The Drum reports that programmatic advertising is set to increase 31 percent in 2017. Does that mean we can already crown programmatic as the advertising king of next year?
In a new report, Programmatic Marketing Forecasts, a media agency “estimates that programmatic will grow comfortably faster than social media (which will grow 25%) and online video (20%) – and a growing proportion of these other channels will be traded programmatically. Programmatic will become the principal method of trading digital display this year, accounting for 51% of expenditure, and will rise to 58% of expenditure in 2017.”
Programmatic previously was “used to reach target audiences as cheaply as possible, with little regard for the quality of the sites in which the ads appeared.”
Importantly, “it is now being used in conjunction with valuable data segments to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages and encouraging them along the path to purchase, often in premium environments.”
Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets. It is believed that the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments – especially private market places – and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”
How big is programmatic?
Programmatic advertising has risen to dominate the digital display market in just a few years, having accounted for just 13% of display adspend in 2012. Programmatic ad spend grew from US$5bn in 2012 to US$39bn in 2016, at an average rate of 71% a year. Its growth is slowing down as it consolidates its dominance of the display market, but we expect programmatic advertising to grow at an average of 28% a year to 2018, when it will reach US$64bn.
Regionally, itt is reported that “the US is the biggest programmatic advertising market by a long distance, worth US$24.0bn in 2016 and accounting for 62% of total global programmatic adspend. The UK comes a distant second, worth US$3.3bn, and China third, worth US$2.6bn. Programmatic trading accounts for 70% of display in the US and the UK, but only 23% in China, so there is plenty room for rapid growth in China.”