Conducted by research and strategy consultancy MTM on behalf of the Internet Advertising Bureau UK (IAB), the “Media Owner Sales Techniques” study shows that of the £1.86 billion spent on display ads across the internet and mobile in 2013, 28% (about £500m million) was traded programmatically. ‘Programmatic’ refers to display ads that are bought and sold using automated systems and processes such as real-time bidding.
Direct sales between publishers and agencies/advertisers accounted for half (51%) of UK digital display ad sales while just over a fifth (22%) were bought through ad networks.
“Prior to this new research there was no reliable way to evaluate how big a role programmatic plays in the display market so it was time to put a stake in the ground and give the industry accurate numbers,” says Tim Elkington, Director of Research & Strategy at the UK’s Internet Advertising Bureau.
“It’s important the industry understands how the market is split as it enables all those involved – media owners, advertisers and agencies – to take advantage of the exciting opportunities programmatic presents.”
Whilst programmatic accounts for 28% of all digital display ads, this rises to 37% on mobile. In comparison, only 16% of internet video ads (excluding mobile video) are traded programmatically.
Elkington comments: “Programmatic is more dominant on mobile due to various factors; it’s a more fragmented ecosystem and, being relatively harder to monetise, has enabled a wide range of intermediaries to develop more quickly, particularly having learned lessons from serving ads programmatically on PCs.”
The share of ads bought through programmatic technologies is estimated to grow from 28% in 2013 to almost half (47%) in 2014 and could reach up to 60-75% of total digital display advertising by 2017.
“Programmatic has risen primarily because of the efficiencies it provides marketers when faced with an overwhelming level of digital inventory and audience fragmentation,” concludes Elkington. “It’s likely to grow even faster as the market becomes more experienced using programmatic, has a greater understanding of how it works, and is properly educated around the negative perceptions associated with programmatic trading.”
