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Programmatic is the new norm for display ad spend, as UK budgets near £2.5bn

Research firm eMarketer claims the media industry has already reached the tipping point in terms of programmatic media trading in its first break-out of the UK media sector, which also notes that mobile is now the dominant platform in display ad spend.

Programmatic display ad spending will near the £2.5bn mark next year, accounting for 70 per cent of total UK media budgets spent on the ad format, as mobile overtakes desktop to account for over half of total display ad spend, according to the study.

The forecast, to be featured in its upcoming report, entitled Automated Trading Dominates Digital Display Ad Spending, claims programmatic display ad growth will maintain its double-digit growth of 2015 (66.2 per cent to hit £1.8bn) into the following year when it will hit £2.46bn (see chart).

The report goes on to note how this year marks the tipping point when programmatic will become the norm for how display ad space is bought and sold for the first time, driven by both media buyers’ and owners’ willingness to embrace automated trading.

Bill Fisher, an analyst at eMarketer, notes how earlier hesitation among both sides of the media industry is now being replaced by an appreciation of the benefits that such a means of trading can offer. He added: “It hasn't been an easy journey, but initial trepidation is being replaced with a realisation that programmatic can deliver the inventory, partners and prices that marketers want.”

The path to programmatic becoming the default means of trading such media formats in the UK has been one fraught with difficulty, as marketers have often fretted over issues around transparency, such as ad viewability, click fraud, and issues around mark-ups on the cost of media.

Meanwhile, media owners have often struggled with the disruption posed by the use of the technology, as media buyers were often more willing to embrace the use of such technologies, with the net-effect being the commoditisation of their inventory in the early stages of the introduction of programmatic media trading.

Elsewhere, the report notes how – as with most aspects of the digital marketing sector – programmatic is increasingly influenced by mobile, with 2015 the first year that the proportion of total UK programmatic display ad spending on mobile platforms surpassing desktop's share.

The research outfit goes on to forecast that 56.1 per cent of UK programmatic display ad spending will go toward mobile this year, with desktop/laptop responsible for the remaining 43.9 per cent (see chart).

It also goes on to note how the amount of mobile display ad spend being traded programmatically in the UK is set to reach 68.0 per cent in 2015 and rise to 75.5 per cent next year.