Programmatic Advertising Isn't Dead — it's Just Getting Started

According to cynics, the death of programmatic advertising has finally arrived. This would suggest a major paradigm shift, were it not for one thing: namely, the fact that people have been predicting the death of programmatic advertising for years.

They've been wrong before and, perhaps unsurprisingly, they're wrong now. But that doesn't mean things aren't changing. They are — and fast.

To make one thing clear: the problems that advertisers have historically had with programmatic advertising exist. They're real, and they're important to understand. But they're important to understand precisely because programmatic advertising is indeed a powerful tool and very much alive.

Instead of staying static, programmatic advertising has evolved to meet this unprecedented moment — providing benefits for advertisers that are impossible with any other tool.

A Changing Programmatic Landscape

The overall digital advertising landscape is changing at breakneck speed, fueled by top ad platforms like Amazon.com, Facebook/Meta, Google, and TikTok. There's no doubt that the sector is becoming more complicated and advertisers are struggling to keep up with the ever-changing trends.

Programmatic advertising streamlines the ad-buying process by using data and automation to place ads where they’ll have the most impact. Through real-time bidding and advanced targeting, it helps advertisers reach the right audience at the right moment, boosting both efficiency and results.

However, one of the major issues has been a lack of transparency. Long before the artificial intelligence era kicked off in earnest, marketing professionals complained about the black-box nature of programmatic advertising. A lack of transparency is a perennial issue in the industry, with fears of bot-inflated numbers always foremost in ad buyers’ minds (especially after some well-publicized controversies last decade).

Arguably, AI has made the black-box problem worse. With the rise of machine learning and AI-driven ad campaigns like Google's Performance Max and Meta’s Advantage+, even more power has been ceded to unknowable algorithms. Things that were once highly automated have in some instances become completely automated, leaving advertisers feeling like they have no control over things like targeting decisions and ad placements.

It's a paradox. On the one hand, given the unprecedentedly vast stores of data flowing into most businesses today, hyper-automation really is the only way to effectively marshal resources and reach customers. On the other hand, the more that advertisers cede control, the less power they feel over the direction of their campaigns.

All of this, of course, is compounded by the problems that have beset programmatic advertising from time immemorial, such as brand safety control around ad placements, data privacy concerns, and a general sense of not seeing a return on investment.

Again, these problems are real. However, they don't mean programmatic advertising is down for the count. In fact, the opposite is true.

An Evolving Programmatic Landscape

“The rise of CTV coincides with cord-cutting — 60 percent of U.S. households now stream content exclusively, making programmatic the only scalable way to reach them.”

Programmatic, as the sine qua non of internet advertising, has always been highly adaptable. And that remains the case today.

Think of it this way: there are simply more places to advertise than there have ever been before.

Programmatic advertising 10 years ago meant, almost without exception, static boxes on social media platforms and open-web publisher sites. From these humble beginnings, we're currently witnessing a plethora of advertising opportunities.

Connected TV (CTV) is one notable example. In just the last few years, virtually all the major streaming platforms have implemented ad-supported tiers, including Netflix, Amazon Prime, and Hulu. Every show watched on these platforms is now a programmatic advertising opportunity. With the average adult watching 123.4 minutes of connected TV per day in 2024, that’s hundreds of millions of new ad spots every month. And this applies to the screens now available for programmatic advertising in subways, pizza shops, and bus shelters (in what is known as digital out of home, or DOOH, advertising).

This is especially important as 60 percent of U.S. households now stream content exclusively, making programmatic the only scalable way to reach them.

Add the rise of vertical video and the podcast revolution into the mix, and you're looking at a veritable explosion of programmatic advertising opportunities.

Of course, none of this would matter if the problems that have historically hounded programmatic (e.g., lack of transparency, privacy concerns, etc.) were not being actively addressed. But they are, in meaningful ways.

For one thing, there are new reporting tools that advertisers can utilize. Through real-time reports and optimization levers, businesses can now receive instant feedback on their campaigns and adjust their performance accordingly. Through more advanced data techniques, they can also ensure a better ROI — and get a tangible sense of what they're actually spending their money on. Then there are the countless watchdog standard groups such as IAB (the Interactive Advertising Bureau), the AMA (American Marketing Association) and others that have sprung up in recent years, which have imposed real (and often quite stringent) standards on the industry — standards that programmatic networks flout at their peril.

On the consumer end, the rise of first-party data — i.e., data collected directly from the consumer with their consent — has ushered in a golden age of ethical advertising. This approach focuses on placing ads based on the content of a webpage or the context of the user's interaction rather than relying on individual tracking. This is not only a more consumer-friendly approach but also often a more effective one, sales-wise.

It's worth remembering that programmatic advertising is a relatively new industry. It makes sense that we had to spend 15 or so years working out the kinks. These were growing pains, and they were necessary. But advertisers today are far better equipped to navigate this space. For one thing, they know they need to partner with reputable DSPs and SSPs (and thankfully, the industry has made much more of an effort to elevate those DSPs/SSPs that operate ethically). They know, too, that for a campaign to be successful it needs to be omnichannel, conducted as a single entity across multiple platforms, ensuring that every component works in unison.

Programmatic advertising is far from dead. In fact, this might be the most exciting moment programmatic advertising has seen in years. By growing smarter and more aligned with the demands of modern advertising, it has lived not merely to see another day but to thrive. The virtues of agility, innovation, and data fluency never go out of style.

Mitsunaga Kikuchi is the founder and CEO of Shirofune, the digital advertising management tool that automates ad campaigns through an easy-to-use interface for management, budgeting, monitoring and analytics.