As programmatic evolves it will include more inventory, such as digital out-of-home, radio and TV. Agencies are experimenting in these areas but often don’t report spend, Barnard said.
China shows the most potential for growth. Programmatic only accounts for 23% of ad spend, or 16.4 billion yuan. The buying method will grow 30% year on year through 2018, reaching 28.6 billion yuan. Roughly 56 billion yuan will still be spent traditionally, according to Zenith.
“There’s still a huge amount of room for growth, especially now that China is the second-largest advertising market in the world,” Barnard said. “They’ve adopted the technique later, but they're on the same path. Given that it’s already been trodden on they can probably catch up even quicker.”
But for programmatic to take hold in China, internet giants Baidu, Tencent and Alibaba will have to open up more inventory and loosen their monopolies on data. These platforms will likely embrace programmatic as it becomes mainstream, Barnard said.
“I would expect them to realize that programmatic is not a threat to their revenue streams,” he said. “It can help them. Every country where programmatic has arisen, publishers and platforms have been worried about it initially but since found that it can work for them commercially.”
Beyond the US, UK, Canada, Israel, Denmark and the Netherlands, programmatic accounts for less than 40% of ad spend in global markets. Markets with high potential for growth include Australia (27% programmatic), Singapore (12% programmatic) and Hong Kong (40% programmatic).
As programmatic becomes table stakes, agency buyers are getting savvier at using the method across their organizations. Holding companies like Publicis Groupe (which owns Zenith) are going through massive reorganizations to embed programmatic expertise throughout their agencies, rather than centralizing it as a siloed expertise.
“You have to have the right people who know what they’re doing, not just in programmatic silos, but across the whole staff,” Barnard said. “Everyone needs to understand programmatic to buy media these days.”