The amount of money spent on programmatic advertising will grow faster than all other digital channels next year, and is set to become the main digital ad trading method by the end of this year, according to new research.
The prediction, from Zenith, covers 41 key advertising markets, estimates that programmatic will grow 31% in 2017, while social media will increase by 25% and online video by 20%.
Programmatic Advertising refers to the automated buying and selling of digital advertising, where advertisers set parameters about their desired audience targets and ads are bought automatically based on these criteria.
This year, programmatic is expected to become the principal method of trading digital, accounting for 51% of expenditure. This is forecast to rise to 58% in 2017.
Programmatic accounted for just 13% of display adspend in 2012. Since then, adspend has increased from US$5 billion to US$39 billion in 2016 – an average rate of 71% a year.
While growth is slowing down as it consolidates its dominance of the display market, Zenith expects programmatic advertising to grow at an average of 28% a year to 2018, when it will reach $64bn.
“Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets,” said Benoit Cacheux, Zenith’s global head of digital and innovation.
“We believe that the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments – especially private market places – and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”
The US is the biggest programmatic ad market by a long distance, worth $24bn in 2016 and accounting for 62% of total global programmatic adspend.
The UK comes second, worth $3.3bn, and China third, worth $2.6bn. Programmatic trading accounts for 70% of display in the US and the UK, but only 23% in China.