By Ritika Puri
As mainstream as the programmatic advertising technology has become, the ecosystem is also very new. Open, online auctions make it possible for any company, agency, and advertiser to engage online audiences and generate an ROI. Whether you’re experienced or brand new to this landscape, here are the 4 stats that you need to know:
Programmatic revenues totaled $10.1 billion in 2014 comprising approximately 20% of total internet advertising revenues ($49.5 billion), inclusive of mobile and comprised a majority of display related revenues.
Despite the scale of programmatic, there is still room for the market opportunity to expand. The majority of programmatic revenue is still concentrated within display, even though there are new native, video, and social media based advertising opportunities emerging. These channels, like their predecessors in display, will one day rely on programmatic technologies to run.
With the space still in its infancy, ad networks, digital media leaders, and publishers should keep a close eye for technology newcomers to the market—there is also plenty of opportunity to become a newcomer with new solutions to introduce. If you’ve ever considered experimenting in the space or bringing a new programmatic opportunity to market, the time is now.
Programmatic revenues from ad tech outweighed those from publishers in 2014.
Ad tech accounted for approximately 55% of programmatic revenues, while publishers accounted for approximately 45% of programmatic revenues in 2014. Keeping this stat in mind, it’s mission-critical that publishers fight to have more of a presence, by developing their own solutions and collaborating more closely with publishers.
To some extent, some publishers and ad networks are operating at odds, with programmatic revenues competing with the monetization opportunities that come from direct-sold inventory. As a recent article in AdAge points out, digital publishers have long been wary of the automated ad market.
Ad networks and publishers depend on one another for the monetization equation, which is why conversations between the two parties need to stay closely aligned. Programmatic is a massive opportunity that requires collaboration from both sides of the ad tech market.
The majority of programmatic inventory was bought and sold through Open Auctions, but the study points to a shift to other types (i.e. Private Auction, Unreserved Fixed Rate or Automated Guaranteed) in the next few years.
Open Auctions made up approximately 70% of the programmatic revenue in 2014. Within this context, the IAB foresees a shift to other types as advertisers and premium publishers see the need arising.
At the end of the day, advertising technologies exist to connect prospective buyers with products, offers, and services that they are likely to find valuable. Each audience is different, which means that over time, advertisers are going to need solutions that are tailored to their exact targeting needs. Likewise, the digital marketing industry will see more specialization, driven by technology. This need will drive innovation and even more opportunities for growth.
Even though some companies have relied on programmatic ad technologies for a decade-plus, the market is still young. Digital media leaders must keep their eyes on the prize: closer to connections with audiences. This perspective will be crucial to the future of programmatic and the resulting technologies that emerge.
Ritika Puri is the co-founder of Storyhackers, a San Francisco based content marketing and data storytelling company that works with a dozen ad tech clients. In past lives, she led analytics, partnerships, and marketing teams.
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