Programmatic advertising accounts for more than half of digital ad spend
Michelle Clancy
| 30 September 2014
Programmatic advertising is on the rise in a big way, with the latest tracking study from Interpublic's Mediabrands' Magna Global unit noting that close to half of digital media buys are now in such form.

Globally, programmatic spend will grow to 42% of total display-related spend this year (2014), compared to 33% last year, and to 48% of total spend on a global basis next year (2015).

Further, the sector will expand at an annual rate of 27% over the next four years, reaching $53 billion of global ad spending in 2018, up from $21 billion globally this year, of which $9.3 billion will be transacted through real-time bidding (RTB) methods.

The main drivers behind this growth will include the opportunity to reduce transaction costs on both the buying and selling side, the opportunity to monetise a broader spectrum of digital media impressions and the opportunity to leverage consumer data at scale to improve the efficiency of ad campaigns, the firm said.

The pace of programmatic adoption varies by country, by format and by platform. Among the formats analysed by Magna, social inventory is already predominantly traded programmatically. Display and video, starting from a much lower level today, will reach adoption rates of 54% and 43% respectively by 2018.

The US is leading the global adoption of programmatic: with $10.9 billion worth of transactions in 2014, the US represents 53% of the global programmatic market (58% of the global RTB market).

"By 2018, only the most premium digital inventory (sponsorship, full episode video, non-standard formats) will still be transacted through traditional mechanisms," the Magna report said, adding: "In the last 18 months, adoption has been boosted by increased usage by large verticals (such as consumer packaged goods, automotive and pharmaceuticals) and direct-response verticals (such as real estate, dating, gaming, and education). That large vertical usage was made possible by the availability of new tools allowing marketers to measure and benchmark the impact and efficiency of programmatic campaigns on branding goals (and not just immediate conversion)."