Innovation 2015 chapter extract: Get on the programmatic train or get run over by it

There is no shortage of superlatives when it comes to programmatic advertising. To be sure, there are still hurdles to be cleared, such as viewability, lack of understanding,fraudulent views and sites, inventory quality, technological complexity, and concerns about transparency (what am I buying, where, from whom, and at what price?).

But programmatic growth is projected to be dramatic. And indeed it was: By the end of 2014, it looked like almost 50 per cent of US digital display advertising would be programmatic, a growth rate of nearly 140 per cent, to more than US$10 billion, according to eMarketer.

At Forbes, for example, programmatic revenue has doubled two years in a row, reaching 30 per cent of the publishers’ revenue, according to Folio. The financial numbers are impressive, but even more so is the growing adoption of programmatic by the key players in the field: publishers, marketers, and agencies.

A 2014 AdExchanger survey of publishers, marketers, and agencies found that more than a quarter manage a minimum of 60 per cent of their digital media programmatically. And two-thirds plan to manage at least 40 per cent programmatically within a year. Agencies are way ahead of the others, with more than 25 per cent managing a stunning 80 per cent of their media programmatically.

In a survey of 25 brands, 96 agencies and 56 publishers, AOL discovered that three-quarters of advertisers are using programmatic to buy display ads and roughly half use it to buy both mobile ads and video ads. Only eight per cent are not using programmatic at all.

Looking ahead, almost 90 per cent of brands and advertisers plan to increase their video and display spending by as much as 50 per cent, according to AOL. Advertisers plan to increase their use of programmatic display by nearly 60 per cent, the study found.

Innovation in Magazine Media 2015-2016 World Report is published by FIPP and produced by INNOVATION Media Consulting. The authors are John Wilpers, senior director/US and Juan Senor, partner, INNOVATION Media Consulting.

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