Ecstatic Over Programmatic

Digital display advertising bought programmatically will increase by 137% this year over 2013 and nearly double its share of spending in the display ad marketplace, according to a study released today by eMarketer. In a mere three years it will go from a quarter (24%) of total spend to nearly three quarters (63%), the research company determined after analyzing data from several sources and interviewing some 50 agency, brand, publishing, and tech executives.

“What’s behind the trend from a marketer’s standpoint is the desire to have a better view of the data and use it to make smarter advertising decisions,” says eMarketer analyst Lauren Fisher. “Cost efficiency plays a role, too, but longer term, it’s about using data to your advantage.”

Mobile’s ascension to a starring role in the marketing drama has pumped up programmatic’s growth, as well. “Major players like Google and Facebook are trending toward mobile and, in turn, toward programmatic,” Fisher observes.

The numbers projected by eMarketer are jaw-dropping. From $4.24 billion last year, the research firm sees programmatic buys increasing to around $10 billion this year, $15 billion next year, and $20 billion in 2016.

This turning of the tables on traditional buying will be mirrored by a flip-flopping of channels most served by programmatic. In 2013, 69% of programmatic buys were for desktop ads. In 2016, 69% of programmatic buys will be mobile ads. Last year, programmatic buys for mobile amounted to $1.3 billion. That will skyrocket to $14 billion in three years.

More premium publishers figure to hop on the programmatic bullet train in the coming years. This year, eMarketer figures real-time-bidding (RTB) auctions to account for nine out of 10 buys, but sees that declining to only six of 10 by 2016, with programmatic direct purchases picking up the slack. “That will partly be driven by the broader desire of advertisers to automate the entire sales process,” Fisher says. “But they will do more programmatic guaranteed buys with publishers, locking into a specified amount of inventory.”

The programmatic trend will also extend to video purchases. A mere $200 million worth of video inventory was purchased programmatically in 2013. That figure will grow a at 200% rate over the next two years, eMarketer forcecasts, and hit nearly $4 billion in 2016.

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