Spending on programmatic advertising is more substantial than it’s ever been. An April report from eMarketer shows that $46 billion will be spent on programmatic advertising this year, meaning that 82.5 percent of digital display ads in the US will be purchased through automated channels. Additionally, the study forecasts that mobile programmatic spending will reach $32.78 billion in 2018, making up 70.4 percent of all programmatic digital display outlays in the US.
Mobile Platforms Growing Fast
The total global advertising spend on mobile is expected to come close to $185 billion by the end of the year, which will lead many advertisers to optimize interactive campaigns for smartphone and tablet devices to attract the attention of users while they’re on the move. Consumers spend about 80 percent of their mobile device time using apps, according to findings from eMarketer, so it’s likely that there will be a marked shift from mobile web to in-app ads sooner rather than later.
A recent PubMatic study found that “mobile private marketplaces monetized impression volume increased by 37 percent year-over-year in Q4 2017,” which continues a growth streak that has been going on for eight consecutive quarters. PubMatic attributes this trend to marketers who are spending more on programmatic advertising while seeking premium, brand-safe spaces at the same time.
The Transparency Problem
Although the Google/Facebook duopoly will likely continue to dominate the industry, players such as Amazon may become major challengers. Additionally, smaller self-serve platforms could grow to compete with them. According to eMarketer’s forecasts, of the nearly $19 billion in additional ad dollars that will be spent on programmatic display space between 2018 and 2020, the majority will go to private setups including private marketplaces and programmatic direct transactions as buyers become increasingly wary of “the open markets’ transparency and quality issues.”
Transparency in programmatic advertising has been a key issue throughout 2017-18, with brands requesting higher levels of safety, visibility and transparency from their ad sources. A study conducted by Truth found that 79 percent of marketers have transparency concerns while 14 percent reportedly didn’t have any such concerns. This indicates that the majority of marketers are looking for “a cleaner supply chain” to help them save time and money.
On the plus side, selling counterfeit inventory is becoming increasingly difficult due to technologies such as blockchain and ads.txt, which enable publishers to publically declare what sellers are authorized to sell from their inventory. At the same time, marketers are becoming more aware of the effectiveness of their programmatic campaigns and the audience that has viewed them—even with GDPR in effect—leading to a greater level of granularity for highly-targeted automated ads.
Bringing Programmatic Tech In-House
More advertisers are developing their own programmatic ad buying solutions to guarantee brand safety and quality. Research from ExchangeWire and IPONWEB, which surveyed 129 professionals from around the world working in programmatic media, shows that 49 percent of all advertising agencies undertake programmatic media buying using their own technology. Thirty-four percent report combining their own technology with that from a third-party while 17 percent rely exclusively on third-party offerings. The report also indicates that agencies in EMEA lead the way with self-reliance, with 58 percent stating that they only use their own technology. In comparison, 56 percent of North American agencies and 33 percent of APAC agencies surveyed said the same.
ANA’s whitepaper from late 2017, The State of Programmatic Media Buying, reports that 85 percent of the 149 members surveyed are currently conducting programmatic initiatives. Of them, 78 percent said that they were either concerned or very concerned about brand saftey issues in programmatic buying. Only 40 percent felt comfortable with the transparency they currently receive, and perhaps as a result, 35 percent of respondents have reduced their use of external agencies in favor of expanding their in-house capabilities for programmatic buying.