Advertising today is fast, data-driven, and highly competitive. Marketers need precision, efficiency, and the ability to scale across channels without wasted spend. That's where programmatic advertising comes in, providing automation and intelligence to help campaigns perform better.
Below, we'll walk through: what programmatic advertising is, how it works, the platforms that power it, key benefits and challenges, and how brands like yours are putting it into action.
What is Programmatic Advertising?
Programmatic advertising is the automated process of buying and selling digital ad space in real time. Instead of relying on manual negotiations, it uses algorithms, data, and software platforms to deliver ads to the right audience at the right moment.
At its core, programmatic advertising replaces traditional, manual ad buying with a system that is faster, more precise, and scalable across channels. It allows marketers to reach audiences efficiently while continuously optimizing campaigns for performance.
How Programmatic Advertising Works
Behind the definition is a process that happens in the blink of an eye:
A user visits a site or app → an open ad slot becomes available.
An RTB auction begins → the slot is offered to advertisers in real time.
DSPs evaluate the opportunity → demand-side platforms analyze audience data, campaign goals, and budgets to determine a bid.
The highest bid wins → the winning ad is instantly served to the user.
This millisecond exchange connects advertisers, publishers, and data in one seamless ecosystem.
See our Real-Time bidding guide for a deeper look at the auction process.
To make this work, marketers rely on specialized platforms and tools, the building blocks of programmatic advertising.
Platforms & Tools in Programmatic Advertising
Programmatic advertising relies on a connected set of platforms that manage inventory, data, and delivery. Each plays a specific role in the ecosystem:
Ad Exchange
A digital marketplace where publishers make their ad space available and advertisers bid in real time. Ad exchanges power the auction process that determines which ad gets shown.
Learn more: Ad Exchange
Demand-Side Platform (DSP)
A software platform that allows advertisers to purchase ad placements across multiple exchanges. DSPs handle targeting, bidding, and optimization automatically.
Learn more: Demand Side Platform (DSP): Definition, Types, Benefits & Solutions
Supply-Side Platform (SSP)
A tool for publishers to manage and sell their ad inventory. SSPs connect to exchanges and DSPs, ensuring publishers maximize revenue from their available impressions.
Learn more: Supply Side Platform (SSP): Definition, Benefits & Solutions
Data Management Platform (DMP)
A centralized system that collects and organizes audience data from multiple sources. DMPs help advertisers build segments, improve targeting, and integrate insights into DSP campaigns.
Ad Server
The technology that stores, manages, and delivers ads across devices and channels. Ad servers also track performance and help advertisers measure effectiveness in real time.
Ad Network
A broker that connects advertisers with publishers. While less central in modern programmatic, networks still help aggregate inventory at scale.
These tools form the foundation of programmatic advertising. But what makes brands invest is the measurable impact: clear benefits in efficiency, targeting, and performance.
Benefits and Challenges of Programmatic Advertising
Programmatic advertising offers powerful advantages for marketers, but it also introduces risks that require careful management. Understanding both sides helps you make the most of the opportunity while avoiding common pitfalls.
Benefits
Targeted advertising
Programmatic uses audience data like demographics, browsing behavior, and past interactions to build precise audience segments. Instead of broad campaigns, advertisers can tailor messages to the people most likely to convert. This not only boosts relevance but also helps reduce wasted spend on impressions that don't align with campaign goals.
Learn more: What is Targeted Advertising?
Real-time optimization
Unlike traditional media buys that remain static once purchased, programmatic campaigns update on the fly. Advertisers can instantly adjust bids, refresh creative, or refine audience parameters based on performance signals. This ensures campaigns are responsive to shifting consumer behaviors, market trends, or competitive activity.
Learn more: Attribution and Measurement: Tracking and Optimizing Digital Performance
Automation
Programmatic eliminates the slow, manual negotiations of traditional ad buying. Automated workflows streamline everything from placement to reporting, freeing marketers to focus on creative and strategy. Built-in analytics dashboards provide constant feedback, making optimization more efficient and campaigns more impactful.
