Programmatic advertising accounts for over 90% of US digital display ad spending, automating the buying and selling of ad inventory through real-time technology. As the programmatic landscape matures, spending is shifting toward private marketplaces, AI-powered optimization tools are reshaping campaign execution, and competitive pressure among demand-side platforms is intensifying. This FAQ covers the fundamentals of programmatic advertising and the trends shaping the market in 2026.

What is programmatic advertising?

Programmatic advertising refers to any ad that is transacted or fulfilled through automation, where technology handles decision-making in the ad serving process without requiring a manual insertion order. The term encompasses over 90% of US digital display ad spending, according to EMARKETER's Programmatic Advertising Explainer.

What distinguishes programmatic from traditional ad buying is the elimination of manual negotiation. Advertisers and publishers connect through technology platforms that match supply and demand in milliseconds, allowing campaigns to scale across millions of placements. Programmatic transactions occur across display, video, connected TV (CTV), digital audio, and digital out-of-home (DOOH) inventory.

US programmatic digital display ad spending is projected to exceed $180 billion in 2025, representing approximately 92% of total digital display ad spending, according to EMARKETER.

How does programmatic advertising work?

Programmatic advertising connects advertisers with publishers through a real-time auction process. When a user loads a webpage or app, an ad impression becomes available. The publisher's supply-side platform (SSP) sends a bid request containing information about the impression, including the domain, ad specifications, and available user data. Demand-side platforms (DSPs) evaluate this information and submit bids on behalf of advertisers within milliseconds.

The winning bid is selected based on price and any existing priority agreements. The advertiser's ad server then delivers the creative to the user's device. Header bidding, a practice that runs auctions across multiple demand sources before calling the publisher's ad server, has become standard for desktop and mobile web, helping publishers maximize revenue by exposing inventory to more buyers simultaneously.

Two service models exist: managed service, where vendors handle campaign setup and optimization, and self-service, where advertisers control execution through dashboards and tooling.

What are the types of programmatic advertising transactions?

Programmatic transactions fall into two main categories: programmatic direct and real-time bidding (RTB).

• Programmatic direct involves a single seller and buyer with predetermined pricing. Programmatic guaranteed transactions commit to both price and inventory volume. Preferred deals specify price but not guaranteed inventory.
• Real-time bidding involves auctions occurring as impressions load. Private marketplaces (PMPs) are invite-only auctions where publishers offer inventory to select advertisers. The open exchange is accessible to all buyers and sellers.

More than 91% of total US programmatic display ad spending flows through PMPs and programmatic direct, according to Basis Technologies. PMP spending is expected to grow nearly 13% in 2025, while open exchange spending grows approximately 3%. This shift reflects advertisers' prioritization of inventory quality, brand safety, and measurement transparency over bid-price savings.

What is programmatic display advertising?

Programmatic display advertising is the automated buying and selling of banner ads, rich media, and other visual ad formats across websites and apps. Display represents the original programmatic format and remains the foundation of the programmatic ecosystem.

Display inventory spans standard IAB ad sizes, native placements that match surrounding content, and rich media units with interactive elements. Programmatic display ads appear across publisher websites, within mobile apps, and on social media platforms operating as walled gardens.

Video has overtaken non-video display in programmatic spending. US programmatic video ad spend surpassed non-video for the first time in 2022 and continues to grow faster, driven by CTV, mobile video, and social platforms like TikTok, according to EMARKETER.

Why is programmatic spending shifting to private marketplaces?

Four factors are driving the migration from open exchanges to private marketplaces:

• Inventory quality assurance. PMPs allow publishers to package premium inventory for select advertisers, reducing exposure to low-quality placements and made-for-advertising (MFA) sites. An estimated $770 million in programmatic ad spend went to MFA publishers in Q2 2025, per Pixalate.
• Brand safety protection. Private environments insulate advertisers from appearing alongside inappropriate content, a persistent concern in open auctions.
• Measurement transparency. PMPs offer clearer visibility into where ads run and how they perform, addressing advertiser demands for supply chain accountability.
• Buyer-seller relationships. Direct deals preserve partnerships between advertisers and publishers, enabling collaboration on targeting, creative, and performance optimization.

The growth of programmatic CTV also contributes to PMP expansion, as most CTV inventory transacts through programmatic direct and private marketplace deals rather than open auctions.

What challenges do marketers face with programmatic advertising?

Despite its scale, programmatic advertising presents persistent obstacles:

• Ad fraud and waste. Global ad fraud losses are projected to reach $41.4 billion in 2025, according to Spider Labs. MFA websites, which mass-produce low-quality content to capture ad revenue, continue to siphon spending from legitimate publishers.
• Supply chain opacity. The Association of National Advertisers has reported that only 43.9% of programmatic ad spend actually reaches consumers, with intermediary fees consuming the remainder.
• Platform fragmentation. Each DSP, SSP, and walled garden operates with different interfaces, measurement standards, and data formats, requiring significant operational overhead to manage campaigns across partners.
• Identity and targeting uncertainty. Although Google reversed its plan to deprecate third-party cookies in Chrome in April 2025, Safari and Firefox blocked third-party cookies years ago. Advertisers still face signal loss across browsers and must invest in first-party data strategies.

How is AI changing programmatic advertising in 2026?

AI is reshaping programmatic operations from bidding to creative production. Video advertisers report using AI for content creation (60%), creative performance analysis (43%), audience insights (42%), and dynamic creative optimization (40%), according to Teads and MMA Global research cited by EMARKETER.

DSPs are deploying AI-powered bidding systems that analyze historical behavior, purchase intent signals, and real-time engagement patterns to predict which impressions will drive conversions. The Trade Desk's Kokai platform and Amazon DSP both center AI optimization in their value propositions.

On the sell side, NBCUniversal launched AI-powered contextual targeting tools in December 2025 that scan live and on-demand content to match ads with relevant moments. CTV measurement is improving as AI consolidates campaign data across platforms for holistic analysis.

The downside: generative AI enables mass production of MFA content, creating new brand safety risks as low-quality sites exploit programmatic algorithms optimizing for viewability metrics.

How should marketers evaluate programmatic advertising partners in 2026?

Due diligence should address four areas:

1. Fee transparency. DSP take rates vary widely. Amazon DSP charges 0% for programmatic guaranteed deals on its owned media and 1% on open-web buys; The Trade Desk's take rate is estimated at approximately 20%, according to EMARKETER. Understand what percentage of spend reaches publishers versus intermediaries.
2. Supply path quality. Ask which inventory sources the DSP accesses, how MFA sites are filtered, and what brand safety controls are standard. Request verification reporting from partners like DoubleVerify or Integral Ad Science.
3. Measurement capabilities. Evaluate whether the platform supports holdout testing, incrementality measurement, and cross-channel attribution. Siloed reporting limits optimization.
4. AI and workflow stability. DSP interfaces and algorithms evolve rapidly. TTD's migration from Solimar to Kokai caused execution issues for some agencies in late 2025. Verify platform readiness and QA processes before committing budgets.

Consider diversifying across multiple DSPs rather than centralizing on a single platform to maintain leverage and reduce switching risk.

We prepared this article with the assistance of generative AI tools and stand behind its accuracy, quality, and originality.

EMARKETER forecast data was current at publication and may have changed. EMARKETER clients have access to up-to-date forecast data. To explore EMARKETER solutions, click here.