Ad Tech Companies Reap Bulk of Programmatic Payouts
The techno-wizards who made automatic targeting possible took in 55% of programmatic advertising revenues in 2014.
For ad tech, programmatic's a numbers game.
Ad tech companies that push all the buttons to place online ads for brands based on their rules and budgets take 55% of the fees associated with the process, leaving the remaining 45% for publishers. The prospects for ad platforms and exchanges to get even richer are rose, as $10 billion in ads were programmed buys last year, some 20% of the total Web ad revenues.
These statistics come from the Interactive Advertising Bureau's first “IAB Programmatic Revenue Report,” released today. The report verified that the majority (52%) of online display ads, which totaled $19.6 billion last year, were placed programatically.
Other key findings from the IAB study:
- Though display banner ads made up some 80% of programmatic revenue, IAB predicts mobile and video formats will begin claiming larger chunks of budget and inventory.
- Open auctions were involved in some 70% of programmatic buys last year, but shifts to other methods, such as private auctions and unreserved fixed rate, are on the rise.
- Despite programmatic's expanding influence, no industry-wide definition of the term has been adopted.
“Sizing the programmatic market has proven both challenging and illuminating, as we learned more about how that sector moves ads and money,” said Sherrill Mane, SVP of research at IAB. “Once we garner deeper understanding of how things work and where standard definitions and best practices are needed, we will also gain insights into where greater opportunities exist for publishers and advertisers to capitalize on programmatic channels.”