Programmatic advertising is set to increase by 31% next year. That’s faster than all other digital channels, according to Zenith’s Programmatic Marketing Forecasts.
Meanwhile, social media is set to grow 25% and online video 20% in 2017 with a large chunk of these ads traded programmatically, across the 41 key advertising markets the report covers.
Mobile programmatic increasing 31% in 2017
The research adds that programmatic is already the top digital display trading method in 2016 and accounts for 51% of expenditure. It is set to rise to 58% in 2017.
Programmatic has long been utilized as a way to reach audiences at a lower cost. Quality hence suffered. Now, it is being used more often in addition to valuable data segments to target individuals that are more receptive towards a brand.
Ad spending traded programmatically has grown from $5bn in 2012 to a whopping $39bn in 2016. That’s an average annual growth of 71%. However, fast growth is usually not sustainable and for 2018, Zenith predicts the market to slow down a little to 28% reaching $64bn.
Right now, the US leads in programmatic at a spend of $24bn. That’s 62% of total programmatic ad spend globally. The UK comes second at $3.3bn and China scores third at a $2.6bn expenditure.
Jonathan Barnard, head of forecasting at Zenith, explains that whilst private marketplaces are likely to continue to grow, open-RTBs are set to decline.
“In almost every market we looked at, the standard open RTB starts off as almost 100% of trading and then falls off. In many markets, it’s less than 50% of deal-making.”
But there’s room to grow. Programmatic makes up 70% of display in the US and the UK, but just 23% in China. Barnard adds:
“There’s still a huge amount of room for growth, especially now that China is the second-largest advertising market in the world. They’ve adopted the technique later, but they’re on the same path. Given that it’s already been trodden on they can probably catch up even quicker.”
Other markets which are showing potential for growth are Australia (27%), Singapore (12%) and Hong Kong (40%). It’s also likely that programmatic will spread to take hold of traditional media such as TV, radio and out-of-home platforms.
Benoit Cacheux, Global Head of Digital & Innovation at Zenith adds:
“Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets. We believe 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.”