Programmatic

Automated technology for selling, buying, and delivering ads hits prime time. This analysis is an extract from our 2018 Trends Report.

What is it about?

Programmatic refers to an automated technology for selling, buying, and delivering advertising impressions in real time. Ad inventories are linked to ad exchanges where advertisers participate in real-time bidding for impressions. Programmatic allows advertisers to access huge inventories, benefit from efficiencies, and improve targeting. It also offers media an automated solution to optimize the monetization of their growing inventories.

Although it has been widely criticized recently for the controversial placement of advertising next to offensive content as well as questions about the reliability of its audience measurement, programmatic still seems on target for strong growth in the years to come:

  • By 2019, 67.5% of global online advertising will be sold programmatically, compared to 59% in 2017. In Canada, 81% of online advertising was programmatic in 2017.
  • The value of programmatic advertising worldwide is expected to increase from US$57.5 billion in 2017 to US$84.9 billion in 2019.

Why is it important to our industries?

While most programmatic revenue is now generated in the online advertising market, this could change. Although several issues still need to be addressed – setting common guidelines and standards for data collection – programmatic is likely to be extended to mainstream media. The shift in audience (and advertising dollars) from television to digital will encourage broadcasters to shift to programmatic technology to maintain their dominant position in the advertising market. Still in its infancy in most markets, Zenith already sees a mainstream migration in the US, where it estimates that 6% of programmatic spending was generated in television, radio, outdoor, and cinema in 2017, a percentage that could reach 13.6% by 2019.

Interesting facts

A working group of major players like Hulu, Adobe, CBS, FOX, and DataXu has developed ABCD (Automated Linear Broadcast Cross Device) standards for best practices in buying linear TV inventory and for measurement systems on multiple devices. It’s definitely a step in the right direction towards establishing common technical standards for the advertising and audiovisual sectors.

Go deeper

Worth following

Blockchain can be used to fight fraud and ensure brand security in programmatic. Start-ups Blockchain Programmatic Corporation and MadHive are already betting on it.

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