What is Programmatic Advertising? Complete Guide 2025

To talk about programmatic advertising we must first understand how digital advertising works in general. Yes, that advertising that we feel is closer to us, that is not as “complex” a priori nor as inaccessible as the word “programmatic” sounds. In this article we will tell you what this concept is all about: its beginnings, evolution, technologies, advantages, disadvantages, future trends and much more.

Introduction to Programmatic Advertising

To understand digital advertising we must go back to the beginnings of the Internet and how this business came about.

When Internet traffic began to increase, the companies that owned that traffic (those visitors) saw the opportunity to monetize those visits, and began to offer space on their websites where they displayed third-party advertisements.

The task was not an easy one, as many steps had to be taken in order to activate an advertising campaign. And here are just a few so that you can see how complex this was:

• 
  The advertiser had to decide on which sites to display its ad with a high degree of uncertainty, as knowing the audience profile of a website was often a complex task.
  with a high degree of uncertainty, since knowing the audience profile of a website was often a complex task.
• The site owner had to find advertisers, show them the number of visits received per day, the profile of their audience and their behavior within the site. And with this information capture the attention of a brand that was looking to make advertising investments.
• The advertiser had to contact by email or phone each owner of such websites to know their statistics and see the potential reach that this website meant for their brand.
• 
  They then had to agree on a pricing model for the advertising space,
  nand agree on a purchase of the advertising space.
• 
  The creative pieces were then emailed and the campaign began,
  lwhich was then very complex to measure. Above all, in terms of the reliability of such reports.

Due to these enormous challenges, an ever-growing industry was finding solutions to these problems:

• A way was created in which brands could easily find a list of websites on which to promote their brand, sorted by price, purchase model and audience profile: creating a version of what are today’s
  DSP’s (demand side platform).
  
  • Software solutions were also developed that allowed different sites around the world to connect to a Marketplace. In other words, connecting to a demand hub in a coordinated way and through a protocol. In this way, the supply of sites within DSPs grew faster, allowing brands to have more options, tools and scale to advertise. In addition, site owners found an automated way to connect with their customers: advertisers. No more email!
  • Audience providers, the so-called DMPs, appeared. These software solutions contained databases of people classified according to different criteria. These databases could be connected to the DSPs, allowing advertisers not only to choose the website on which to display their ad, but also to target advertising to specific audience profiles.
  • The problem of how to measure was solved with the creation of what we know today as AdServer, which monitors the traffic passing through its servers.
• Therefore, to advertise on the Internet we must rely on three main components. Of course, if we analyze in detail, we could design an architecture with dozens of elements, but, for the purposes of this article and in order to reduce barriers on the subject, we will only mention the main elements that represent the dynamics of programmatic buying:
  1. Advertiser/Brand: The company or person who seeks to deliver an advertisement or message to a specific target audience. It is the one who creates, designs or produces the message to be sent through the DSP.
  2. Target audience: This is the group of people identified as suitable to value the value proposition, and therefore, to whom the message will be directed. We can reach this audience by buying data from a DMP or simply selecting the inventory (the place or places where the ads will be shown).
  3. Advertising space: It is the place where the ad will be displayed. It is the place where the target audience will be able to see the ad, determined by multiple factors depending on the technologies involved (the inventory). These spaces cover all the websites connected to the SSP used in each case.

  These three components are present throughout the digital advertising ecosystem, both in what we usually call the programmatic ecosystem and in all-in-one advertising solutions, or walled gardens such as Google Ads, Meta, TikTok Ads, Taboola or Amazon. All of them have a technological architecture that connects brands with audiences within an advertising space.

Ok, but then, where does this differentiation between programmatic and non-programmatic advertising come from?

In the digital marketing industry, programmatic advertising is commonly defined as a set of tools that, when properly interconnected, allow us to build our own DSP + DMP + SSP + AdServer system. This approach involves selecting separate vendors for each component based on the specific objectives of each campaign.

On the other hand, walled gardens solutions are often excluded from the concept of programmatic advertising because they do not allow this level of personalization. For example, platforms such as Meta limit audience targeting to the data embedded in their tools, without the flexibility to use external DMPs.

As we will see below, programmatic advertising can be incredibly powerful when managed by an expert team. It also works very well as a complement to advertising investments in all-in-one platforms or walled gardens.

Programmatic advertising is, without a doubt, a key tool to reach specific audiences in a personalized and efficient way in innovative media. It is based on the buying and selling of advertising space through automated methods using carefully selected data and algorithms. This ensures that ads are shown to the most relevant audiences, maximizing the return on advertising investment. More on this topic soon.

