In the early 2000s, digital advertising was booming on the open web, largely powered by banners, sponsorships, and direct deals between advertisers and publishers. In that context, a new way of buying ad space emerged: programmatic advertising. Automated, data-driven, and real-time, it promised greater efficiency and better returns. However, its adoption was gradual and not without challenges.
Before diving into how it evolved, let’s take a step back and explain what programmatic advertising actually is—and how media buying worked before it came along.
Traditionally, digital ads were bought manually. In this direct model, advertisers—or their agencies—negotiated one-on-one with publishers to agree on campaign details: volume, dates, pricing, objectives, formats, and more. Once the deal was set, the publisher’s Ad Ops team would manually activate the campaign. Prices were fixed and predetermined, with no room for mid-flight adjustments. While programmatic has revolutionized much of the ecosystem, direct buying still exists.
Programmatic automates most of this process through tech platforms that allow real-time buying and selling of ad inventory. At a high level, here is how it works:
Publishers (including websites, apps, and streaming platforms) manage their inventory through Supply Side Platforms (SSPs), where they can define parameters such as minimum prices (floor prices) by format and placement. On the other side, advertisers and agencies use Demand Side Platforms (DSPs) to access this inventory, setting their own criteria based on audience segments, context, and maximum bid price.
These two sides meet in an Ad Exchange—a centralized marketplace where real-time auctions take place in milliseconds for each impression. The system operates primarily on a CPM (cost per thousand impressions) model, though some SSPs may offer alternative pricing structures. This introduces dynamic pricing, where the final value of each impression is determined by live demand. While there are programmatic formats that involve pre-agreed terms—such as Private Deals or Programmatic Guaranteed—the core of the model lies in open auction logic, which enables both buyers and sellers to optimize performance and revenue.
When the first ad exchanges and buying/selling platforms (DSPs and SSPs) launched, the industry was not quite ready. Many advertisers did not trust the new tech or understand how this automated process worked. Concerns around transparency, ad fraud, brand safety, and a growing number of intermediaries led to widespread skepticism.
The hesitation was not limited to advertisers. Media agencies often lacked the technical talent to manage these platforms, and publishers feared losing control of their inventory. Many sales teams saw programmatic as a threat to their roles, not an opportunity.
To make things harder, the ecosystem was fragmented and full of acronyms: DSPs, SSPs, DMPs... each using its own language and standards. Still, the potential upside was hard to ignore.
As the industry matured, standards like OpenRTB (and later, OpenRTB 2.6 – you can learn more about OpenRTB and OpenRTB 2.6 in this article) helped unify the landscape. Tech giants like Google DV360, The Trade Desk, Xandr, and MediaMath emerged, and the whole ecosystem became more professionalized.
Automation started delivering real benefits: operational efficiency, data-driven targeting, real-time optimization, and access to valuable audiences. The rise of first-party data, improved contextual targeting, and the development of private marketplaces (PMPs) gave advertisers more control and allowed publishers to offer safer, high-quality environments.
At first, programmatic was seen mostly as a performance channel—ideal for direct response campaigns with clear KPIs like CTR, CPA, and conversions. Often, programmatic inventory was just the "leftovers" from direct deals. This reinforced the perception of it being a low-quality option, useful for specific goals but not for building brands.
But that perception changed. As inventory quality improved, premium video formats became available, and brand-safe environments could be accessed through PMPs and Programmatic Guaranteed deals, programmatic became a legitimate branding channel. Major advertisers began shifting their brand budgets to programmatic, drawn by the promise of combining massive reach with efficiency and precision. According to IAB Europe, more than 80% of marketers in Europe now say programmatic is their main method for buying digital media. GroupM even predicts that programmatic will account for 90% of all display ad spend in the U.S., U.K., and Australia within the next two years. In short: programmatic has gone from tactical tool to strategic default.
This widespread adoption of programmatic in display and video laid the groundwork for its expansion into a traditionally slower-moving channel: television.
While programmatic was conquering display and online video, television was undergoing its own transformation: the rise of Connected TV (CTV), streaming services, and AVOD/FAST models.
At first, traditional TV players were reluctant to open their premium inventory to programmatic platforms. Direct sales remained the norm. However, changes in user behavior (more on-demand consumption, less linearity) and the need to scale ad revenue drove gradual adoption.
According to eMarketer: “Programmatic advertising will account for 84.2% of the $32.09 billion going toward US CTV video ad spend in 2025, per our forecast.”
The main drivers of this rapid adoption have been:
Forecasts suggest that, in the coming years, the line between direct and programmatic buying will continue to blur.
The evolution of programmatic advertising has not just transformed how media is bought—it has reshaped the relationship between advertisers, agencies, publishers, and technology. What began as a tool for handling remnant inventory or performance campaigns now underpins most strategic decisions in digital investment.
In this new landscape, connected TV is no longer an exception but a natural extension of the automated model. CTV inherits the best of both worlds: the emotional power of video on the big screen and the precision, agility, and scalability of the digital environment.
Significant challenges remain—measurement, fraud, interoperability—but the path is clear. Programmatic is not a trend in development; it is the operational backbone of how the industry works today.
And understanding how it works, its opportunities, and its limits will be essential for any player looking to stay relevant in the media and advertising world.
At tvads we has a professional team able to advise you on this field and and guide you in any area of your streaming advertising business, advising you or even operating it on your behalf if necessary
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