INSIGHT | 10 Stats To Know…Programmatic

Not sure what to make of programmatic? 10 key stats for 2015 that help size the industry, explore the advertiser-publisher ecosystem and confirm the +31% cost-per-click premium publishers can achieve when using PMPs (Private Marketplaces).

1. Programmatic revenues totaled $10.1 billion in 2014 comprising approximately 20% of total internet advertising revenues ($49.5 billion), inclusive of mobile and comprised a majority of display related revenues. – PWC

2. Display banner ads made up approximately 80% of programmatic revenues in 2014, but we expect more advertisers and publishers will shift their budgets and inventory toward mobile and video formats over time. – PWC

3. Ad-tech companies’ revenue comprised about 55% of the programmatic total last year, while publishers collected 45%, according to the study. “Ad-tech companies” in this case includes all industry players that make money from programmatic buying and selling before the revenue gets to publishers, including agency trading desks and a range of technology companies that facilitate sales for publishers and buys for marketers. – AdAge

4. Open auction marketplaces fueled 70% of programmatic revenue in 2014, while invitation-only auction, unreserved fixed-rate and automated-guaranteed markets collectively accounted for the other 30%. – AdAge

5. Ironically, as much as 65 cents of every advertising dollar may be lost to process inefficiencies in a system designed to make digital display advertising cheaper and more effective. – CMO

6. According to a recent Chango Programmatic Advertising Pulse survey, almost 75 percent of marketers report using programmatic. Half of the remaining 25 percent indicated they would be using it “in the near future.” Nearly 33 percent of users had less than a year’s experience, explaining, “Best practices have yet to emerge in the management of programmatic efforts.” – CMO

Programmatic Ecosystem

7. Let’s begin with a hypothetical $100,000. The agency receives a fee that can vary by contract but should not exceed 5 percent. As much as 40 percent is captured by the ATDs. The DSP typically takes a contractually agreed-to fee, approximately 10 percent. Data costs, exchanges, and supply-side providers (SSPs) eat another 10 percent, leaving $35,000 for actual publisher spend. – CMO

8. In the UK, online ad viewability fell to 49% in Q2 2015, a 7% decline from 2014, according to research by Meetrics. Viewability in the UK is lower than in Germany (64%) and France (62%) where programmatic is less dominant. Anant Joshi, Meetrics’s director of international business, commented: “It’s certainly less transparent than buying directly. There’s also a big question mark about the quality of much of the inventory sold in this way and, clearly, that most of it never ends up being seen”. – ExchangeWire

9. According to an eMarketer report there were almost 146 million mobile shoppers in the US last year, an increase of 23 million over 2013. Although purchases on smartphones and tablets do not yet match in-store buys, they are growing. And even when purchases are not made on the phone, consumers research products using this platform. Recent research found that more than 40% of Americans believe the mobile is “the most important resource in their purchase process”.

Related to its efficacy on mobile, is programmatic’s use of location-based advertising. The Interactive Advertising Bureau has dubbed this technique “the new cookie in digital advertising currency.” Programmatic can use location-based data to target customers when they’re close to a bricks and mortar store and facilitate interaction and engagement with apps to provide customers with in-store offers and other valuable information such as opening hours and product availability. – BrandRepublic’s WallBlog

10. The [Adform] report also demonstrated that the average CPC (cost per-click) publishers can charge in private marketplaces, or PMPs, (where they invite selected advertisers to bid on preferred inventory) is 31 per cent higher on average than in open auctions.

Martin Stockfleth Larsen, chief marketing officer at Adform, said: “Both advertisers and publishers are embracing the advances of the industry in terms of innovative brand formats and PMPs, and are executing increasingly sophisticated campaigns that drive excellent results. Programmatic is taking root in every country in the region.” – The Drum

Karen Blackett, The Guardian

But we are also in the era of programmatic advertising, video online and mobile being used in the marketing mix. Understanding which technology, which platform and what content to use, and in what context is key. Hence, media agencies are recruiting different but complementary talents – content experts from production and film backgrounds, those with robotic degrees and cutting edge data analysts, all working as a seamless, integrated team. This has been key to our evolution.
– MediaCom’s Karen Blackett in the Guardian

@AdAge: IAB Study: Programmatic Revenue Exceeds $10 Billion, but Industry Still Confused
@cmo_com: The Promise–And Peril–Of Programmatic Display Advertising
@PWC: IAB Programmatic Revenue Report 2014 Results
@exchangewire: UK Ad Viewability Falls Below 50%; US Programmatic Spend Reaches Record $10.1bn
@TheWallBlogUK: How can UK retailers grab a slice of the programmatic pie?
@TheDrum: Programmatic surges but viewability rates in decline
@Guardian: The future is programmatic but eclectic talent is still key to transforming brands

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