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The Evolution of Online Advertising

In 1994, back in the days of Netscape, AOL, and dial-up connections, a seemingly innocuous image appeared on Hotwire. This static image was actually an advertisement, the first of its kind, which allowed users who clicked on it to be taken directly to the advertiser’s site. Though initially slow, cumbersome and one-dimensional, this new media held huge promise for brands. The banner ad (as digital display advertising was called a decade ago) captured the interactivity of the Web in ways that more traditional, “one-way” advertising like TV, radio, print and out-of-home advertising couldn’t. Advertisers were quick to jump on board. By 1999, online ad spending reached $1 billion globally.

But the marketing industry wasn’t alone in its investment in online media. As the Internet evolved into a more viable sales medium, businesses began investing in e-commerce and content sites (initially online versions of newspapers or magazines, rather than the branded content of the present day), and selling advertising on those sites. As consumers began using the Internet for more activities (shopping, finding information, entertainment), the tactics employed by advertisers became more sophisticated. Static banner ads gave way to animated banner ads. Then came pop-up ads, pop-under ads, pre-roll video and, importantly, search.

As consumers began using the Internet to find information about new products, sales and shopping, Google began selling advertising based on consumers’ queries. Google’s Adwords program — setting a price for words that could be common in a search — allowed companies to put themselves in front of consumers at exactly the times when consumers were looking for them. No longer did advertisers have to waste money hoping consumers would be receptive.

With both consumers and companies flocking to the Internet for all forms of information and entertainment, the Web became hugely complex. What had once been a simple transaction between advertiser and publisher was filled in with other options to bring marketers even closer to their consumers. Ad servers, ad exchanges, retargeting companies, ad networks, data suppliers and other tools made online advertising more efficient, but also much, much more difficult to track and attribute. With literally trillions of opportunities available for advertising, tracking ad campaigns manually was not only time consuming and inefficient, it was impossible.

With so many clients and so many opportunities, new companies launched to connect buyers (the marketers) and sellers (the publishing companies/site owners) in online auctions that could provide large audiences of whatever target the marketer desired quickly and efficiently. This is the basis of programmatic buying, matching marketers to audiences, at a large scale, in real-time, with the ability to track and verify sales instantly.

As more media becomes digital, programmatic promises to revolutionize media buying and marketing in every realm, including those once considered “traditional.” Television, radio, out-of-home, online video — all of them are primed to be revolutionized with programmatic solutions. There will be no area of marketing that will be untouched by this technology. Programmatic media buying is the holistic solution for digital marketers looking to engage with consumers across the breadth of digital media channels.

This blog post is the first in a series for readers that are curious about programmatic technology and would like to educate themselves on the value it can provide to marketers.

Keep up with this series by following the Building Block Series tag on the blog.

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