Programmatic trading accounted for £500m of advertisers £1.86bn display spend in UK last year, says first ever IAB programmatic audit

A total 28 per cent of the UK display ad market was traded programmatically in 2013, representing £500m of the total £1.86bn display advertising spend, according to the Internet Advertising Bureau’s (IAB) first Media Owner Sales Techniques Study.

The industry body has predicted this will rise further throughout the rest of 2014, with nearly half (47 per cent) of digital display ad sales to be conducted programmatically, in what marks its first ever report in the space.

By 2017 it could account for an even bigger chunk of ad spend, with the IAB predicting it could reach up to 75 per cent of total digital display advertising by that time.

In 2013 almost £3 in every £10 spent on online display ads were bought via programmatic technologies, according to the study, which was conducted by research and strategy consultancy MTM on behalf of the IAB.

The study has revealed that direct sales between publishers and advertisers accounted for over half (51 per cent) of UK digital display ads sales, while over a fifth (22 per cent) were bought via ad networks.

Meanwhile programmatic trading, the method in which display ads are bought and sold using automated systems such as real-time bidding, has proven to be more dominant in mobile than video, according to the report.

The release of the report marks a major step in the overall need to quantify the market. IAB UK’s director of research & strategy Tim Elkington said: “Prior to this new research there was no reliable way to evaluate how big a role programmatic plays in the display market so it was time to put a stake in the ground and give the industry accurate numbers.

“It’s important the industry understands how the market is split as it enables all those involved – media owners, advertisers and agencies – to take advantage of the exciting opportunities programmatic presents.”

Programmatic trading of digital display rises from 28 per cent to 37 per cent (£170m) when mobile is factored in, dwarfing the use of this method for internet video at 16 (£40m) per cent.

Elkington added: “Programmatic is more dominant on mobile due to various factors; it’s a more fragmented ecosystem and, being relatively harder to monetise, has enabled a wide range of intermediaries to develop more quickly, particularly having learned lessons from serving ads programmatically on PCs.”

The figures’ release follow the recent news of major brands including Mondelez and Procter & Gamble (P&G) pledging huge investment in programmatic trading. P&G has revealed it plans to buy 70 per cent of all its digital ads programmatically by the end of the year, while Mondelez is also pushing hard into programmatic trading for video.

At Cannes International Festival of Creativity last week Mondelez VP of media and consumer engagement Bonin Bough spoke on a TubeMogul panel where he said he wished he could dedicate 100 per cent of its digital advertising spent to programmatic trading methods.

MTM's figures are based on detailed submissions from 23 companies, including the Financial Times, Channel 4, Google, Disney, News UK, and agencies, supplemented by a further 35 in-depth interviews and group discussions with industry participants.

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