Thought Leadership

The 3 Biggest Trends in Programmatic

PulsePoint

August 17, 2015

By Ritika Puri

A recent study from PwC and the IAB, co-sponsored by PulsePoint and Google, points out that programmatic advertising revenues totaled $10.1 billion in 2014, with display banner ads making up 80 percent of this number. Despite this strong performance, the industry is in flux. For one, the top 10 companies command 66 percent of all programmatic revenues, meaning that there is still room for democratization in presence. Meanwhile, the term itself is yet to be defined, with disparity in terms of how survey participants define the concept. Despite the scale and scope of the industry, there is still room to evolve. Here are the 3 biggest trends for advertisers to watch.

1. The need for mobile to catch up

Another challenge that businesses face is the adoption of mobile programmatic—which is lagging behind its desktop counterpart. Despite the prevalence and ubiquity of mobile, advertisers are struggling to track target audiences across devices. In the context of this dynamic, social platforms are emerging as the missing link. By tracking logged-in data, channels like Facebook, LinkedIn, and Twitter can more accurately target across devices. The future of programmatic may involve a social component.

2. The growth of programmatic video.

The IAB study found that the adoption of programmatic digital video lagged behind display. For one, publishers are selling out their inventory through direct channels. What’s important to keep in mind, however, is that video is still a new channel and major investments. Publishers may need some time to justify higher editorial budgets—something that advertiser demand for direct-sold inventory will validate. As a feedback loop, publishers will likely respond with the creation of more video inventory. This opportunity will open doors for programmatic, with the opportunity for ad space supply to exceed demand. Expect video to become a larger part of the publishing and programmatic mix.

3. An overabundance of display inventory

With 80 percent of programmatic advertising revenues coming from banner ads, there is an oversaturation of marketing content. To stand out, advertisers need to find creative and interactive ways to capture their audience’s attention. As a result, alternative ad formats are going to enter the programmatic space. Sponsored content and video ads are strong contenders to watch. Over time, as the space evolves, clicks and views will cease to dominate programmatic channels. New currencies will come in the form of viewability and engagement. Expect this change to happen fast, as today’s digital audiences demand engaging, interactive experiences.

Final thoughts

Challenges in programmatic advertising are sparking new opportunities. Over time, the digital media industry will begin to see a push towards quality and diversity, making playing fields more level and competitive. Right now, 10 companies are dominating the space, which means that there is more opportunity to evolve and grow, as quality players enter the mix. Get ready, and expect these changes to happen fast. Audiences are ready for personalized, tailored, and engaging marketing messages. These trends will force advertisers to catch up.

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