• by Jack Loechner , Staff Writer @mp_research, December 14, 2016

According to Zenith’s Programmatic Marketing Forecasts, programmatic advertising will grow 31% in 2017, faster than all other digital channels. This report, which covers 41 key advertising markets, estimates that programmatic will grow comfortably faster than social media (which will grow 25%) and online video (20%), and a growing proportion of these other channels will be traded programmatically. Programmatic will become the principal method of trading digital display this year, accounting for 51% of expenditure, and will rise to 58% of expenditure in 2017.

At first programmatic marketing was often 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 valuable data segments, to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages.

Programmatic advertising has risen to dominate the digital display market in just a few years, having accounted for just 13% of display ad spend in 2012. Programmatic ad spend grew from US$5bn in 2012 to US$39bn in 2016, at an average rate of 71% a year. Its growth is slowing down as it consolidates its dominance of the display market, but, according to the study, expect programmatic advertising to grow at an average of 28% a year to 2018, when it will reach US$64bn.

The US is the biggest programmatic ad market by a long distance, worth US$24.0bn in 2016 and accounting for 62% of total global programmatic ad spend.

• The UK comes a distant second, worth US$3.3bn
• China third, worth US$2.6bn.

Programmatic trading accounts for 70% of display in the US and the UK, but only 23% in China, says the report, so there is plenty room for rapid growth in China.

Though these figures refer only to digital media, programmatic trading is starting to spread into the ‘traditional’ media. Some television, radio and digital out-of-home platforms already offer automated and data-driven trading of inventory. Eventually programmatic trading will be available as standard across traditional media, concludes the report.

Benoit Cacheux, Global Head of Digital & Innovation at Zenith, says “… programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets… the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments… especially private market places… and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”

For more information from Zenith, please visit here.