Mobile to Claim 70% of Programmatic Display Market

Programmatic advertising has seen a stellar rise, more than doubling each year for the past two years. This year the share of programmatic will be over half of the total display advertising market. And as display advertising has shifted to mobile very rapidly, programmatic is no exception.
In 2015, mobile will account for 44.1% of all US programmatic display, a market currently worth $10 billion. By 2016, mobile is expected to surpass desktop, claiming an estimated 56.2% of all ad expenditure. After experiencing tremendous growth of 243.4% last year, eMarketer predicts ad spend on mobile programmatic display will nearly double this year to $8.36 billion. Next year, expect mobile programmatic to claim 70%, or the lion’s share of the programmatic display market.
Programmatic is not the same as RTB
Obviously, advertisers see the benefits of allocating their ad spend to electronic ad buying. It’s more efficient, enables better targeting, and provides significantly more transparency down to the single impression level, compared to direct deals. Some publishers on the other hand fear a “race to the bottom”, as they expect Real Time Bidding (RTB) to drive down CPM. However, programmatic entails much more than RTB and therefore these fears are largely ungrounded. In addition, mobile programmatic differs significantly from its desktop counterpart.
Programmatic advertising entails transacting advertising media (static image, rich media, video, etc.) through data-driven auction technologies. The keyword here being data-driven. As discussed a few weeks back in this article, a customer-centric approach is essential to reach modern multi-device consumers and this approach needs a solid foundation of first and third party data.
Providing audience intelligence on the single impression level across different channels will be increasingly in demand, and it will be sink or swim for publishers. Especially on mobile, the world’s most intimate device, being able to deliver the right message to the right consumer at the right time increases both ROI for advertisers and eCPM for publishers. No wonder 33% of marketers (or the majority) see mobile as the channel with the most opportunity for programmatic advertising.

Programmatic direct
Publishers with premium inventory – usually uncomfortable with offloading this inventory to open exchanges – are increasingly using programmatic as well, but with a direct component, called programmatic direct. This combines the efficiency and data from programmatic with the benefits of guaranteed inventory and fixed prices of direct. eMarketer expects that this type of ad buying will soar the coming years as premium publishers adopt it in big numbers, forming 42% of the programmatic market up from 8% today.

Private exchanges
Another way for premium publishers to keep more control of their inventory is through private exchanges. These allow publishers to whitelist appropriate advertisers and set price floors. It provides advertisers with more transparency and sometimes better targeting and measuring capabilities through unique first party data.
With the influx of ad spend in mobile programmatic, data will become the force which drives audience-centered programmatic into the mobile ecosystem. The large-scale and complex execution of enterprise-sized cross-channel campaigns will necessitate data platforms to facilitate this which makes stellar measurement capabilities and data analytics tools indispensable.
In my next article, we will cover 3 key challenges in programmatic today plus predictions around the future of programmatic and how it relates to mobile video.

Programmatic advertising has seen a stellar rise, more than doubling each year for the past two years. This year the share of programmatic will be over half of the total display advertising market. And as display advertising has shifted to mobile very rapidly, programmatic is no exception.

In 2015, mobile will account for 44.1% of all US programmatic display, a market currently worth $10 billion. By 2016, mobile is expected to surpass desktop, claiming an estimated 56.2% of all ad expenditure. After experiencing tremendous growth of 243.4% last year, eMarketer predicts ad spend on mobile programmatic display will nearly double this year to $8.36 billion. Next year, expect mobile programmatic to claim 70%, or the lion’s share of the programmatic display market.

Programmatic is not the same as RTB

Obviously, advertisers see the benefits of allocating their ad spend to electronic ad buying. It’s more efficient, enables better targeting, and provides significantly more transparency down to the single impression level, compared to direct deals. Some publishers on the other hand fear a “race to the bottom”, as they expect Real Time Bidding (RTB) to drive down CPM. However, programmatic entails much more than RTB and therefore these fears are largely ungrounded. In addition, mobile programmatic differs significantly from its desktop counterpart.

