Global programmatic advertising will grow by more than $13 million next year and the year after, but its growth rate has stalled and it’s making slower-than-expected headway in taking share from non-programmatic media, according to Zenith’s 2018 Programmatic Marketing Forecast published Monday.
Programmatic display advertising will clear $70.2 million this year, according to the report, $13.7 million more than last year. But next year’s forecasted growth of $13.6 million is relatively lackluster, considering the expected momentum behind programmatic.
Zenith was once cautiously optimistic that, by the end of its five-year forecast, digital display advertising in many markets would be entirely programmatic, said Jonathan Bernard, the company’s head of forecasting. But now only Canada could feasibly be fully programmatic and Zenith is walking back its growth forecast for programmatic’s share of digital.
Data, infrastructure and other peripheral considerations like brand safety, viewability and ad verification increase costs associated with buying online media – but that money isn’t going to ads. Hence, the slowdown in actual programmatic media spend, Bernard said.
While it’s more difficult to accurately measure these additional costs compared to surveying ad spend, Bernard believes they will be important for media mix reviews, because they make programmatic activations more effective.
“It can be quite expensive and a major overhaul for a marketer to reorganize internal business practices and to make sure there’s high-level education and acceptance of programmatic trading,” he said. But demonstrating quality and ROI will help pave the way for programmatic to earn more of the overall media pie.
The slowdown in programmatic media can be a tough trend for some agencies, which historically make their money on media margins and not by bringing data to the table. Bernard said it’s also hard for agencies to compete for the talent that’s driving programmatic transitions at big brands or tech-first companies.
“It’s a change of activity and for some agencies it can be a tough change,” he said.
He added, however, that the agencies winning new business are often doing so based on improvements in areas like online transparency and contextual targeting.
This post was syndicated from Ad Exchanger.
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