• by Steve Smith , Staff Writer @popeyesm, April 15, 2014

From the start of the ad automation revolution, it has been tough to gauge exactly how much of media buying online really was migrating to programmatic channels. Add to that ongoing murkiness over distinctions between “RTB” versus “programmatic” plus the difference between counting ad volume or ad revenue, and it seemed just about anyone in the industry had license to guesstimate any number they liked. 

One way to understand what the online inventory actually looks like as automation overwhelms all aspects of the field is just to count the ads themselves. That is what Adomic does, which offers interesting glimpses of who is buying what kind of inventory among the top publishers. It crawls major media sites to see where the ads in different categories come from.

And according to Adomic’s tracking for 2013, the top 1,000 advertisers ran 28% of their ads through programmatic channels in December 2012, but 36% in December 2013. By the holiday period last year, ads defined here as coming from “direct” channels had fallen from 43% of ads on major sites to rough parity with programmatic. Ad networks saw a slow decline in share after an initial bump early in 2013 to finish the year responsible for about 27% of ads served.

The market shares are not precise, largely because the definitions tend to overlap. For instance, a number of the ad networks are themselves using programmatic channels, even though those are counted as network buys. Likewise, the programmatic category is not entirely distinct from direct since it does not distinguish between inventory using RTB platforms and so-called “programmatic direct,” where the buy itself came via a direct relationship between buyer and publisher but the ad was executed on automated systems. And some premium publishers who have embraced more automation are using the platforms as booking tools for ads secured by traditional means.

When Adomic counted ads across the top 500 publishers, it came up with somewhat less dramatic growth, however. These major media companies saw an 8% decline in the share of inventory coming through direct systems last year. Still 53% of inventory at these sites was direct, versus 31% programmatic and just over 10% from networks. Programmatic, whether coming from open exchanges, private exchanges or as programmatic direct, is still not close to dominating traditional bookings. “Large publishers are holding back a significant portion of their inventory for directly sold campaigns,” Adomic observes in its report.

The story changes dramatically when you shift the lens to the top 3,000 publishers. As the tail lengthens, we see a steep drop in direct sales, from 55% in Dec. 2012 to 41% a year later. Programmatic ads went from 29% of this longer tail inventory to 40%.

For all of the increased activity in programmatic channels, and the likely increase in more programmatic premium inventory, this is very much a direct-response vehicle. The top categories of advertiser buying programmatic inventory continue to be gifts and occasions, about 68% of their ads, dating (57%) and gaming and weight loss/fitness (55% each).

The full report is available at Adomic’s site.