How big is programmatic advertising? It’s on track to be $20 billion big.
This once small piece of the ad industry—the automated buying and selling of digital ads—is set to double from this year’s $10 billion to $20 billion in 2016, according to eMarketer’s latest report.
These are the kinds of numbers you get when global companies like Mondelez International and smaller brands like Newcastle push more of their budgets to digital. Programmatic comes in many forms, including exchanges where ads are bought and sold in real time like stocks and direct buying where advertisers reserve inventory like the old days, only with better technology for targeted delivery and measurement.
The industry is at an inflection point where this year programmatic ad spending will rise 137 percent in the U.S., according to eMarketer. Also, next year mobile programmatic will top desktop programmatic for the first time. Here are the numbers:
- Mobile programmatic ad spending in the U.S. will hit $8.36 billion next year, surpassing desktop for the first time, which will haul in $6.62 billion.
- In fact, desktop spend will start to decline 3.9 percent in 2016 while mobile continues to grow, up 69.2 percent.
- As for the type of programmatic, real time bidding—the exchange model—is king right now, accounting for $9.25 billion of this year's $10 billion buying pie.
- Programmatic direct is growing much faster, however, up 850 percent this year to $800 million.
- By 2016, programmatic direct will be an $8.57 billion piece compared to $11.84 billion for real-time bidding.
- Also, private marketplaces are growing in the real-time bidding ecosystem, open exchanges still rule but the gap is closing. By 2016, open exchanges will handle 72 percent of programmatic buying, whereas it handles 88 percent today.
- Lastly, by 2016, $3.84 billion or 40 percent of all digital video ads in the U.S. will be bought programmatically.