Programmatic trading continues to grow -- exceeding $100 billion for the first time in 2019 and rising to $127 billion in 2020 and $147 billion in 2021, according to a new forecast from Publicis Groupe media agency Zenith.
Programmatic spend is increasing as a proportion of digital media spending, while the year-on-year growth of programmatic spend is slowing down. Programmatic ad spend will increase from 65% this year to 69% of all digital media globally in 2020, and eventually will top 72% in 2021.
At the same time, year-on-year growth is slowing -- falling from 35% in 2018 to 22% in 2019, and forecast at 19% in 2020 and 16% in 2021.
The programmatic industry faces challenges that need resolution before it can realize its true potential, explains Matt James, global brand president, Zenith.
“The ongoing death of the cookie means that the industry needs to rethink the way we design targeting and personalization while respecting consumers’ privacy rights,” he says. “High-quality, first-party data is more vital to the success of programmatic marketing than ever before.”
The U.S. is, by far, the largest programmatic market by ad spend, worth $67 billion this year -- accounting for 64% of all programmatic ad spend. Zenith predicts the U.S. will contribute 56% of new programmatic ad dollars in 2020.
China lags behind in second place, spending $10 billion on programmatic in 2019, although it will rise 41% to reach $16 billion by 2021. The UK comes in third with $7 billion.
The UK and the U.S. are the most advanced programmatic markets in terms of share of digital media, where respectively, 87% and 82% of digital media will trade programmatically in 2019. By 2021, Denmark, France and Germany will join them in having more than 80% of digital media trade programmatically.
“Although programmatic ad spend continues to grow at double-digit rates, it is being hindered as the industry struggles with privacy and supply-chain challenges,” said Jonathan Barnard, head of forecasting, Zenith. “Once these challenges have been addressed, programmatic marketing has the potential to accelerate again during the next decade.”
Zenith defines digital media as all forms of paid-for advertising within online content, including banners, online video and social media, but excluding paid search and classified advertising.