Programmatic Advertising 2025. All You Need to Know

Automate all processes, entrust them to programs, check them, and rejoice in the successes. Isn't that a dream? Let's learn everything about programmatic advertising and how it can help improve ad strategy.

Programmatic TV advertising is the automated buying and selling of television ad inventory using data-driven technology. It combines the precision of digital advertising with the reach of traditional television, allowing advertisers to target specific audiences with personalized messages.

In 2024, programmatic advertising across web, mobile, CTV, DOOH, and digital audio reached an estimated $52 billion in the U.S., according to the ANA Programmatic Transparency Benchmark report. CTV accounts for 28% of all programmatic ad spending in 2024, surpassing desktops and closing in on mobile/tablet leads. More than 80% of marketers in the ANA Benchmark study now use CTV, signaling a strong industry shift.

How Programmatic TV Advertising Works?

The main idea of programmatic advertising is to deliver ads to highly targeted audiences.

Programmatic Advertising Tools

So, let's talk about what tools a marketer uses when running a programmatic ad campaign. The two main platforms worth mentioning here are - Demand Side Platform (DSP) and Supply-Side Platform (SSP). The main difference between these platforms is that DSP is a media buyer's or advertiser's tool. On the other side of the media landscape, media sellers or publishers - use SSP. So, the main goal of an advertiser is to buy ad impressions at the lowest prices (and, at the same time, to get the maximum conversions, not just cheap impressions). On the other hand, SSP's main goal is to get the best offer (the one with the highest price proposition) for ad impressions.

Key Steps in Programmatic TV Advertising

The process of running programmatic advertising is simple for media buyers and marketers. They need to choose the platform that is going to be used to run such a campaign. Almost all platforms use typical algorithms.

Data Collection and Audience Segmentation

Detailed profiles are crucial because, before starting to run an ad, marketers should find an audience that will be interested in a product or service. So, the first step is to collect data from various sources, including viewer demographics, interests, and viewing habits. Based on these data, marketers can segment the audiences.

Ad Buying Methods

There are a few buying methods:

• Real-Time Bidding (RTB): Advertisers bid for ad inventory in real-time auctions to secure spots
• Programmatic Direct: Advertiser agrees to buy a certain amount of inventory for a fixed price. This guarantees the advertiser access to premium inventory and the publisher a certain amount of revenue.
• Audience-Based Buys: Targeting specific audiences across multiple platforms.
• Private Marketplaces (PMPs): This is an invite-only marketplace where a publisher invites specific advertisers to bid on their inventory. The auction mechanics are similar to the open auction, but there is less competition because only the invited advertisers can bid.
• Open Auction (or Open Marketplace): The cheapest option. Any advertiser can bid on the ad inventory that a publisher has made available in the open auction. Bidding is done in real-time, and the highest bid wins. This type of deal is fully automated and operates on a large scale.

It is also worth mentioning that PMP's share in 2024 was 66% of programmatic ad spending, up from just 41% in 2023. The average PMP CPM for CTV was $15.00, while Open Marketplace (OMP) CTV is just $5.54, indicating a market shift toward premium inventory

Ad Delivery

After the ad-buying method is chosen, an auction takes place; SSP decides the winner and displays the ad on the TV screen.

Measurement and Optimization

Marketers track ad performance using metrics like impressions, clicks, conversions, etc. Campaigns can be optimized in real-time based on collected data to improve ad effectiveness.

Pixel Tracking and Attribution

Pixels (1x1 pixel image trackers) are embedded in websites to capture user actions after ad exposure. In OTT attribution, pixel data is matched with ad server data to measure:

• Conversions
• On-site behaviors
• Funnel performance

This pixel data, when timestamped and paired with IP info, enables accurate CTV attribution — even without cookies.

Optimization Best Practices

There's no one-size-fits-all for campaign optimization. However, some best practices include:

• Focus on a single KPI (e.g., conversions, site visits)
• Wait at least 1–2 weeks before making changes.
• Use automated optimization algorithms but validate decisions.
• Avoid cutting large amounts of inventory too quickly — test before eliminating
• Balance performance with branding needs (e.g., performance may say Bravo, but the brand may say no)

Benefits of Programmatic Advertising

The main benefit of programmatic ads - is the automation of the processes, which means that the speed of the process is higher. However, there are other advantages for marketers who use automation:

Data-Driven Targeting

Audience segments are created on the base of demographic, geographic, and behavioral data to ensure that ads are delivered to viewers who are more likely to be interested in the brand's product or service.

Personalization

Programmatic advertising allows for the customization of ad creative based on targeted customer segments so that messages can be more personalized.

Real-Time Bidding

It helps advertisers optimize budgets by bidding only on high-value ad spots, leading to better ROI.

Multiple Platforms

Brands can reach audiences across various channels and platforms simultaneously.

Local and National Reach

Advertisers can interact with local and national broadcasts, offering a massive reach.

Real-Time Analytics

Real-time data and analytics make it easier to track campaign performance and improve on the fly for better outcomes.

Disadvantages of Programmatic Advertising for TV

High Cost and Complex Setup

Programmatic TV is often more expensive than traditional due to the detailed audience segmentation, data analysis required and complexity of the workflow which has many vendors in the flow. The need for precise targeting and data-driven strategies can increase setup costs.

Data Quality Issues

Programmatic TV data may not always be accurate or up-to-date, which can affect targeting effectiveness. It also can be challenging to determine the origin of the data and whether it accurately represents the target audience.

Network Adoption and Inventory

Some TV networks are hesitant to adopt programmatic models. The quality of available ad inventory can vary, and not all networks offer programmatic options.

Lack of Transparency and Control

Advertisers may not always know where their ads will appear, which can lead to brand safety issues. Ads can be placed alongside inappropriate or offensive content, which can harm brand reputation.

Inventory Transparency

70% of all CTV ad spend is concentrated in just 20 domains/apps (e.g., Disney, Hulu, Roku), often transacted via Deal IDs, emphasizing limited inventory concentration and the need for due diligence.

Ad Fraud

There is a risk of ad fraud affecting campaign effectiveness. Advertisers can get reports with fake impressions or misrepresent ad delivery on CTV platforms.

The ANA study found that 15% of ad spending in 2023 went to Made-for-Advertising (MFA) sites. That number dropped to 6.2% in 2024, but some marketers still spent 25%+ on MFA — highlighting the continued need for vigilance.

How Much Does Programmatic Advertising Cost?

The same as all other types of TV ads, the cost of programmatic advertising could be different.

According to the ANA report, only 43.9 cents of every dollar entering a DSP reaches the consumer — an improvement from 36 cents in 2023, thanks to better supply chain transparency and reduced waste.

In 2024, the average CPM across all programmatic media rose to $5.82, up from $2.23 in 2023 —driven by rising CTV investments and shifts toward premium PMP deals.

Specifically:

• CTV PMP CPM: $15.00
• CTV OMP CPM: $5.54
• Average CTV DSP fees: 8.78%

The biggest mistake many advertisers make is focusing on quantity over quality. A more effective strategy is to shift attention from CPM to real value. Cheap CPMs can be deceptively expensive — if impressions don't drive meaningful outcomes, they're wasted spend. Low-cost impressions that fail to perform ultimately increase the total cost per action. That's why working with a trusted partner backed by a proven track record is essential.

The most successful approach centers on tangible results — driving ROI, acquiring new customers, and strengthening loyalty among existing ones.