Advertisers are using programmatic advertising more and more to reach the right consumers with the right messages. According to the Interactive Advertising Bureau (IAB), more than 80 percent of the nation's marketing expenditure will be spent on programmatic advertising by 2018.

"Advertisers are looking to spend more of their money online in ways that are highly targeted, highly measurable, and deliver a high return," says Tristan Jordan, senior vice president and general manager of revenue solutions for Your Membership, which provides technology services and revenue-generating sales support to associations.

Programmatic advertising ticks all of those boxes, and it's a new way for associations to bring in nondues revenue. But it's not for everyone. Here's a primer on what B2B programmatic advertising is and how an association might use it.

What is B2B Programmatic Advertising?

Simply put, programmatic advertising is automated marketing that helps advertisers reach specific audiences. "The advertiser is saying, 'I want to display my ad to this type of audience and these demographics, and then the ad network is determining—using a real-time bidding platform, typically—where the ad should go," Jordan says.

An ad network or ad exchange is a company that connect advertisers to digital spaces that are looking to host advertisements, he explains. And real-time bidding is basically an algorithm, which says, "bid on the placement of the ad on this website because the user on that website at this particular moment in time meets the criteria of a potential buyer, as defined by the advertiser," Jordan says.

Advertisers are looking to spend more of their money online in ways that are highly targeted, highly measurable, and deliver a high return.—Tristan Jordan, Your Membership

In the past, ad networks have gathered user information based largely on "cookies," which identify websites that users have visited previously, as well as what users have searched for online. This information can be used for a type of programmatic advertising called retargeting. "This is what happens to you when you look at a pair of shoes online, and then those shoes start to follow you around" on different websites or social media feeds, Jordan says.

Retargeting is used a lot in business-to-consumer (B2C) advertising because cookies and search histories provide great insight into a user's interests and consumer habits and enable the system's algorithms to better predict which products the user might buy. Business-to-business (B2B) advertising is a little more difficult since the algorithm has to make conclusions about a user's professional role, based on his or her internet wanderings.

But if advertisers knew users' professions, they might be better able to target the right users—and ultimately, that could yield a higher conversion rate. And that's why associations' member data is so valuable, Jordan says. "It is some of the most accurate and qualified data that defines a set of like-minded professionals."

For instance, using an association's member data—none of which is given to advertisers in any personally identifiable way—a programmatic advertising platform can run an ad campaign across the web, and the ads will only be displayed when the right professional users are visiting a large number of ad exchanges, including in their Facebook feeds.

"Our hope is that because the distribution of the ads is so targeted to exactly the right type of buyer, it's going to convert at a higher rate, and it'll be a more appealing way to spend money," Jordan says of Your Membership's platform. "And the association will be compensated—will generate revenue for impressions—not on its website, but for impressions across the entire web. So, the association is going to get a portion of the money when an impression is made across all these websites and ad exchanges."

A Case in Point

As the American Marketing Association has watched the marketing landscape evolve, it noticed that a lot of the big advertisers were buying into ad networks. Barbara Grobicki, chief alliance officer at AMA, says these advertisers are looking for millions of impressions, a reach that AMA couldn't provide on its own.

Grobicki says AMA was asking questions like "How can we offer some solutions for some of these ad networks and drive additional revenue and profitability for the organization?" Offering a programmatic advertising program of its own was one possible answer, so it partnered with Your Membership to try it out.

"If one of our members or one of our audience members is on the internet, instead of seeing an ad for 1-800 Flowers, they might see an ad from one of our advertisers," Grobicki explains. "So, [users] don't necessarily know that they've been targeted, but the difference with this is that they don't have to visit our website [to see the ad]. It expands the reach of people who are advertising with us."

What result is AMA looking for? "I think success will be finding a new source of revenue," Grobicki says, "allowing us to adapt with the way the market on the digital side is changing."