86.5% of digital display dollars will be programmatic by 2020, eMarketer forecasts

Dive Brief:

More than four out of five every digital display ad dollars in the U.S. are bought programmatically, according to eMarketer forecasts and the report “US Programmatic Ad Spending Forecast Update: Video Powers Significant Growth through 2020.” Most digital display dollars, or 86.5%, will transact programmatically by 2020 compared with 82.5% for this year.
Programmatic direct accounts for the largest share of programmatic ad spending, at 58%. Open marketplaces account for 29% of transaction volume and private marketplaces for 19%. Social API-based buying is a big driver of direct programmatic ad spending, accounting for well over half of the volume.
Among mobile display's total spend of $31 billion, 84.1% will be programmatic in 2018. Programmatic will account for 81% of the $23 billion in total video spend this year.

Dive Insight:

The large role for social API-based buying in programmatic direct — which refers to guaranteed inventory purchased between an publisher and a marketer — is interesting because it suggests that a number of brand safety issues with social media sites over the past couple of years aren't discouraging marketers from handing over their money for automated purchases even though they don't have control over what content their ads appear alongside, although the platforms are making brand safety a bigger priority. With social media sites like Facebook moving away from using third-party data to target ads and bowing to pressure to include more first-party data, this could further boost the social portion of programmatic direct budgets. There is a

Marketers are attracted to the automation and efficiency of programmatic. With the continued investment in programmatic, more marketers are looking to merge their media buying processes. Three-quarters of marketing agencies are beginning to combine their direct and programmatic media buying teams, and 17% have already completely merged the operations, according to a Centro-commissioned study. To link their media buying, agencies are investing in technology and personnel, as well as new processes, and see data silos, people skills and operations as the biggest challenges to innovating digital media buying.

One of the biggest spenders in the programmatic space is Amazon, which accounted for 10% of the spend of the top 50 programmatic advertisers in Q1 2018, according to a MediaRadar analysis. Amazon spent 1.5x more than Microsoft, the next-biggest spender in the analysis. Seventy-five percent of all brands tracked placed digital ads programmatically and 42% placed native ads programmatically, 10% increase over last year.