Programmatic trading of digital ads continues to rise with 65% of all ad expenditure in 2019 being traded programmatically, according to Zenith Media’s latest Programmatic Marketing Forecasts.
In 2019, advertisers are projected to spend $84 billion programmatically, up from $70 billion in 2018, representing 62% of digital media expenditure.
Meanwhile, the trend is likely to continue to $98 billion in 2020, at which point programmatic will account for 68% of digital media ad spending including mobile, social and video ad formats.
The US leads the largest programmatic market size at $40.6 billion in 2018 or 58% of the global total. China follows in second place at $7.9 billion, followed by the UK at $5.6 billion.
Overall, the US now trades 83% of digital media through programmatic technologies, followed by Canada at 82% of programmatic trading. The UK ranks third at 76% followed by Denmark (75%).
Zenith expects programmatic to account for 80% of digital media across all four markets by 2020.
However, the company added that programmatic adaption was taking slightly longer than expected. Indeed, it has adjusted its forecast for both 2018 and 2019 by 2% (down) and attributed the slowdown in spend to advertisers investing more in infrastructure and data.
“Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions,” said Benoit Cacheux, Zenith’s Global Head of Digital and Innovation. “The scale of operational restructuring to make the most of it is both extensive and expensive, though, and advertisers are spending more carefully while they invest in infrastructure and data and review the quality of media. All programmatic advertisers need a strategy for acquiring the best and most comprehensive data available, and to treat this data as a vital corporate asset.”
Although the use of second-party data is becoming a growing phenomenon, first-party data continues to be the most valuable to advertisers. Third-party data is considered as generally not offering an advantage in the competitive market.
Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence, admits that “technology is making programmatic advertising work harder for brands.” But he added that artificial intelligence was offering ways to improve audience understanding and “optimisation of the trading process.”