Commentary

Programmatic Beating Its Already Lofty Spend Estimates

The big news out this morning in the programmatic space -- other than the fact that Advertising Week kicks off, which the Wall Street Journal is dubbing the (Programmatic) Advertising Week -- was the updated tracking study from Interpublic’s Mediabrands’ Magna Global unit, which forecasts programmatic media-buying to reach $53 billion in global ad spend in 2018.

For the purposes of its analysis, Magna defines programmatic as media buys ‘that are based on automated platforms and that are driven by consumer data.’ It includes both open market and auction-based RTB (real-time bidding), as well as private exchanges between media buyers and sellers,” Real-Time Daily explains.

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In last year’s rendition of the report, Magna projected global programmatic ad spend to reach $33 billion by 2017. The new report estimates programmatic ad spend to expand at an annual rate of 27% over the next four years (which would mean spend would be greater than $33 billion by 2017).

It’s possible that the revised estimates in spend are due to the fact that many well-known brands and publishers have recently made headlines when it comes to programmatic adoption. Just this morning, it was reported that NBC is extending its programmatic digital ad sales tech, while other companies -- such as P&G and American Express -- have indicated they will heavily invest in programmatic.

Another possible reason for the boosted predictions is the fact that Consumer Packaged Goods (CPG) companies have emerged as big programmatic spenders. The second biggest, in fact, behind only retail. Magna highlights the CPG industry’s adoption of programmatic in its report. 

The CPG industry was the fifth highest-spending vertical in Q1 2014 when it came to programmatic, but jumped to the No. 2 spot in Q2, per a recent Casale Media report. Mondelez, for example, became one of the top 10 highest-spending brands in programmatic last quarter after striking a deal with TubeMogul to run video campaigns via programmatic.

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