Cost-effectiveness
Programmatic CPMs average $1-$5, making it one of the most efficient ways to reach qualified audiences at scale. Real-time bidding ensures advertisers only pay what impressions are worth, rather than committing to bulk buys where value is uncertain. This transparency allows budgets to stretch further and deliver stronger ROI.
Cross-device reach
Audiences move fluidly between devices like desktop, mobile, tablets, and connected TVs. Programmatic connects these touchpoints into a single view, allowing brands to reinforce messaging consistently across channels. This cross-device visibility not only improves recall but also enables more accurate measurement of conversions along the journey.
Explore how to turn these benefits into a Programmatic Strategy
Challenges
Brand safety
Automated ad placements mean advertisers risk appearing alongside unsuitable or harmful content. Without safeguards, this can hurt brand reputation and waste spend. Programmatic platforms with keyword filtering, domain blocklists, and real-time monitoring protect campaigns and keep ads aligned with brand values.
Learn more: Brand Safety & Suitability: Why They Matter
Ad fraud
The programmatic ecosystem is vulnerable to fraudulent activity, from fake impressions to bot-driven clicks. This siphons off ad dollars without delivering real engagement. Protecting spend requires access to high-quality inventory, third-party verification tools, and partners who prioritize fraud detection and prevention.
Data privacy
Consumer data powers programmatic targeting, but regulations like GDPR and CCPA set strict requirements for consent and usage. Marketers must comply with these rules while still personalizing campaigns. Platforms that include built-in consent management and privacy-first data practices make compliance easier while maintaining performance.
Learn more: The Battle For Privacy: From Liability to Asset
Human expertise
Despite automation, programmatic isn't “set it and forget it.” Marketers must oversee campaigns, analyze performance, and interpret insights to ensure algorithms align with business objectives. Without this human guidance, campaigns risk overspending, mistargeting, or missing growth opportunities.
With clear benefits and potential challenges on the table, the next step is learning how to apply programmatic advertising strategically to meet your objectives.
Programmatic Ad Formats
Programmatic campaigns can run across a variety of ad types and channels. Each format offers unique opportunities to capture attention and drive action:
Display ads
Banner and rich media placements that appear across websites and mobile apps. These ads are ideal for building awareness and retargeting users, since they can be delivered at scale with precise audience filters. Interactive formats, such as expandable banners, can also drive engagement beyond a simple click.
Learn more: Display Advertising: Definition, Types, Benefits, and How-to
Video ads
Delivered either in-stream (before or during video content) or out-stream (on publisher sites and apps), video ads provide a dynamic way to tell a brand story. Programmatic video leverages targeting and real-time optimization to ensure messages land in front of the right audience. With consumer video consumption rising year over year, this format is one of the most effective for engagement and recall.
Learn more: Why You Should Be Using Videos
Connected TV (CTV) ads
CTV ads run on internet-connected televisions and streaming services. They are often full-screen and non-skippable, giving brands guaranteed attention in a premium environment. Unlike traditional TV, CTV ads benefit from programmatic precision — buyers can target households based on demographics, interests, and past behaviors, while also measuring performance more directly.
Learn more: Connected TV (CTV) Advertising
Native ads
Ads that mimic the look and feel of surrounding content, appearing in feeds, articles, or recommendation widgets. Native ads are less disruptive than display banners, often leading to higher click-through rates and better audience trust. By blending seamlessly, they allow advertisers to connect with users in a way that feels organic and relevant.
Learn more: Native Could Be Your Most Powerful Ads
Audio ads
Spots that run during podcasts, music streaming sessions, or digital radio broadcasts. Audio ads build brand recognition through voice and sound, which are proven to create strong memory triggers. Programmatic buying allows advertisers to target by genre, audience demographics, or even listening habits, ensuring messages resonate with engaged listeners.
