The growth of mobile content consumption is driving greater investment in programmatic ad spending according to a new report by eMarketer. The latest forecast from the research company has revealed that programmatic display ad spending will surpass $25 billion in the United States this year, which exceeds previous projections significantly.
Programmatic marketing is defined as the use of software and algorithms to purchase ads in real time. The process made up just over half of all total display ad spending in 2014, but that has now surged to 73 per cent and is tipped to reach 78 per cent and US$31.87 billion by the end of 2017.
The reason for the double-digit rates of growth is the popularity of mobile and, in particular, video. Facebook currently takes the lion’s share of programmatic display spending and is expected to reach revenues of US$11.10 billion by 2018, which represents just over 43 per cent of the total.
Facebook’s dominance in this area is highlighted by the fact that Google is in a distant second with a projected 9.4 per cent share, which equates to US$2.39 billion in revenue. eMarketer notes that publishers are now more willing and able to embrace programmatic tech to reach their target audiences effectively across a variety of platforms.
“Programmatic buying is becoming more popular as marketers increasingly take an audience-centric approach to their display ad buys,” eMarketer senior analyst Lauren Fisher said. “Publishers are becoming more comfortable with programmatic technology and therefore more willing and able to package audiences in this manner. That has accelerated spending in mobile and other formats that have traditionally shied away from programmatic, such as video.”
Mobile programmatic ad spending will account for two-thirds of investment this year and will far exceed levels on desktop, which it overtook in 2015. While ad spending is growing on desktop, it will only account for around one-quarter of spending by next year. Video is also a key driver as marketers take advantage of improved targeting, measurement and viewability to propel engagement.
Fisher concluded: “As technology makes it easier and safer for brand advertisers to pursue their TV audiences into digital video, programmatic will emerge as the smartest, most precise method of doing so.”