Commentary

Ad Tech Has Come Along Way From Open RTB, And Still Has A Long Way To Go

This week’s news from TBR that ad technology revenue will grow over 300% by 2020, reaching $100 billion -- that is, net revenue all ad tech vendors are expected to make -- was an eye-opener. It says that the programmatic industry, which has seen exponential growth in recent years, is not expected to slow down through the end of the decade.

The growth is only possible if marketers continue to trust programmatic technologies with their budgets. It’s also only possible if programmatic technologies expand to new markets and marketers -- something that is happening.

Also in today’s edition of Real-Time Daily? iHeartMedia deciding to sell its broadcast radio inventory via programmatic, and Katz Media Group gearing up to launch an ad exchange to support further programmatic radio trading.

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Yesterday saw B2B marketers get custom programmatic ad technology, something they don’t have much of, and the TV industry has received its fair share of ad tech attention in recent months as well.

With all this expansion in mind, it’s not surprising to see TBR’s prediction that ad tech revenue will grow from $30 billion this year to $100 billion by 2020. Such growth would not be possible if “programmatic” was still synonymous with the open “real-time bidding” (RTB) of desktop display inventory.

For what it’s worth, not everything has gone programmatic. Last month, Pandora expanded programmatic sales to mobile in-app display (it had already been selling desktop display via programmatic), but the company will continue to sell its video interstitials and audio ads on a direct basis. A company representative told Real-Time Daily that Pandora is not opening that type of inventory up for programmatic sales because it doesn’t want to risk losing the “fidelity of the creative, because it’s such an intimate part of the user experience.”

With that said, even though companies like Pandora are still reserving some of their most valuable inventory for direct sales, they are helping incrementally expand the programmatic market nonetheless: Pandora may not be selling its audio inventory via programmatic today, but it’s still putting mobile in-app display ads on the market. And with 65 million of Pandora's 81-plus million monthly users using the mobile app, that's no small addition to the marketplace.

And as more devices come to the market -- such as the Apple Watch, set to launch later this month -- it opens more doors for programmatic advertising. In fact, some programmatic ad platforms are already set up to tap into Apple Watch inventory, and have been for months.

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