Commentary

Exchange-Based Media Dominate Big Agency Spending: RTB Is Growing Fast, But Still An Also-Ran

DigMarketShareandGrowth

The other day I wrote about some new data from a variety of sources -- the IAB, Pivotal Research Group and Accordant Media -- indicating that the expansion of the exchange-based media marketplace might be taking some steam out of the overall growth of digital media, mainly because of their contribution to the overall efficiency of digital marketing campaigns. If that’s the case, it’s most likely coming from long- and mid-tail marketers and agencies, because some important new data suggests it’s still a tiny share of what’s being bought by the big agency holding companies. The data, which comes from Standard Media Index, comes directly out of the data processing systems used by four of the Big 6 agency holding companies -- Aegis, Havas, Interpublic and Publicis -- and it shows that, with the exception of search, exchange-based media is still a relatively small part of what Madison Avenue actually buys. At least if you define Madison Avenue as the big holding companies.
 
The good news is that the SMI data shows that overall digital continues to grow as a percentage of big agency buys, and now represents about 25 cents for every dollar spent by the biggest shops. But most of that is still going to premium online display inventory sold directly by publishers, or search.
 
Non-exchange based display ad buys currently account for more than a third (36.5%) of all digital media bought by Madison Avenue. Search accounts for more than a quarter (26.2%). The remaining third comes from sources that may be bought direct, or through exchanges, including social, video, ad nets, and RTB. But if you look at it another way, and include search in the exchange-based bucket, then direct buying of digital media may now be the minority of digital media purchased by the big holding companies.
 
That would explain their focus on building trading desks, and developing biddable media specialty teams. That said, pure-play RTB is still a relatively tiny portion -- just 4.8% -- of what the big agencies do. But it’s growing fast, up 35% over the past year.
 

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