The Role of Big Data in Programmatic Advertising

Mar 09, 2023

Data is an incredibly valuable resource for the 21st century, comparable to petroleum. With the rapidly increasing volumes of information and data that are constantly emerging and diverse, it is no longer possible to process them the way it was before. But with big data, we can uncover subtle patterns that humans can’t see and use them to make decisions based on precise algorithms, predictive models, and more.

But what kind of role does big data play in the modern advertising industry? Is it essential to current and all future advertising technologies? Let’s get to the bottom of it.

Table of Contents

What is Big Data and How It is Related to Advertising

Big Data is a general term that describes technologies and different methods for analyzing and processing continuous flows of useful information that are literally enormously big and could not be processed without the help of machines.

To compare, this text consists form approx 130 lines or 1100 words. If we put some big data in one spreadsheet file, it could be billions of lines with data in different formats. For example, it could be data that includes all programmatic advertising deals inside the BidsCube AdExchange and details about them just for one month.

In today’s world, everyone is constantly generating data. It happens by using apps, searching for information through search engines, online shopping, and even simply traveling around cities and countries with your smartphone in your pocket. All this creates a huge amount of valuable and helpful information. Furthermore, it can then be quickly collected, visualized, and carefully analyzed.

To make it easier to understand the essence of Big Data, let’s take a look at a simple example. Imagine a market where all products are arranged in a chaotic order: bread near the vegetables, fruit in the beverage department, vegetable oil next to the bathtub and toiletries, and so on. With Big Data, it became possible to distribute all the goods strictly in their places. But that’s not all. You can easily find the product you want, see expiration dates, learn about the benefits of that brand or variety of products, and compare it with other similar products.

Big Data is also a tool for the effective application of received information. It is presented in a clear and convenient form and makes it easy to solve everyday tasks and make decisions. For example, for advertising campaigns, you need to learn how to find your potential client and offer a particular product at the right time. You can’t do this without a specific database.

Big Data is just beginning to gain momentum in popularity. According to analysts, in 2020, the global big data market has shown a growth rate of 9.13%. And 2021 and 2022 are notable for even more improved performance. And this trend will continue for at least until 2024-2025.

There are three main types of using Big Data that matter in marketing:

  1. Customer data. Consisting of various metrics from different sources, such as transactional and behavioral metrics, as well as attitudinal data. Sources can include online websites, sales points on the Internet, marketing companies, social networks, loyalty programs, customer surveys, and a variety of communities in the online world.
  2. Operational data. Mainly objective indicators measure and reflect the quality of ongoing marketing processes that are directly related to the allocation of resources, different operations, budget control, and asset management.
  3. Financial data. This includes different tools such as profits, sales, revenues, and other essential objective data capable of measuring and displaying the financial condition of the company or organization.

How Big Data Becomes Decision-Changing For Marketers?

In today’s digital advertising landscape, Big Data has the potential to make a significant impact. There are several reasons for this.

Firstly, the key to successful digital marketing is the collection, processing, integration, and analysis of data from various sources (both internal and external). However, the primary challenge is the chaos that comes with about 80% of all data being unstructured. For example, on social networks, there are numerous photos, videos, and text messages that provide insights into user behavior. Yet, traditional methods cannot analyze or structure them. With Big Data, a marketing company can collect, store, process, and analyze all information, including structured and unstructured data, allowing advertisers to access relevant and operative data from seemingly chaotic data sets. This approach enables marketers to make informed decisions and develop effective strategies.

Secondly, real-time information analysis is crucial in today’s fast-paced digital world. Conventional relational databases were the go-to solution for analyzing and managing large amounts of data, but their speed was limited. Even simple tasks took days or weeks to complete and provided outdated results. However, modern analytics platforms powered by Big Data can perform complex processes in moments, providing access to real-time analysis. Marketers can rely on relevant and reliable data to make quick and accurate decisions.

Thirdly, Big Data allows for more personalized and targeted ads. Advertisers can use personal data provided by users, such as likes, geolocation, and store purchases, to create ads that users are interested in.

Finally, Big Data offers opportunities to merge with various components of programmatic ecosystems. For instance:

  • DSPs (demand-side platforms) can predict target audiences or improve existing ad targeting using Big Data capabilities and features.
  • AdExchanges can optimize auctions by utilizing machine learning and artificial intelligence in conjunction with data.
  • SPPs (supply-side platforms) can improve result analysis using algorithms designed for Big Data, driving revenue growth for webmasters.
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Big Data = Big Opportunities

As you can see, big data offers significant opportunities. In addition to the benefits discussed, there are a few other essential additional points, including:

  • Hyper-personalization
  • Predictive capabilities
  • Dynamic creatives
  • Robust attribution models
  • Reduced ad spend
  • Improved cross- and upselling.

However, there are still some challenges associated with effectively using Big Data, particularly in marketing. This is because most applied analytics systems are not aligned with the data, decisions, and processes used by modern marketing organizations.

The three main challenges are:

  1. Knowing what data to collect
  2. Choosing the right tools for analysis
  3. Understanding how to transition from data to insights and impacts.

It is essential not only to analyze and process helpful Big Data but also to use the results correctly.

To Sum Up

Now that you know what Big Data is, what it is for, and where it is used, you can use it as an effective tool to gather information about users and run a profitable advertising campaign. If you are interested in using big data in your promotional or monetized process, please contact us, and we will provide you with the best solution!

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