however, was the ability of large databases to associate a device to an internet user that matched certain criteria; demographic, geographic, or behavioral. Once systems could view the websites that a user browsed and match that with known user data, a profile could be built that targeted that 25 to 35 year-old mother. Then knowing her demographic, her cookie profile, the websites she has visited, advertisers could now target her individually, regardless of what websites she visited. Instead of building massive campaigns on a few websites and hoping she would see those ads, advertisers can now target her based on her demographic or online activity. So if she visited a news website, she would see the advertiser's ad, shown specifically to her. If she opened a weather app on her phone, she would see the ad. If she browsed any site that shows ads, She would be able to be served ads from that advertiser. The system now benefits all parties involved. For advertisers, they can target groups of people that fit their ideal customer profile and make immediate changes in real-time. For publishers, on any site or app, they can monetize by showing ads. And small publishers no longer need to compete for advertising contracts and budgets. The industry benefits as the automation creates a streamlined system of bidding and payouts, meaning no more extensive contracts or negotiation. And this also benefits customers. According to the Internet Advertising Bureau, consumers by a wide margin, 71%, prefer ads that are targeted to their interests and shopping habits. This is how programmatic transformed the advertising industry. From wide-targeted billboard style ads to personalized one-on-one advertising based on the consumer's preferences and behavior.