• by Laurie Sullivan , Staff Writer @lauriesullivan, October 28, 2019

Digital advertising has a short history. This month marks the twenty-fifth anniversary of the first digital ad being served on Hotwired, now Wired.com, on October 27, 1994. 

Today, marketing and advertising executives are mostly focused on the amount of data collected, artificial intelligence, search algorithms that predict consumers' thoughts and behaviors, and video and display programmatic ad buying and selling.

After a slow start, U.S. programmatic ad spending is expected to reach $29.2 billion this year, according to eMarketer, rising to $34 billion by 2020. The data firm also estimates that U.S. digital video views will reach 240 million.

Marketers appear to have gained more confidence in programmatic video. Research shows confidence is led by an 11% decline in ad fraud in 2019 across the industry, compared with 2017, according to a recent report released by White Ops, a third-party fraud detection company.

All these point to an increase in budgets and confidence by marketers, according to a report from Chocolate. Since the third quarter of 2019, it measured 97.74% of its programmatic traffic as valid. Chocolate also points to an increase in adoption rates for ads.txt and app-ads.txt, along with TAG certification against fraud.

More brands have moved to server-side bidding -- about 33% -- and about 131 companies have adopted certain fraud checks. They also have implemented direct buyer, seller and intermediary ad fraud measurement services, according to the Chocolate's research.

The fourth-quarter report, published by Chocolate, covers insights from more than 157 billion programmatic video ad auctions during the second and third quarters of 2019 on the company’s platform.

The data sheds light on how programmatic video advertising continues to grow, and how in-app ads are driving the market. It calls out top advertiser and publisher categories, top video ad formats and data that marketers and programmatic buyers should consider when buying media.

The decline in ad fraud resulted in higher ad impressions and video ad spend. Ad impressions on Chocolate’s platform rose 46% and video ad spend rose by 33% in the third quarter, compared with the second quarter.  

Retail spent the most at 27%, followed by technology at 24%, CPG and FMCG at 18%, automotive at 9%, entertainment at 8%, and travel and leisure at 4%. Other came in at 10%.

Food and drink ranked as the top publisher category by percentage of ad auctions at 21%, followed by arts and entertainment at 11%, style and fashion at 9%, sports with 6%, news at 6%, science and technology with 5%, and travel at 4%.  

Chocolate found that 98% of programmatic inventory is in-app, and 92% video ad impressions served under 150 ms exceed industry benchmark for video ad latency. The overall video completion rate was 78%.

The top cities targeted by marketers include New York at 8%, Los Angeles at 6%, Chicago at 4%, Philadelphia at 3%, Washington, DC at 3%, Atlanta at 3%, and Dallas at 3%.