By 2019 65% of all spend on advertising in digital media will be traded programmatically, despite clients airing ongoing concerns around issues like ad fraud, brand safety and transparency as well as headwinds from GDPR.
In line with the shift, Zenith’s latest programmatic marketing forecast anticipates that next year advertisers will spend $84bn programmatically, up from $70bn in 2018.
The US, where the FBI is currently looking into media buying practices, is the biggest programmatic spender. This year alone brands and their agencies will shell out $40.6bn on automated ads in 2018 – 58% of the total. Relative to its size, China is in second place but with a spend of $7.9bn expected before the year is out it’s lagging behind its competitors. For instance, the UK (a much smaller market comparatively) is set to spend $5.6bn in 2018, clocking in at third place.
North America is the region to have most embraced programmatic, with the US trading 83% of all digital programmatically this year and Canada 82%. 76% of the UK’s digital media buys are programmatic, Denmark follows in fourth place with 75%.
By 2020, programmatic advertising will account for more than 80% of digital media in all four markets. Globally it will account for 68%.
In all instances, digital media refers to all forms of paid-for advertising within online content, including video and social media. Search and classified advertising were excluded from Zenith’s study.
The figures show that despite grappling with monumental challenges like ad fraud, an issue the World Federation of Advertisers (WFA) expects to cost businesses $50bn by 2025, clients are still willing to funnel significant spend into programmatic.
Two of the world's biggest spenders, Unilever and P&G, have been vocal about navigating brand safety on platforms powered by algorithms like Instagram and YouTube. Despite improvements from social media giants, clients like Mars, Diageo and Sky continue to freeze spend on certain sites.
A recent study from CHEQ, IPG Mediabrands, BMW and Hulu found that serving ads against inappropriate content made customers seven-times less likely to consider that brand to be high quality, showing there's a lot at stake for brands who fail to get their brand safety strategy in order.
“Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions,” said Benoit Cacheux, Zenith’s global head of digital and innovation.
He added that the scale of operational restructuring to make the most of programmatic is both "extensive and expensive" and noted that advertisers were spending more carefully while they invest in infrastructure and data and review the quality of media.
"All programmatic advertisers need a strategy for acquiring the best and most comprehensive data available, and to treat this data as a vital corporate asset," he added.