Programmatic trading has evolved far from its roots of building cheap coverage from remnant inventory. It now often occurs in premium environments, using private deals in which agencies can use their scale and relationship with publishers to ensure their clients ads are displayed in the right place and at the right price.
The key to success is the ability to create unique data sets that deliver unique competitive advantages, usually based on first-party data or data partnerships, and to apply these datasets to tailor brand messages and communicate them at the points most likely to move consumers along the consumer journey. Some agencies are going further by modelling these datasets to optimise their programmatic activity.
We’ve just published the 2017 edition of Zenith’s Programmatic Marketing Forecasts. In it we forecast that two thirds of the world’s digital display advertising (67 per cent) will be traded programmatically by 2019, up from 59 per cent in 2017. We expect that the value of advertising sold programmatically will rise from US$57.5bn in 2017 to US$84.9bn in 2019, growing at an average rate of 21 per cent a year.
Programmatic trading is most advanced in three English-speaking markets: Canada, the US and the UK, where we estimate 81 per cent, 78 per cent and 77 per cent of digital display advertising will be bought programmatically this year respectively. Denmark is in fourth place, with 70 per cent of display being traded programmatically, followed by France, at 63 per cent.
The US is by far the largest programmatic market, valued at US$32.6bn (57 per cent of the global total) in 2017. China comes next, at US$5.3bn. Just 29 per cent of digital display advertising is traded programmatically in China at the moment, so there is scope for plenty of future growth here.
Programmatic techniques are starting to spread from internet advertising to other, more ‘traditional’ media. In most markets this is in the very early stages and too early to forecast, but it is starting to take hold in the US. We estimate that US$5.6bn will be spent programmatically across television, radio, cinema and outdoor in the US this year, representing six per cent of total ad expenditure in these media. By 2019 we expect the total to rise to US$13.0bn, or 13.6 per cent of the total. We will be keeping a close eye on developments in the US as a guide to likely developments in the rest of the world.
Jonathan Barnard is head of forecasting at Zenith.
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