Digital Out-of-Home (DOOH) ads
Programmatic billboards and signage in public spaces such as transit hubs, shopping malls, or city centers. DOOH brings digital flexibility to traditional out-of-home advertising, enabling contextual targeting by time of day, weather, or local events. It's particularly effective for reaching audiences on the move and driving location-based engagement.
With so many formats available, marketers often ask: what does success look like in practice?
How Programmatic Advertising Supports the Buyer Journey
Programmatic is used every day by brands across industries to achieve different marketing goals. Here are a few common applications:
Building awareness
Programmatic display, video, and CTV ads help brands reach new audiences at scale. By layering in demographic and interest targeting, campaigns build recognition among people most likely to engage.
Driving consideration
Mid-funnel campaigns use tactics like sequential messaging, native ads, or contextual targeting to keep brands top of mind. Programmatic ensures audiences see relevant messages across multiple channels and devices, reinforcing recall.
Boosting conversions
Retargeting ads follow users who have visited a site, abandoned a cart, or engaged with content. Dynamic creative can showcase products they've browsed, encouraging them to complete a purchase or sign up.
Strengthening loyalty
Programmatic isn't limited to acquisition. Brands use it to re-engage past customers with upsell offers, seasonal promotions, or personalized recommendations, keeping relationships strong and repeat sales flowing.
Programmatic's flexibility means it can support every stage of the funnel, from broad awareness to retention.
Learn more: Best Practices for Programmatic Advertising
Beyond examples, here's a real-world case study of how one brand drove results with AdRoll.
Case Study in Programmatic: Zoe Lev Jewelry
Zoe Lev Jewelry, a fine jewelry brand known for its custom 14k gold and ethically sourced designs, turned to AdRoll to strengthen its digital marketing foundation and convert browsers into loyal customers.
As the company expanded its customer base and product line, the team needed a more flexible, data-driven advertising solution to unify retargeting, testing, and analytics. Using AdRoll's Shopify Plus integration, Zoe Lev streamlined audience segmentation, automated campaign optimization, and reached new customers across web and social channels.
AdRoll's retargeting and automation tools helped the brand reconnect with shoppers who abandoned carts or browsed without purchasing, while A/B testing and cross-channel placements improved creative performance. With access to AdRoll's wide ad inventory, Zoe Lev delivered personalized messages to high-intent audiences wherever they shopped.
Results:
4x ROAS compared to other platforms
Significant lift in conversions from retargeting and social ads
Greater efficiency through automated workflows
"The ROAS that we see with AdRoll is typically greater than something that we’d see with Google or Meta. So for example, when we’d see 2x ROAS with Meta or Google, we see almost double that with AdRoll.” — Yoann Hayoun, COO of Zoe Lev Jewelry
The Future of Programmatic Advertising
Programmatic advertising continues to evolve, driven by advances in technology and shifts in consumer expectations. Marketers can expect several trends to define the next phase:
AI-powered optimization
Machine learning is making programmatic smarter and faster. Algorithms analyze billions of data points in real time, adjusting bids and placements automatically to maximize performance. With tools like AdRoll's BidIQ, advertisers gain predictive power that keeps campaigns competitive without constant manual oversight.
Privacy-first targeting
As regulations tighten and third-party cookies fade out, the future of programmatic depends on transparent, consent-based data practices. AdRoll's identity graph is built with privacy in mind, helping marketers connect activity across devices while respecting user consent and compliance requirements.
Growth of CTV
Streaming has transformed how people consume media-and programmatic is following suit. CTV is now one of the fastest-growing ad channels, combining television's immersive format with digital precision. Brands can use CTV to build awareness while tracking measurable outcomes across the funnel.
Deeper platform integration
The next generation of programmatic will be even more connected to ecommerce and CRM systems. For example, AdRoll's direct integration with Shopify allows marketers to sync store data, segment audiences automatically, and run programmatic campaigns that drive repeat purchases and customer loyalty.
The future of programmatic is one where campaigns are smarter, safer, and more connected to business outcomes. With the right partner, marketers can turn complexity into clarity, and growth into a repeatable system.
Learn more about AdRoll's programmatic platform.