Now that we’ve covered the basics, let’s move on to more complex concepts that will help you better understand what programmatic advertising is. We hope this information brings you a little closer to a world that can sometimes seem unattainable.

Programmatic Advertising Technologies

To achieve this, we will highlight some essential technologies in digital advertising, especially in the programmatic advertising space. These technologies stand out for their custom configurability or for their unique advantages compared to the more restrictive approaches of closed advertising ecosystems, or walled gardens.

 

• Real Time Bidding (RTB) algorithm: is a software or algorithm powered by artificial intelligence or machine learning, which defines when to show an ad, what ad to show, where to show it and to whom to show it. It is a system that will take into account a large number of variables to define the most appropriate way to distribute the ads. Each DSP and SSP communicates taking into account the parameters for
  real time bidding
  . To take it to a very simplistic example, if a brand is willing to pay more for a space than another, that ad will have priority and therefore will be shown first, the cost of showing it will be higher, but the space will be secured. In contrast to this logic, if an ad shows more symptoms of rejection than another by the audience that sees it, that will deprioritize it within that inventory. And in this way the algorithm equation will determine second by second under what conditions and at what price those ads are shown. Each DSP will charge us a fee called Tech Fee, which among other things monetizes the use of this type of algorithms.

• Data Management Platforms (DMPs): allow you to collect, store and analyze audience data in real time, facilitating the targeting of ads to specific users based on their interests, behaviors and demographics. These are platforms that automatically connect to DSP’s and allow us to buy different sets of audiences in order to show them the brand’s ads.

• Demand-Side Platforms (DSPs) and Supply-Side Platforms (SSPs): these platforms facilitate the process of buying and selling online advertising space. DSPs allow advertisers to bid for ad impressions in real time. There they upload their images and videos, set up campaigns according to budget and define the audiences to which they will show those ads. On the other hand, SSPs allow ad space (inventory) owners to maximize their revenue by selling ad impressions in an automated way. They allow, for example, an online newspaper to sell its banner space automatically without the need to talk to an intermediary.

• Ad Exchanges: platforms that facilitate the purchase and sale of advertising inventory in real time through automated auctions. These platforms connect buyers (advertisers) with publishers (ad space owners) and allow the purchase of ad impressions on an individual, audience and contextual basis.

• AdServer: are platforms that can connect to our entire advertising ecosystem allowing us to monitor with a great level of detail what happens with the internet traffic we are paying for, who sees our ads, under what conditions, where they see them, how many times they see them… Among other factors. The AdServer is a complementary tool to the analytics that DSPs usually provide directly. It is a second, unbiased look at what is happening with our advertising investment.

 

Advertisers seek to buy advertising space on platforms called DSPs, and publishers or ad space owners make their inventory available on platforms known as SSPs. Ad Exchange is the platform that will connect the two and allow the purchase of advertising impressions according to the audience segmentation, which will be done through the DMPs. All this, which happens in a matter of seconds, will be possible thanks to technologies such as Machine Learning using DSP’s to do RTB that allow data to be analyzed in real time.

These technologies are not necessarily independent, but work together to optimize the process. For this reason, it is important to have an expert team that is capable of taking full advantage of their benefits.

Many vendors of these technologies offer several of these components in an integrated solution under the same umbrella as we will see below.

Main technologies to consider

There are many vendors for each component of a programmatic advertising strategy. For this reason, we will stop to mention the main technologies that Boomit has used and fully relies on.

Google DV360

That’s right, after everything we talked about above you might be surprised to know that Google not only offers a closed solution, but also a DSP. The truth is that in the world outside the closed solutions there is business, and Google knows how to take advantage of it too, with a very complete solution that also allows connecting to Youtube. You will find in Google a very flexible tool that is connected to the world’s leading SSPs in both a Web and Mobile environment, making a wide variety of ad formats and ad spaces viable.

DV360 is the evolution of the old Google platforms, DoubleClick Bid Manager, Campaign Manager, Studio and Audience Center, offering a comprehensive management of the programmatic environment. Somehow Google always tends to package its solutions even in an environment open to complexity and customization such as Programmatic. Within DV360 we have different SSPs and DMPs with integrated modules for campaigns, audiences, creative, inventory and insights, which collaborate to simplify the entire campaign process, from planning and creative to optimization and measurement of results.

In addition to automating the bidding process and having direct access to a variety of publishers and ad exchange platforms, DV360 has advanced audience targeting capabilities and an integrated creative space to design ads and preview placements.

