How's No Growth, Is That Slow Enough For You?

Digital ad spending “decelerated only slightly” during the first quarter, according to new estimates released this morning by a highly regarded ad tracker -- Pivotal Research Group’s Brian Wieser -- but the big story is that once you strip out the performance of the online industry’s biggies (Google and Facebook), there was “no growth for old display” advertising. Actually, that’s not a deceleration. It’s more like a cold stop. When Wieser did a similar analysis for calendar year 2012, he found total online display grew 3.8% after stripping Google and Facebook out. Why is this fodder for RTBlog? Well, Wieser doesn’t speculate on this, but I believe that at least part of the slowdown in overall display ad growth is due to greater efficiency created by programmatic trading, and specifically, real-time bidding.
I mean, at the very least, much of Facebook’s growth has been coming from the Facebook Exchange, and Google, well, it’s always been largely programmatic. They are platforms that are just easier and more efficient for marketers to scale, regardless of whether they are long- or short-tail advertisers.
How much steam programmatic has been taking out of the rest of the display ad biz may not be clear. It’s still a relatively small share of total online media-buying. But it may be enough -- especially amid an overall contraction in total ad demand -- to make a difference. Personally, I believe these are short-term factors and that once the supply and demand of programmatic buying stabilizes (as more brands begin to use it), the downward price pressure will change along with it. Stay tuned.



2 comments about "How's No Growth, Is That Slow Enough For You?".
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  1. Jay Stevens from the Rubicon Project, May 10, 2013 at 1:51 p.m.

    Joe, you couldn't have said it any better. Programmatic is the only way for publishers who are not GOOG or FB to recognize continued growth in their display business. The problem is further magnified in markets outside the US where populations are smaller, and therefore budgets and IOs are proportionally diminished. Publishers simply can't throw more heads against the problem. Growth will come only from adopting programmatic trading and reducing the operational inefficiencies in our industry.

  2. Raj Chauhan from Adslot, Inc., May 10, 2013 at 2:19 p.m.

    Not surprising with all the manual processes to trade guaranteed display media. With 80-85% of display revenue still in guaranteed orders we need to focus on automation in that area. The inefficiencies in this trading cost the industry an estimated $.28 for every dollar of media spend. This cost of goods is excessive, especially when compared to TV which is at 2% vs. our 28%. Agencies want to buy more - faster - but the manual nature of discovery (audience, price and inventory) and the rest of the process is too laborious. This week Cory Treffiletti wrote on MP "Automating The RFP And Buying Process (For Real)" which is a related article to why the growth is not impressive.

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