Brief

Forecast: Programmatic spend to near $33B in 2017

Dive Brief:

  • EMarketer updated its programmatic display forecast to predict spend on the automated advertising technology will hit $32.56 billion in 2017, accounting for 78% of total display ad spending.
  • Those figures mean that four out of every five dollars for U.S. digital display advertising in 2017 will "transact programmatically." Looking out to 2019, eMarketer forecasts programmatic display will continue to grow at a healthy rate to $45.94 billion, representing 84% of total display spend.
  • Other changes are inbound in the space, however, as eMarketer sees a move toward more private marketplaces and direct buying over open exchanges. "They may have initially served to bring in reticent buyers and sellers, but now private setups drive much of the change and momentum in the marketplace, as both parties seek greater control from their programmatic efforts," eMarketer principal analyst Lauren Fisher said in the report.

Dive Insight:

Programmatic advertising has faced greater scrutiny of late, namely for its failure to account for where ads appear in the digital media space. The issue was highlighted last year, as marketers discovered their spots running next to "fake news" websites or other hosts to inflammatory material, but it's seen fresh mindshare as Google struggles to account for serving ads next to content featuring terrorism and hate speech on platforms like YouTube.

A number of big-name marketers have since frozen spend on Google properties until it can better address these shortcomings. Google's YouTube controversy also led JPMorgan Chase to downshift the number of websites programmatically serving its ads from 400,000 to just 5,000, with no discernable difference in the cost or measure of impressions.

The back-of-the-envelope conclusion is that programmatic buys into massive inventory, on top of being risky from a brand safety perspective, aren't really driving the desired marketing results, with shotgun strategies often hitting a lot of bad or unviewable media.

EMarketer’s latest forecast doesn’t see any long-term effect on programmatic spending, however. The digital space is perhaps too vast and unwieldy for anything other than an automated technology like programmatic to work, and private marketplaces might ensure a stronger measure of brand safety.

Marketers have also long opined for more direct inventory buys that can come with greater levels of quality assurance, so the trend away from massive open exchanges is likely to be a welcome one. 

Filed Under: Marketing Tech Trends Video