Amazon Advertising

It is Amazon’s DSP which, in addition to providing access to its inventory within the well-known Amazon Marketplace, works as an integral programmatic solution, offering SSP, DMP and AdServer solutions which are very well positioned worldwide. Amazon Advertising is positioned as a very strong platform in the United States.

Xandr (Microsoft Invest)

Microsoft’s recently acquired platform, now renamed Microsoft Invest, which holds Netflix’s worldwide inventory, is also part of our flagship technologies.

Xandr’s core functionality includes a modern approach to audience targeting and segmentation, overcoming older methods such as cookie-based targeting. It offers multi-device targeting capabilities and buying modes based on ad viewability. Its infrastructure is designed to simplify the way advertising is accessed and optimized, always seeking the most appropriate market price for advertising auctions.

Xandr, DV360 and Amazon Ads have similar general characteristics. All of them allow access to practically the same inventories with the exception of specific agreements such as Youtube’s with Google for obvious reasons, Netflix’s with Microsoft or Amazon’s with its own DSP.

In particular Xandr has allowed us to generate better results when the central objective of the project is to lower the CPM to maximize reach and impressions, but due to the dynamism of the advertising environment it is complex to make a statement beyond our own experience.

Mediamath

Another leading platform that we can mention is Mediamath, which provides similar features to the two mentioned above. In this case we can highlight that Mediamath is a platform that is simple and intuitive to use if we compare it with DV360 and Xandr. This can be an advantage if you want to get into the world of programmatic DSPs and do not have such an expert team.

In contrast to this, the entry barriers to advertise in Mediamath are quite high in terms of minimum investment so if you are not a brand with a high budget to allocate to campaigns you can hardly get access to an account and qualified support directly from the company.

Lotame

This is a platform (DMP) that allows us to collect, organize and activate audience data from multiple sources. Like Mediamath, it is a relatively simple technology to use and they have dedicated support that helps a lot in the management of the purchasing process. The company takes great care with privacy-related aspects, since it is handling personal and device data and must comply with international regulations to the letter.

In addition to using it as a platform in itself, Boomit has generated specific agreements to impact niche audiences within specific inventory sets for a campaign. We have had excellent results on several occasions.

You can find Lotame connected to Google DV360 as well as to Xandr and Mediamath.

 

Magnite

If you are not the owner of the inventory you will hardly use this tool. But we think it is important to mention it because it is one of the reference companies in the SSP field. Magnite has developed all kinds of solutions within the advertising architecture, but one of the strongest is its SSP. At Boomit we have repeatedly connected to the inventory provided by Magnite to maximize the results of the campaigns we implement for our clients. This type of platforms already have native connections with the main DSP’s.

 

Fyber

We could not fail to mention a technology specialized in the Mobile environment. This company develops solutions for mobile application developers to have a place to connect their product and monetize it efficiently. If you have an App and you are willing to show ads to your users, Fyber is one of the leading mobile SSP’s with automated technology that seeks to maximize the revenue per user that you receive in your app.

Additionally, Fyber provides solutions on the DSP side, with an interesting particularity that we at Boomit have used on several occasions, called Offer-wall, which uses a dynamic of incentives for users of different video games to perform actions within an app in exchange for benefits.

Within this same profile of platforms and companies we can mention Ironsource and Tapjoy, technologies also widely used by Boomit’s technical teams for the Mobile Apps ecosystem.

 

Sizmek (by Amazon Advertising)

To finish the description of this set of technologies, we could not fail to mention an ad server, and in this case one of the two that are fighting to take the market next to Google’s (of course).

Sizmek Adserving’s solution allows you to obtain much more in-depth and reliable information regarding:

• Who is seeing your ads.
• Where you are watching
• How long are you watching
• What level of overlap your ads are having across your media distribution
• Reliability of the report delivered directly to you by the platforms.

Opinion of Boomit’s technical team: This tool is for companies that already have a certain maturity in terms of their advertising investments, since it generates an incremental cost in the CPM and for this investment to be profitable we must be investing over USD 150-200 K per month.

Additionally, it is a tool whose configuration and deployment requires significant dedication from the team.

The information it provides is really valuable, especially as it is an impartial arbiter that sits outside that of your DSP, DMP and SSP provider.

Boomit always recommends using Sizmek in cases where the advertising strategy is strongly based on Google ecosystem, and vice versa in case we use an ecosystem with a predominant component of Amazon elements (not so frequent outside the United States).

Here’s how you can add programmatic advertising to your marketing strategy.

 

What does it take to do programmatic advertising?

