It has been claimed that both agencies and clients are clueless about programmatic advertising but someone out there must know something after a new study claimed almost half of online display ads in 2014 – worth just under £1bn – were bought by a machine.
According to the study, carried out by MTM for the Internet Advertising Bureau UK, of the £2.13bn spent on display ads across the Internet and mobile in 2014, 45% (£960m) was traded programmatically – up from 28% in 2013.
‘Programmatic’ – which refers to ads bought and sold using automated systems and processes such as real-time bidding – was narrowly behind direct sales between publishers and buyers (49% share of display ad sales). Only 6% were bought through ad networks (down from 22%).
Programmatic’s share of mobile ad sales has nearly doubled from 37% in 2013 to 64% in 2014, while nearly one-fifth (18%) of video ads are now traded programmatically.
“Programmatic’s role in digital ad buying has grown from virtually zero to nearly half of all transactions in just five years,” said Tim Elkington, chief strategy officer at the IAB. “However, the impact on mobile has been even greater due to its more fragmented ecosystem providing a ripe breeding ground for intermediaries.”
“Some still consider programmatic primarily as a direct-response tool. However, its increasing role in video ads – a branding medium like TV – shows programmatic is on advertising’s top table,” notes Elkington. “Consequently, due to the rise in mobile and video ad spend, we estimate around 70-80% of all digital spend will be programmatic by 2018.”
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