Programmatic is taking over the digital advertising world, and at an even faster rate than expected, according to eMarketer, which raised its forecast for programmatic ad spending in the U.S. on the back of growth in mobile and video programmatic buys.
This year, programmatic will account for nearly three-quarters of display ad spending to reach more than $25 billion, several billion dollars more than it had anticipated previously.
While some publishers, like Vice CEO Shane Smith, aren’t fans of programmatic, according to eMarketer senior analyst Lauren Fisher, “Publishers are becoming more comfortable with programmatic technology, and therefore more willing and able to package audiences in this manner. That has accelerated spending in mobile and other formats that have traditionally shied away from programmatic, such as video.”
Mobile spend in particular is growing rapidly and will continue to do so for at least the next several years. Already, it has surpassed desktop programmatic spend, and this year, eMarketer sees it expanding by more than 65% to account for over $17 billion of the $25 billion spent on programmatic in total. By next year, eMarketer believes mobile programmatic will represent 75% of total spend.
Video programmatic spend is also growing at a rapid pace, doubling this year alone to more than $6 billion. What’s more, eMarketer says that programmatic will account for well over half of all video ad spend by the end of the year. According to Fisher, “As technology makes it easier and safer for brand advertisers to pursue their TV audiences into digital video, programmatic will emerge as the smartest, most precise method of doing so.”
Good news for Facebook
Programmatic’s growth is particularly good news for Facebook, which eMarketer anticipates will be the biggest beneficiary of the increased spend. By eMarketer’s estimates, over the next two years, Facebook will capture upwards of 40% of programmatic spend, representing more than $11 billion in revenue. By contrast, its arch rival, Google, will be the second biggest beneficiary, taking in a much more modest 9% of the market, representing approximately $2.3 billion in revenue.
The gap between Facebook and Google could, however, widen even more than expected. For example, Facebook just announced that it will be entering the header bidding market, a move aimed at bolstering its share of mobile programmatic dollars. Few saw Facebook’s entrance into the header bidding market coming, and if it is successful, it could turn header bidding into a much bigger thorn in Google’s side in short order.
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