Programmatic advertising spending to top $10BN in 2014
Michelle Clancy
| 18 October 2014
The term “programmatic” advertising seems to be everywhere, and no wonder: According to new figures from eMarketer, US programmatic digital display ad spending will grow 137.1% to eclipse $10 billion this year.

This would account for 45.0% of the US digital display advertising market and 2014 has seen the most dramatic growth and expansion in programmatic advertising to date. eMarketer expects significant increases ahead thanks to the build-out of private marketplaces and programmatic direct deals, as well as continued maturation in both mobile and video advertising. We expect spending to increase another 47.9% next year and to double this year’s total by 2016, when it will reach $20.41 billion, or 63.0% of US digital display ad spending.

“Programmatic advertising has gotten a lot of hype in the past 12 to 24 months, but it’s finally fair to say that today, holdouts on participation are proving the exception, not the norm,” said Lauren Fisher, analyst for eMarketer. “2014 has proven a pivotal year, and with the majority of infrastructure now laid and testing well in progress, we’ll see programmatic ad spending explode from 2015 into 2016.”

As with other digital advertising, much of the growth is coming via the mobile channel. This year, mobile will account for 44.1% of all US programmatic display ad spending, or $4.44 billion. eMarketer projects that mobile will surpass desktop as early as next year, taking 56.2% of all programmatic ad expenditure. This trend is consistent with the digital display ad market overall, which has shifted to mobile rapidly.

Programmatic ads are purchased via two main methods: real-time bidding (RTB) and programmatic direct. Growth is currently driven by RTB—the auction-based approach to programmatic advertising in which digital display ads are transacted in real time, at the impression level. This year, RTB will remain the dominant transaction method, accounting for 92.0% of programmatic ad dollars, or $9.25 billion.

“Today, publishers largely guard high-value ad inventory such as TV and premium digital video content, though we expect a greater number of ads sold programmatically in these formats starting in 2015,” said Fisher. “Those who do decide to turn to programmatic, however, are likely to do so via programmatic direct, where they can still secure inventory guarantees.” inShare4