As More Money Pours Into Programmatic, How is it Being Spent?

Transparency, quality, ad tax. Anyone working in the programmatic pond today knows the open exchange is riddled with challenges. Yet, from 2017 to 2018, U.S. investments in programmatic have increased by $10 billion, with a projected annual spend of $46 billion by the end of the year. Despite the challenges, buyers and sellers are continuing to invest their spend into programmatic. The question is: where in programmatic are they spending it?

Buyers and sellers are taking matters into their own hands. In lieu of relying on the open auction system, the two sides of the marketplace are putting their spend into private marketplace (PMPs) and programmatic direct transactions.

Seemingly more reliable, the shift in spend has had immediate advantages and disadvantages for both parties. For buyers, the shift in spend provides more transparency and reduced ad tax, but less available inventory and higher CPM prices. For sellers, PMPs and direct transactions can pull higher CPMs from quality buyers, but can lead to trouble in hitting performance KPIs and achieving scale.

Regardless of the challenges, one thing is clear: programmatic is not going anywhere. eMarketer estimates that 82.5% of U.S. digital display ads will be purchased via automated channels in 2018.

Buyers and sellers are becoming increasingly bold with their programmatic purchasing as they learn to navigate a constantly changing system. Find out more about where the industry is headed in our whitepaper, Pricing Programmatic: An Analysis of Digital Ad Marketplace Trends.

 

Pricing Programmatic Trends

 

 

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