The United States is and will remain the largest programmatic market, with $3.9 billion worth of display-related digital inventory being sold through Real-Time Bidding (RTB) platforms.
With the inclusion of transactions conducted through automated platforms but not through real-time bidding, programmatic in the broader sense used will expand from $4.7bn in 2012 to $7.4bn this year, or an equivalent growth rate of 56%. Of that total, RTB will represent $3.9bn and non-RTB (NRTB) platforms will represent $3.5bn. The value of programmatic transactions will continue to grow by double-digit growth rates to nearly $17bn ($16.9n) by 2017. The share of programmatic spend in US digital media (display-related) transactions, when looking at both RTB and NRTB, will expand from 38% in 2012 to 53% this year and to 83% by 2017.
Desktop display formats (banners and social) represent $5.3bn i.e. 72% of total US programmatic spend in 2013, down from 83% in 2012. Video and mobile (incl. social mobile) are quickly rising from a low base and now represent 9% ($685m) and 19% ($1.4bn), respectively, in 2013. In 2013, 58% of desktop display is traded programmatically, compared to 25% for video and 68% for mobile. By 2017, we expect those proportions to grow to 87%, 69% and 88% respectively.
Programmatic globally: a $12 billion market
For the first time, programmatic trends in the most advanced markets outside of the US, namely: UK, Germany, France, The Netherlands, Australia, Japan, China, Spain is forecasted to have a grow from over $7.5bn in 2012 to over $12.0bn in 2013 (of which 51% is RTB – $6.1bn) and to more than $32.5bn in 2017.
The UK, the Netherlands, Australia and France are the markets where programmatic trading is going to become the most prominent in the short and medium term. The UK and the Netherlands will lead among European markets, with programmatic penetration ratios of 59% and 60%, respectively. France and Australia will follow closely, at 56% and 52% respectively. That proportion will be significantly smaller in Japan (40%), Germany (33%), Spain (31%) and China (23%) where we have identified various obstacles to overcome: strict privacy laws restricting the use of behavioral data, traditional publishers resisting change and a slow to develop ecosystem infrastructure. While Japan and China will be slower to ramp programmatic spend, the total volume will ultimately be bigger than any other overseas market given the much larger size of their digital markets: $4.1 and $3.5bn respectively, by 2017.
Programmatic acceptance driven by industry initiatives
In the last twelve months a numbers of trends and initiatives have emerged driving the acceptance and usage of programmatic techniques. RTB is being used for more premium formats, by more premium publishers and more extensively for branding campaigns. RTB has thus diversified from being seen as a technology that optimizes low-value “remnant” inventory and mostly around Direct Response campaigns. The launch of Facebook Exchange has instantly pumped an enormous amount of impressions into the programmatic ecosystem. Increasingly, brands are unifying programmatic campaigns and cross-referencing campaign tracking data between display and video. Cheap display inventory is being used to identify valued properties on which expensive video inventory can be purchased.
Significant digital media owners such AOL, Yahoo and Microsoft are all in various stages of making a much larger share of their digital inventory available through programmatic methods in the coming months. Just in the last few weeks, AOL announced a programmatic initiative with all major advertising agencies.
RTB techniques will become the dominant way of dealing with non-premium digital formats, while premium formats and branding campaigns will be traded through a mix of RTB and NRTB platforms. Only high-touch, high-value customized formats, sponsorship and “native” advertising (including advertorials) will stay entirely outside the programmatic revolution affecting digital media buying.
Outside digital media, programmatic buying and automation are only starting to affect the advertising value chain. For example, agencies and television media owners are starting to revamp their planning/buying/booking workflows to better integrate data and realize efficiency gains. Most traditional media will be affected, to some extent, in the long term: television, radio, digital out-of-home being first in line.
From: Magna Global
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