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Programmatic is Where It's At for Advertisers

Posted on 11.28.2016

Despite fears that programmatic advertising drives low-quality impressions, the tactic is being adopted at break-neck speed by advertisers.

In fact, according to Zenith’s “Programmatic Marketing Forecasts” report published this week, programmatic advertising will grow 31 percent in 2017 -- faster than all other digital media channels.

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The report estimates that programmatic will grow faster than social media (25 percent) and online video (20 percent), and suggests that an increasing proportion of these other channels will be traded programmatically in the very near future.  In fact, the report finds that programmatic will become the principal method of trading digital display in 2016 — accounting for 51 percent of expenditure — and will rise to 58 percent of expenditure in 2017.

Zenith' report also revealed that the U.S. is the largest programmatic ad market — valued at $24.0 billion in 2016 and accounting for 62 percent of total global programmatic ad spend. The U.S. programmatic ad market is followed by the U.K., valued at $3.3 billion, and China comes in third at $2.6 billion. Programmatic trading accounts for 70 percent of display advertising in the U.S. and the U.K, but just 23 percent in China. 

While programmatic advertising has often been used to reach target audiences as cheaply as possible with little regard for the quality of the sites in which the ads appeared, it is now being used in conjunction with data segments to target individuals in far more intelligent and creative ways, identifying those who are most likely to be receptive to an advertisers' messages.

Programmatic advertising has also begun to dominate the digital display market. Zenith indicated that while it accounted for just 13 percent of display ad spend ($5 billion) in 2012, in the U.S., it grew to $39 billion in 2016, at an average rate of 71 percent a year. The report noted that growth is slowing, however, as programmatic consolidates its dominance in the display market but the company suggests it will continue to grow at an average of 28 percent a year to 2018, when it will reach $64 billion.

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