Programmatic ads to grow 31% in 2017, ahead of all other channels: Zenith

Programmatic advertising will grow 31 per cent in 2017, faster than all other digital channels, according to Zenith’s Programmatic Marketing Forecasts. This report, which covers 41 key advertising markets, estimates that programmatic will grow comfortably faster than social media (which will grow 25 per cent) and online video (20 per cent) – and a growing proportion of these other channels will be traded programmatically. Programmatic will become the principal method of trading digital display this year, accounting for 51 per cent of expenditure, and will rise to 58 per cent of expenditure in 2017. 

At first, programmatic marketing was often used to reach target audiences as cheaply as possible, with little regard for the quality of the sites in which the ads appeared. It is now being used in conjunction with valuable data segments to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages and encouraging them along the path to purchase, often in premium environments. 

Programmatic advertising has risen to dominate the digital display market in just a few years, having accounted for just 13 per cent of display ad spend in 2012. Programmatic ad spend grew from $5 billion in 2012 to $39 billion in 2016, at an average rate of 71 per cent a year. Its growth is slowing down as it consolidates its dominance of the display market, but programmatic advertising is expected to grow at an average of 28 per cent a year to 2018, when it will reach $64 billion. 

The US is the biggest programmatic ad market by a long distance, worth $24.0 billion in 2016 and accounting for 62 per cent of total global programmatic ad spend. The UK comes a distant second, worth $3.3 billion, and China third, worth $2.6 billion. Programmatic trading accounts for 70 per cent of display in the US and the UK, but only 23 per cent in China, so there is plenty room for rapid growth in China. 

The figures in this report refer only to digital media, but programmatic trading is starting to spread into the ‘traditional’ media. Some television, radio and digital out-of-home platforms already offer automated and data-driven trading of inventory. It will take years, but eventually programmatic trading will be available as standard across traditional media. 

“Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets,” said Benoit Cacheux, Global Head of Digital & Innovation at Zenith. “We believe that the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments – especially private market places – and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”


News in the domain of Advertising, Marketing, Media and Business of Entertainment

More in Media