In order to incorporate this tool effectively, it is necessary to plan it correctly:

1. Specialists in the field: programmatic advertising requires trained personnel to manage and optimize your campaigns effectively. You will need professionals with experience in data analysis, campaign optimization and digital media strategy to make the most of this form of advertising. This experience must be specific to the technologies to be used, i.e. you must have a team with previous experience creating and optimizing advertising campaigns within the DSP you are going to use as well as experience interfacing with the different suppliers that will be selected according to the objective of the campaign and the budget.
2. Clear and achievable objectives: lrogrammatic advertising does not work in all cases. You should make sure that you are well advised in this regard. Don’t get carried away with unrealistic illusions about what you will be able to do with this type of technology. Take care to clearly define what you want to achieve, what level of risk you are willing to take, and based on that ask your technical team to propose a strategy and a specific architecture to achieve the objectives.
3. Access to technology: Most of the platforms we mentioned earlier in this Performance Trend have demanding requirements to be able to start using them. Plan ahead to avoid surprises when a DSP asks for a minimum investment commitment, or a DMP doesn’t provide you with the audience at the CPM you expected. You will need access to specialized platforms and tools, such as Demand-Side Platforms (DSPs), Data Management Platforms (DMPs) and Supply-Side Platforms (SSPs). These tools will allow you to buy and sell advertising inventory in an automated way and optimize the performance of your campaigns.

These are some of the must-haves to make the most of the opportunities offered by programmatic advertising.

Programmatic Advertising advantages, strengths and weaknesses

Below we will tell you about its advantages and also about the weaknesses that should be considered when implementing it in a strategy.

Advantages:

 

1. 
   Flexibility and control:
   the first advantage of programmatic is the flexibility to build your own advertising architecture by custom selecting an audience provider, advertising space and pricing model.
2. Transparency: This type of advertising architectures are usually more transparent since it is possible to control very well each component of the advertising cost that is being paid. Maybe if you’re not currently doing programmatic advertising you don’t know it, but when you pay a certain CPM, that price is made up of multiple sub-prices. This happens on any platform, programmatic or not. The difference is that in programmatic you can know how much you are being charged by your audience provider, who provides the RTB software, the SSP, the DSP and the AdServer. In this way you take control of your costs and can make strategic decisions by removing or substituting suppliers in each of these cost layers.
3. Segmentation accuracy: programmatic advertising allows precise targeting based on demographic and behavioral data, ensuring that ads are shown to the right users, thereby increasing the effectiveness of campaigns and optimizing investment. This is not so different in the non-programmatic world, but what we can highlight in this case is that we have access to niche audiences that are often impossible to access in closed solutions (walled gardens).
4. Cost efficiency: Due to the transparency of cost components, the large scope of inventory and the variety of suppliers, the programmatic ecosystem is less monopolistic. This allows us in many cases to generate advertising strategies at a lower cost but with an equivalent or even greater reach than those of closed solutions.
5. Access to different and high-impact formats: Every year, programmatic advertising providers make enormous efforts to differentiate themselves from closed solutions. One of the aspects that most differentiates them are the formats offered at the ad level. Depending on the DSP you use and the inventory providers, you will be able to access innovative ad formats such as RichMedia, Connected TV, Digital Out of Home, Digital Audio, augmented reality, among others.

Weaknesses:

 

1. Fraud risk: While personalization is an advantage, it is also a risk because we are exposed to making a technical error and neglecting some of the key aspects of an advertising strategy. It is important to work with trusted partners and use third-party verification tools to ensure maximum transparency, visibility and security. This is one of the points in which specialists in the subject will play an important role.
2. 
   Technical complexity:
   Programmatic advertising can be complex and require significant technical knowledge to successfully implement and optimize campaigns, therefore, it will be necessary to consider working with partners or agencies that specialize in the subject.

Programmatic advertising, then, offers a number of significant advantages in terms of automation, innovation, accuracy, efficiency and flexibility, but also presents challenges in terms of transparency and technical complexity.

When is it advisable to add programmatic advertising to your strategy?

Boomit recommends using programmatic advertising in the following cases:

• You need to diversify your media strategy because you have already reached high saturation levels in the current “Walled Garden” channels (Google, Meta and TikTok).
• You have a very strong goal of lowering your CPM and maximizing your reach.
• You need to innovate in terms of ads and advertising space.
• You need a niche audience that you are not finding in your current media mix.
• You need to have more control and transparency over what is happening with your advertising spend.

At Boomit we recommend building a customized strategy for each company and objective. If your business is just starting in the digital world, we help you build your entire marketing and advertising ecosystem, so you can start investing on solid foundations that will allow you to grow profitably.

If, on the other hand, you want to open new markets and don’t know how to do it, we will help you set foot in those geographies and measure the potential for your business.

