Sixty-nine percent of brands have taken their programmatic advertising in-house, according to an international report conducted by the Interactive Advertising Bureau (IAB) and Accenture Interactive.
Programmatic’s share of digital ad spend worldwide is poised to grow to 68 percent this year, according to Zenith. That number is likely to further increase as mobile and digital consumption rates soar during the pandemic. In the last five years, programmatic’s share of digital ad spend worldwide has increased 54 percent, with more than two of every three display ad dollars being spent on programmatic.
Programmatic advertising represents 89 percent of digital ad spend in the UK, nearly 85 percent in the US, 80 percent in Europe and 63 percent in Latin America.
Due to programmatic’s scale and efficiency in targeting and placing digital ads, at a time when digital consumption is at an all-time high, more and more brands are in-housing some or all of their programmatic, the survey reveals.
Twenty-one percent of brands have completely brought programmatic in-house while 48 percent have partially done so.
Europe has displayed the strongest desire to move the function in-house. In fact, 74 percent of European organizations have completely or partially shifted programmatic in-house, which is more than organizations in either the US and Latin America.
Thirty-one percent of brands in Europe have fully moved programmatic in-house while 43 percent have partially done so. Whereas 16 percent of brands in Latin America have completely moved programmatic in-house and almost half have partially done so.
In 2018, the European Union issued the General Data Protection Regulation (GDPR). The US followed when in 2020 it debuted the California Consumer Privacy Act (CCPA). While stricter data regulations reduce the number of consumers who can be targeted, those that can be targeted are more interested and relevant, which results in more effective ad spend and a great sense of trust between brand and consumer.
With the demise of cookies looming, a brand’s ability to effectively control programmatic in-house will depend on its ability to obtain and manage its own first-party data.
“It’s an issue of transparency. We had a contract through our agency, but they didn’t have a transparent programmatic offering. Without transparency, we can’t improve ad effectiveness.” one consumer packaged goods executive told IAB.
Bringing the capability in-house has its challenges, including getting buy-in across the company and flexibility in making the shift. Hence why the companies that have taken all or some of their programmatic operations in-house are utilizing a hybrid approach by seeking external support.
The survey also found that digital video ad spend share worldwide is estimated to be 75 percent this year, an eight percent increase from 2019.