2014: The Year of Programmatic
The Association of National Advertisers (ANA) declared ‘programmatic’ as the marketing word of the year for 2014. Surveying its members, the association discovered that marketers had woken up to the potential of programmatic.
Does it follow that 2014 was the year of programmatic? Let’s look at the trends in digital advertising, and the driving forces behind them:
Online ad revenue is growing at unprecedented rates. In December 2014, the IAB and PwC reported that online ad revenue reached a historic high of $12.4 billion in Q3 2014, up 17% from Q3 2013, and was on pace to top an impressive $50 billion in 2014. What’s fueling that growth?
Nearly 90% of US digital advertising spend comes in two formats: search and display. Although search continues to represent the lion’s share, the gap has been shrinking. In its report titled “US Ad Spending – Q4 2014 Complete Forecast”, eMarketer estimates that display will overtake search beginning in 2015.
We ran two campaigns targeting government and military veterans in Q4 which was entirely incremental business and those campaigns saw some of the highest engagement rates according to our client. Without the ability to target our audience in the OpenX dashboard we would not have been allocated the incremental budget from the client.
OpenX, which operates the first, and one of the largest real-time exchanges, has seen this explosive growth first hand. For instance, ad spend increased nearly 65% from Q2 2013 to Q2 2014, and more than 80% from Q3 2013 to Q3 2014. Much of this growth can be attributed to early adopter sectors:
|Sector||Q3 YoY Growth|
Additionally, programmatic mobile advertising is coming into its own, with spending experiencing a growth rate that’s 5x higher than overall programmatic display. We have observed the same trend on the supply side: mobile ad requests accounted for nearly 30% of total ad requests in Q3 2014 – triple what they were in the same period last year. Also, ad requests from mobile apps grew more than 5x faster than ad requests from mobile Web.
We believe this growth points to a significant trend: now that we see sufficient scale for mobile campaigns in the ad exchanges, brands will be relying on programmatic to launch cross-screen campaigns.
So was 2014 the year of programmatic? Given that marketers and publishers are still universally talking about programmatic — coupled with its explosive growth in both display overall and mobile — it’s fair to say that people will still be talking about programmatic well into 2015 and beyond.