Programmatic to account for half of online display this year

The share of ads bought through programmatic technologies is estimated to grow to 47% in 2014 and could reach up to 60-75% of total digital display advertising by 2017, according to new research conducted by MTM on behalf of the Internet Advertising Bureau.

The study reveals that of the £1.86 billion spent on display ads across the internet and mobile in 2013, 28% (approximately £500 million) was traded programmatically – which refers to display ads that are bought and sold using automated systems and processes, such as real-time bidding.

This figure rises to 37% on mobile, while the number of programmatic trades of internet video ads was much lower at 16%.

“Programmatic is more dominant on mobile due to various factors,” said Tim Elkington, director of research and strategy at the IAB.

“It’s a more fragmented ecosystem and, being relatively harder to monetise, has enabled a wide range of intermediaries to develop more quickly, particularly having learned lessons from serving ads programmatically on PCs.”

Elkington said that programmatic has risen primarily because of the efficiencies it provides marketers when faced with an “overwhelming level of digital inventory and audience fragmentation.”

“It’s likely to grow even faster as the market becomes more experienced using programmatic, has a greater understanding of how it works, and is properly educated around the negative perceptions associated with programmatic trading,” he said.

In 2013, direct sales between publishers and agencies/advertisers accounted for 51% of UK digital display ad sales, while 22% were bought through ad networks.

However, despite the growth of programmatic trading, most UK advertisers remain uncertain about real-time advertising (RTA), according to another ISBA survey – with one third not sure how much of their online campaigns even involve automation.

The survey, run in collaboration with real-time advertising specialists Infectious Media, shows that 38% of advertisers are ‘not very aware’ of the different providers of programmatic ad buying services and 96% intend to learn more. Just one third admitted to having a ‘positive perception’ of RTA.