According to the objectives of your project, our team will identify which programmatic technologies are the most appropriate to achieve them. We will define what DSP, audience, inventory, ad format and technology costs the project will have to ensure its success.

 

The future of programmatic advertising

This advertising modality has undergone a significant evolution in recent years. In 2024, automation in the purchase of advertising space accounted for 80% of total investments in digital media, according to data provided by IAB Spain. Here are some of the trends we expect to see in 2025:

1. Increased customization: As artificial intelligence and machine learning technologies continue to advance, we can expect a greater ability to personalize and segment ads more precisely based on your target audiences. Real Time Bidding promises to be more efficient thanks to more sophisticated Ad Exchanges, capable of processing more information faster.
2. Visual advertising: In the face of a more demanding and saturated audience, visually appealing ads will have a plus to improve brand recognition. Creative teams will be challenged in an environment where we fight for users’ attention on the screen.
3. Integration of data from multiple sources: With changes in so-called first-party and third-party data as well as the proliferation of digital devices and channels, the integration of data from multiple sources will become even more important in programmatic advertising. This will allow advertisers to gain a more complete and holistic view of their audiences and optimize their targeting and personalization strategies.
4. Advances in measurement and attribution: accurate measurement of the impact of programmatic advertising campaigns will continue to be a key area of focus in the future. We expect to see advances in attribution measurement that will allow advertisers to better understand the customer journey and the impact of each touchpoint on the purchase decision.
5. Greater emphasis on transparency and security: transparency and security will continue to be major concerns in the programmatic advertising world. Advertisers and publishers will continue to demand greater visibility and control over where and how ads are displayed, as well as more effective measures to combat ad fraud and protect the brand.
6. Audio and CTV growth: with the rise of online audio content consumption and the rise of connected devices such as smart speakers and smart TVs, we can expect significant growth in programmatic advertising in the audio and connected advertising space. This will open up new opportunities to reach audiences through innovative ad formats and emerging consumer contexts.

Data and statistics on programmatic advertising

It is very interesting to see data on how digital advertising has been gaining strength since the beginning of the Internet and how advertising investment is distributed in the different ways that exist today to advertise.

We recommend being critical with this information, which is extracted from multiple sources, and is often constructed according to metrics inferred from public reports whose variables may have slight differences in equivalence.

In the following graphic extracted from Dentsu’s
insights from Dentsu
we can see how:

• Digital advertising grows dethroning outdoor first in 2006
• Outperforms print advertising in 2014
• And it overtook traditional television in 2017 to continue its breakneck growth.

 

By 2025, it is estimated that digital advertising investment will exceed US$500 billion.

 

Below we can see how these investments
how these investments were distributed in the year 2023
in the year 2023 according to the categorization we have been analyzing in this Boomit Performance Trend.

Of the total worldwide advertising investments, 50% went to the digital environment totaling USD 424.3 Billion. This may surprise you, but the reality is that the digital segment still has a lot of growing to do. With the penetration of mobile devices and the increase in screen time by users, it is estimated that we will continue to see significant growth in the coming years.

Of that subtotal, USD 302 billion went to automated buying, i.e. programmatic buying. And within that subtotal of programmatic buys, USD 237 billion went towards the large closed solutions(Walled Gardens) such as Google, Meta, Pinterest, X, TikTok, etc. This left the open programmatic advertising sector with a total of USD 65.7 billion in 2023.

What this shows is that Walled Gardens dominates the digital advertising market with its all-in-one solutions and the growth of its flagship products:

• Google Search
• Youtube
• TikTok
• Pinterest
• Facebook
• Instagram
• X
• Inter alia

 

If you want to know how this part of the business is distributed among the major industry players we have mentioned, we present this chart based on information published by The Wall Street Journal in 2021. These figures may have varied over the last two years, but it is the closest we could find to this information to complement this report.

Final conclusions on the subject

As we have explained throughout this article, programmatic advertising is a tool that is worth incorporating into your marketing strategy, as it is part of the evolution of digital advertising.

Its main advantage lies in the possibility of creating a customized advertising architecture in terms of audience provider, advertising space and pricing model, which generates a solid ecosystem without relying on large advertising monopolies.

It enables real-time automated operations and detailed targeting, which translates into a more precise impact of your ads and a better return on your investment. In addition, your ads can be shown in innovative media, reaching your target audience in a different way than they are used to seeing your communication.

Although we know that this is a complex architecture that requires extensive knowledge in strategy, data analysis and technology, at Boomit we have a team of specialists in Programmatic Advertising services. Boomit’s Paid Media team can create a customized plan for your business and help you get the best results, making you the next success story.

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