When it comes to mobile advertising, programmatic buying is one of the most sought after approaches. Be it real-time bidding or direct, programmatic buying is gaining popularity due to efficiency and transparency it brings to ad inventory buying, especially from a cost perspective. However it's not to say that programmatic will completely replace other approaches, but it will definitely supplement or augment the channels of buying ad inventory on mobile.
We believe that it will become a preferred way of buying and selling ad inventory in the immediate future. However, before we get there, let's look at some of the trends that are driving the programmatic buying space today:
- The amount of global ad inventory bought and sold using programmatic methods in 2015 is estimated to have risen by 49% compared to 2014, reaching USD 14.2 billion globally, according to Magna Global an Interpublic Group media investment unit.
- It was also estimated that programmatic buying will grow at an average rate of 31% annually over the next four years, reaching USD 36.8 billion by 2019.
- Display ads continue to be one of the popular ad formats, but video is also catching up from a programmatic buying perspective. Worldwide share of programmatic spend on digital display banner and video were estimated to grow from 24% in 2014 to 31% in 2015. This figure is projected to reach 50% by 2019.
- Much of social media ad inventory is today sold and bought programmatically. Display and video ads which started off with relatively slower adoption rates will reach adoption rates of 54% and 43% respectively by 2018.
- Real-time bidding has gone on to become the most preferred way of programmatic buying as it brings ad inventory that helps advertisers get the maximum value out of their mobile marketing efforts. It is estimated that Real Time programmatic represented 81% of total programmatic spend in 2015, with most transactions occurring on open exchanges or through invite-only exchanges with additional constraints but ultimately auction-based pricing.
The primary reason that programmatic methods are catching on among advertisers is the fact that programmatic brings both scale and cost-effectiveness. Much of the buying and selling is automated, thus reducing the transaction costs on both sides, while throwing open a much larger inventory pool for advertisers to bid for or to buy.
Furthermore, programmatic buying is a smarter way of buying inventory as programmatic lets advertisers leverage in-house data about their consumers to precisely reach out and engage their target audience via the right ad inventory, thus avoiding any wastage and maximizing returns on their investment. So if you're a marketer considering programmatic, there could not be a better time to hop onto the programmatic bandwagon.