Dear Humans: 82.5% Of Display Ad Buys Are Now Done By Machines

From its early roots as a largely open bidding marketplace, the U.S. programmatic display ad marketplace has blossomed into a $46.55 billion arena comprised mostly of direct and/or "private" deals enabled by programmatic trading technology.

Those are the top lines of eMarketer's revised U.S. programmatic display advertising estimates and forecast, which show that so-called open RTB -- or auction-based real-time bidding -- now comprises less than a quarter of the total programmatic display advertising marketplace. Presumably, much of that goes to the "long-tail": smaller marketers and platforms optimizing, leveraging and "mopping up" display ad inventory not optimized by the more direct and controllable programmatic markets.

The eMarketer analysis shows two important patterns. One is that the programmatic marketplace has exploded as automation technology replaces human haggling in processing digital display advertising inventory.

The other, that the supply and demand sides of the business are largely negotiating the parameters of their programmatic deal-making before it hits the machines, either via "programmatic direct" -- the lion's share of all programmatic trading -- or via "private" markets that enable media traders and advertisers to leverage programmatic technology to structure real-time buys based on their pre-negotiated terms and criteria.

Perhaps the most remarkable insight to be gleaned from eMarketer's analysis is how small the actual "human" direct portion of the digital display ad marketplace has become. Just 17.5% of the digital display market is bought and sold directly through people. Presumably, those are the highest value deals, often involving creative, content and packaging that cannot be processed via programmatic technology.

“Significant momentum behind programmatic ad buying now focuses on its rich audience targeting capabilities,” eMarketer principal analyst Lauren Fisher says of the report's findings. “Buyers have come to rely on programmatic as the primary way to infuse their ad campaigns with first-, second- or third-party data insights.”

5 comments about "Dear Humans: 82.5% Of Display Ad Buys Are Now Done By Machines".
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  1. Donald Hinman from dhConsulting, April 9, 2018 at 11:41 a.m.

    Why is the larger dollar amount ($10.56B for Private Marketplace) a smaller percentage 19.7% than the small dollar amount of $8.99B in Open RTB represented as 22.7%?

  2. Joe Mandese from MediaPost, April 9, 2018 at 12:01 p.m.

    Sorry about that Donald, the wrong version of the graphic went out transposing the headings for the open RTB and Private Marketplace shares and totals. We've updated it and will publish a correction in the next edition. Thanks for pointing it out. -- Joe

  3. Donald Hinman from dhConsulting replied, April 9, 2018 at 12:12 p.m.

    Appreciate the correction.

  4. Jack Mollins from VerticalScope, April 9, 2018 at 12:56 p.m.

    Can you clarify what falls under Programmatic Direct?  Preferred Deals and Programmatic Guaranteed? If so, would be interesting to see a study of the number of PMP's set up versus PD.  In my experience it seems that advertisers seem to set up a ton more PMP's b/c it's relatively easy, but with no spend commitments, it makes sense more dollars flow through the PD pipes.

  5. Joe Mandese from MediaPost, April 9, 2018 at 1:30 p.m.

    @Jack Mollins: eMarketer's definition of Programmatic Direct includes "all programmatic ads that are transacted as blocks of inventory using a non-auction-based approach using an API."

    eMarketer's definition for private marketplace includes "ads transacted through an invitation-only-RTB auction where one publisher or a select group of publishers invite a select number of buyers to bid on its inventory."

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