|

Forecasts for programmatic spend revised as growth slows

Forecasts for programmatic spend revised as growth slows

By 2020 programmatic advertising will account for more than 80% of digital media spend in the UK market, according to the Zenith’s latest Advertising Expenditure Forecasts.

Meanwhile, global programmatic trading has seen its growth begin to slow.

The UK is currently the third largest programmatic market after the US and China, with programmatic spend expected to total £3.7bn this year – 76% of digital media trading. By 2020, Zenith predicts that 80% of digital media will be traded programmatically in the UK market, amounting to £4.6bn.

“We have seen a tremendous growth in programmatic adoption in the UK over the last few years. This is driven by a better understanding of the benefits programmatic brings to the table as well as the continuous innovation we are seeing in this space,” said Yu-Hsuan Lin, head of programmatic, Zenith.

“Given the innovation we have seen in the last few years, we believe programmatic will continue to grow in the UK and we have to continue evolving our programmatic offering to adapt to the these changes. This is especially true when more digital content is consumed, more devices are connected and more products are bought online. Despite the speed of change, this also presents great opportunities for brands.”

However, according to Zenith, brands and agencies will need to push publishers to improve the quality of their inventory which, at minimum, must be safe and viewable.

Globally, advertisers are forecasted to spend US$70bn programmatically this year; next year this is expected to rise to US$84bn, accounting for 65% of all digital media. By 2020, advertisers will spend US$98bn programmatically, or 68% of digital media expenditure.

These figures represent a slowing growth for programmatic. Zenith estimates that programmatic adspend will grow 24% in 2018, down from 32% growth in 2017, and forecast 19% growth in 2019, followed by 17% growth in 2020.

Global forecasts for 2018 and 2019 have therefore been pulled back by two percentage points since last year’s forecasts. Zenith attributes this change to the “chilling effect” of the introduction of privacy legislation (such as GDPR) and to advertisers investing more in infrastructure and data to make their programmatic activity more effective.

Media Jobs