• by James Green , Op-Ed Contributor, March 19, 2015

Every day, programmatic spending continues to become a larger percentage of digital display advertising, especially as marketers solidify infrastructure and testing with the build-out of private marketplaces, executing programmatic-direct details across mobile and video advertising.

According to eMarketer, RTB now serves as the dominant transaction method of programmatic buying, accounting for more than 90% of digital ad dollars in 2014. However, there is a shift occurring with RTB that will have an impact on the future of the media buying market.

The open exchange marketplace is currently seeing explosive growth: it’s increased from $4 billion to about $8 billion between 2013 and 2014, and is expected to reach $8.4 billion in 2015 and $8.52 billion in 2016. In total, open exchanges account for almost 90% of RTB digital display spending in the U.S. This trend shows significant increase in dollars spent the last two years, but there will also be a slowdown in growth, with dollars expected to flatten out this year and next. On the other hand, while private marketplaces may have gotten off to a slower start, they are expected to have reached about $1 billion for 2014 and are also expected to double in 2015 ($2.53 billion) and reach over $3 billion in 2016. 

Even with the growth of video and mobile over the past year, the majority of programmatic buying is still restricted to banner ads. Publishers still guard their more valuable inventory, and advertisers still save their more creative and sponsored executions for premium and guaranteed buys. So it’s still common for video, nonstandard or custom rich-media ad units to be typically sold via traditional direct sales channels. However, the rise in programmatic direct and private marketplaces will start to change these behaviors for both the sell and buy sides of the business, which in turn will allow big data to make its way into buys beyond banner advertising. In a private-marketplace and programmatic-direct world, publishers will be able to maintain a level of control over pricing, but will have the ability to meet the data needs of today’s real-time, insights-driven marketer.

The important thing to remember is that is all comes back to the one major element that has forever changed advertising. From programmatic, direct or not, to marketplaces, private or not, it still comes down to data, which is the driving force behind the growth in automated buying. Data has allowed media buying to become more automated, efficient and cost-effective. It’s also data that lets brands, large and small, learn more about customers and react instantaneously to their behaviors and audience indicators like site visitation, search activity, purchase intent, and social data.

While it has taken some time for publishers and advertisers to flesh out how data fits into their larger brand-based sponsorships, mobile and video, or other more premium inventory, it hasn’t stopped the adoption of RTB in general. Without the right targetable data available, the massive growth in RTB would never have been possible. Data has inevitably moved buyers beyond context and into audiences. A large majority of digital advertising is guaranteed to an audience buy. So, even if video and other buys might not be considered “programmatic” today, you can be sure that the natural progression will mean it moves in that direction.