Programmatic advertising entails transacting advertising media (static image, rich media, video, etc.) through data-driven auction technologies. The keyword here being data-driven. As discussed a few weeks back in this article, a customer-centric approach is essential to reach modern multi-device consumers and this approach needs a solid foundation of first and third party data.

Providing audience intelligence on the single impression level across different channels will be increasingly in demand, and it will be sink or swim for publishers. Especially on mobile, the world’s most intimate device, being able to deliver the right message to the right consumer at the right time increases both ROI for advertisers and eCPM for publishers. No wonder 33% of marketers (or the majority) see mobile as the channel with the most opportunity for programmatic advertising.

opportunity-1.png

opportunity-1.png

Programmatic direct

Publishers with premium inventory – usually uncomfortable with offloading this inventory to open exchanges – are increasingly using programmatic as well, but with a direct component, called programmatic direct. This combines the efficiency and data from programmatic with the benefits of guaranteed inventory and fixed prices of direct. eMarketer expects that this type of ad buying will soar the coming years as premium publishers adopt it in big numbers, forming 42% of the programmatic market up from 8% today.

programmatic-capability-1.png

Private exchanges

Another way for premium publishers to keep more control of their inventory is through private exchanges. These allow publishers to whitelist appropriate advertisers and set price floors. It provides advertisers with more transparency and sometimes better targeting and measuring capabilities through unique first party data.

With the influx of ad spend in mobile programmatic, data will become the force which drives audience-centered programmatic into the mobile ecosystem. The large-scale and complex execution of enterprise-sized cross-channel campaigns will necessitate data platforms to facilitate this which makes stellar measurement capabilities and data analytics tools indispensable.

In my next article, we will cover 3 key challenges in programmatic today plus predictions around the future of programmatic and how it relates to mobile video.

Read more on Business 2 Community 

Related News
“Mad Men” are turning into Mad Bots. More than half the $15 billion expected to be spent in 2015 on US digital display advertising will take place through computers —... ...
READ MORE
European privacy regulators gathered to discuss the growing public outcry over how governments and tech giants gather and use people's data. Source:: European Privacy Debate on Display in Paris
READ MORE
Clark Griswold may have finally met his match. Following in his four-year tradition of crafting elaborate holiday lights displays, Texas homeowner John Storms and his family transformed their abode into... ...
READ MORE
The past 12 months saw above-average creativity in saying one thing and meaning another. John Foley and Rob Cox of Reuters Breakingviews offer 10 euphemisms they would most like to ...
READ MORE
Mobile Loaves and Fishes inspires Claudia Barlow and her daughter, Bailey, to work with a community of homeless and formerly homeless people in Austin, Tex. Source:: Charities That Inspire Kids: ...
READ MORE
While Intel's profit rose significantly, concerns remain about whether it can move beyond its focus on putting chips in personal computers and servers. Source:: Daily Report: Intel Posts a Profit, ...
READ MORE
Shares in BYD, a Chinese electric car company backed by Warren Buffet's Berkshire Hathaway, plunged without explanation by as much as 47 percent on Thursday. Source:: BYD Shares Plunge, Losing ...
READ MORE
SAN DIEGO — There is a lot of noise surrounding these Winter Meetings. Executives say the volume of conversation has been so extensive that trades — significant trades — will... ...
READ MORE
Digital display advertising expected to grow in 2015
European Privacy Debate on Display in Paris
‘Frozen’-themed Christmas display lights up the season
The Year in Market Doublespeak
Charities That Inspire Kids: Mobile Loaves and Fishes
Daily Report: Intel Posts a Profit, Despite Losses
BYD Shares Plunge, Losing $1 Billion in Market
How Scott Boras’ demands cloud market for Max

Share Button

Leave a Reply

Your email address will not be published. Required fields are marked *