Marketers don’t totally understand a form of ad buying that will account for more than half of the digital display ad spend in the U.S. this year.
That’s according to a new report from Forrester Research Inc. showing that programmatic ad buying isn’t well understood by many marketers. The term refers to systems that put available ad space on a web page up to bid as the page is loading in the viewer’s browser. Programmatic software takes into account what’s known about the website and the visitor to bid on the space, and the winning ad is loaded to the page, all in the milliseconds it takes the web page to load.
The Forrester report, “Media Buying Evolution Challenges Marketers,” finds that 41% of marketers say that they either are unaware of, or don’t have a clear understanding of, programmatic buying. Only 23% say that they understand programmatic buying and use it to execute campaigns. The remaining 36% say they understand it, but either haven’t used it, or need to learn more to apply it to their campaigns.
Despite many marketers’ lack of knowledge about programmatic ad buying, research firm eMarketer Inc. reports that U.S. advertisers will spend $14.88 billion on digital display ads via programmatic buying. That’s about 55% of total digital display ad buying this year. That spending is expected to jump to $20.41 billion next year, eMarketer projects, and that will account for 63% of total digital display ad spending.
In line with that growth, 28% of marketers say that they have expanded their in-house capabilities to manage, oversee or implement programmatic buying, and another 13% say they are evaluating whether to expand their in-house capabilities.
A large share of retailers and other marketers doing programmatic ad buying turn to vendors to handle the process for them. In fact, 43% of those buying ads this way say they use at least two demand side platforms, which allow a brands to target shoppers based on behavior, to do programmatic buying.
Among the reasons that marketers cite for using programmatic buying are that the technology optimizes the company’s ad buying in real time, offers better targeting, reduces costs and enables them to manage multiple channels.
While marketers can use programmatic buying to buy a number of different ad types, including, search, print and TV ads, they mainly use the technology to buy digital display ads, the Forrester report says. The following chart shows the percentage of marketers who have employed programmatic buying in various channels:
|
Ad format
advertisement
|
Percentage of marketers who have bought the ad format via programmatic buying |
|
Online display |
77% |
|
Online video
advertisement
|
41% |
|
Social |
36% |
|
Mobile
advertisement
|
36% |
|
Online search |
36% |
|
Television
advertisement
|
13% |
|
Digital place-based media |
10% |
|
advertisement
|
5% |
|
Outdoor |
3% |