eMarketer Webinar: Programmatic Advertising 2015 Outlook

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Programmatic Advertising 2015

Outlook

Lauren T. Fisher

Analyst

February 12, 2015


Agenda:

Defining “programmatic”

Sizing US programmatic digital display investment

Tracking key programmatic trends for 2015


Defining

‘Programmatic Advertising’


What is programmatic advertising?

Programmatic advertising is an automated,

technology-driven method of buying, selling or fulfilling

ad placements


Within

programmatic,

there are two

main

subcategories:

RTB and

programmatic

direct


A word of

caution on

‘private

marketplaces’


Sizing US Programmatic

Digital Display Ad

Spending


In 2015, the spending scale will tip toward

programmatic:

55% of all

US digital display

ads will be bought

programmatically

in 2015, worth

$14.88 billion


RTB will capture the lion’s share of

programmatic ad dollars, but programmatic

direct will gain quickly

8% 26% 42%

Expected portion of US programmatic digital display ad spending

flowing through programmatic direct channels in 2014,

2015 and 2016


Dollars flowing into programmatic direct won’t

necessarily come from RTB

“ Looking at programmatic direct,

specifically the reservations and futures,

a lot of those ad dollars will come

from traditional ad buying

margins. Agencies and traditional buyers

are at a point where they’re looking to

simplify the buying process and want to

consolidate toolsets and streamline

processes in doing so.”

—Esco Strong, director of programmatic

advertising at Microsoft


Within RTB,

the open

exchanges

will continue

to dominate,

though private

marketplaces

will see steep

growth


More than

half of all US

programmatic

digital display

ad spend will

come from

mobile this

year


Factors driving mobile programmatic growth

include:

Broader ad spending growth across mobile display

Large-scale programmatic adoption among those

best positioned for cross-device and mobile

Improvements to incorporating mobile data into

demand-side platforms (DSPs) and exchanges

Movement away from last-click attribution models


Interest and chatter around programmatic video

will be significant this year …


… but programmatic’s overall contribution to

video won’t match the hype

14.6%

Programmatic ad spending

allocated to video

28%

Total video ad spending

transacted programmatically


Key Takeaways:

2015 will be a tipping point for programmatic advertising

Open exchanges will still thrive, but programmatic direct

will come of age

More than half of all ad spending will come from mobile

Most video ad dollars will remain locked in with

traditional direct sales


Tracking Trends for 2015


1. More private-type setups will proliferate


Combined, US programmatic direct and private

marketplace spend will account for:

43% of US

programmatic

digital display

ad spending in

2015

58% in 2016


2. Longstanding concerns about inventory

quality will finally be addressed


To continue to thrive, the open markets will have

no choice but to embrace quality

“ The buy side is getting more

sophisticated when it comes to traffic

quality and viewability. To the extent

that the exchanges don’t make similar

investments in their own quality,

they’re going to find there’s less and

less demand out there. Ultimately,

they’ll find themselves priced out of

market.”

—John Murphy, VP of marketplace quality

at OpenX


3. Marketers will look beyond third-party cookies

to other data sources

CRM

Cross-device

Offline purchase

data


4. Programmatic

advertising

won’t move

in-house

en masse


5. Interest and talk around programmatic TV will

far outweigh investment


Programmatic is more apt to come to TV in

stages vs. widespread adoption

Addressable TV

Linear TV

– Spot & scattered

– Upfront & national:

Data-driven

– Upfront & national:

True automation


6. Where programmatic will make gains is with

connected TV and over-the-top (OTT) video

“ This year, we’ll see real

auctions running inside of many of

the apps that sit inside your Roku,

your Amazon Fire or your Apple TV.”

—Jeff Green, CEO of The Trade Desk


7. As other devices and screens enter the mix,

expect programmatic to play a significant role


Key Takeaways:

Programmatic will tip the scale on ad spend this year

Mobile will be a driving force

Programmatic direct and private marketplaces will draw

new ad dollars to programmatic

Improvements to ad quality will become mandatory

Data will continue to prove critical to development

Programmatic buying is coming to TV and wearables,

but 2015 won’t be the breakthrough year

Building Brands Through Programmatic

02.12.15

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Lauren T. Fisher

Programmatic Advertising

2015 Outlook

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Transform Digital’s Premium Marketplace

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eMarketer Webinar: Programmatic Advertising 2015 Outlook