Programmatic Ad Spend Growing Three Times As Fast As Nonprogrammatic.

Targeted display and banner ads are by far the largest digital revenue generator for local media, studies from Borrell Associates have consistently shown. Now a new report from Insider Intelligence/eMarketer shows programmatic ad buying in the display marketplace will outpace nonprogrammatic in 2024 – by a lot.

Programmatic display ad spending will grow three times as fast (15.9%) as nonprogrammatic (5.3%) in 2024. Drawn to its flexibility and fluidity, advertisers will transact more than 9 in 10 of their display ad dollars programmatically this year. “Challenges introduced by automation – including ad fraud and algorithmic bias – are far outweighed by the benefits,” the eMarketer report says. “Programmatic offers agility in spending cadence and channel mix and is often favored by smaller advertisers who lack the resources to negotiate directly with publishers.”

The phase-out of third-party tracking cookies is a major hurdle confronting digital advertisers in 2024 but it won’t change their preferred transaction methods and devices, eMarketer says, while mobile will keep its sizable lead over device categories.

Meanwhile, the open ad exchange is continuing its long descent. When eMarketer started forecasting open ad exchange spending in 2013, it represented nearly three quarters (74.5%) of the programmatic display market. But in less than a decade, the open exchange went from the most to least popular transaction method, falling to just 13.2% in 2020 while programmatic direct climbed from 24.0% in 2013 to 72.9% in 2020. This occurred as advertisers invested more in private marketplaces and closed ecosystems, like social media platforms, retail media networks, and private audio marketplaces under what’s known as programmatic direct.

At the same time, programmatic is refocusing around first party data. Six in 10 buyers reported they’d be focusing somewhat or significantly more on ad placements with publishers with first party data in 2024, according to November 2023 survey data from the Interactive Advertising Bureau.

As third-party cookies are phased out, media sellers’ first-party data is growing in importance. But some media platforms are keeping it under wraps and these so-called walled gardens represent the majority of programmatic display ad spending. While walled gardens’ share of programmatic ad spending peaked in 2020, advertisers will still spend about $2.50 with them for every $1 they invest in the open web.

Read the Insider/Intelligence/eMarketer Programmatic Ad Spending Forecast 2024 HERE.