Programmatic is growing, and it’s also growing up.
That’s the message from the Magna Programmatic Growth Report released Friday.
Magna projects global programmatic spend to grow from $19 billion this year to $42 billion in 2020. Non-programmatic spend is expected to grow from $27 billion this year to $31 billion, with programmatic becoming the default global media-buying approach within the next two to three years.
“We’re seeing more indications of the programmatic space being a mature market,” Magna digital intelligence VP Luke Stillman, author of the report, told AdExchanger.
Advertisers used to view programmatic as tech useful primarily to target niche audiences or categories, but Magna data shows the buying method is now being used by everybody.
“The categories driving the big investments in media – financial, insurance, telco, auto – are now the biggest spenders in programmatic too, which is a shift,” Stillman said.
Other signs of programmatic maturity include the phasing out of legacy formats, notably desktop banner display (which constitutes 44% of all global programmatic buys but is projected to drop to 16% by 2020), and adoption of results-oriented campaign metrics.
Viewability and fraud issues – despite being talking points in the press – haven’t throttled programmatic spend.
“We expected to see more concerns over viewability or fraud, or for budgets to move to private marketplace transactions, but it seems like brands mostly brushed those concerns off,” Stillman said, pointing out that 2016 budgets outpaced Magna’s 2015 projections by a full point (a meaningful amount when accounting for tens of billions of dollars).
The programmatic boost in 2016 also came from big upward revisions for spending in China and Japan. For the Chinese market in particular, Stillman said, previously unrecorded revenue pools are becoming visible as more analyses and contacts are developed in the country.
China and Japan are also unique for their domestic tech and media environments.
“The big companies in US are the big companies in Europe, Australia, Canada and many other developed markets,” Stillman said. “But in China and Japan, we see the growth coming from their own SSPs, DSPs and ad tech environment.”
Stillman said Magna anticipates that in 2020 Japan and China will still feature their own ecosystems.
