Home Online Advertising Zenith Forecasts Slower Programmatic Media Growth As Data Costs Go Up

Zenith Forecasts Slower Programmatic Media Growth As Data Costs Go Up


Global programmatic advertising will grow by more than $13 billion next year and the year after, but its growth rate has stalled and it’s making slower-than-expected headway in taking share from non-programmatic media, according to Zenith’s 2018 Programmatic Marketing Forecast published Monday.

Programmatic display advertising will clear $70.2 billion this year, according to the report, $13.7 billion more than last year. But next year’s forecasted growth of $13.6 billion is relatively lackluster, considering the expected momentum behind programmatic.

Zenith was once cautiously optimistic that, by the end of its five-year forecast, digital display advertising in many markets would be entirely programmatic, said Jonathan Bernard, the company’s head of forecasting. But now only Canada could feasibly be fully programmatic and Zenith is walking back its growth forecast for programmatic’s share of digital.

Data, infrastructure and other peripheral considerations like brand safety, viewability and ad verification increase costs associated with buying online media – but that money isn’t going to ads. Hence, the slowdown in actual programmatic media spend, Bernard said.

While it’s more difficult to accurately measure these additional costs compared to surveying ad spend, Bernard believes they will be important for media mix reviews, because they make programmatic activations more effective.

“It can be quite expensive and a major overhaul for a marketer to reorganize internal business practices and to make sure there’s high-level education and acceptance of programmatic trading,” he said. But demonstrating quality and ROI will help pave the way for programmatic to earn more of the overall media pie.

The slowdown in programmatic media can be a tough trend for some agencies, which historically make their money on media margins and not by bringing data to the table. Bernard said it’s also hard for agencies to compete for the talent that’s driving programmatic transitions at big brands or tech-first companies.

“It’s a change of activity and for some agencies it can be a tough change,” he said.

He added, however, that the agencies winning new business are often doing so based on improvements in areas like online transparency and contextual targeting.

Must Read

Advertible Makes Its Case To SSPs For Running Native Channel Extensions

Companies like TripleLift that created the programmatic native category are now in their awkward tween years. Cue Advertible, a “native-as-a-service” programmatic vendor, as put by co-founder and CEO Tom Anderson.

Mozilla acquires Anonym

Mozilla Acquires Anonym, A Privacy Tech Startup Founded By Two Top Former Meta Execs

Two years after leaving Meta to launch their own privacy-focused ad measurement startup in 2022, Graham Mudd and Brad Smallwood have sold their company to Mozilla.

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.

Albertsons Takes Its First Steps Into Non-Endemic Advertising, Retail Media’s Next Frontier

Albertsons is taking that first step into non-endemic advertising next week via a partnership with Rokt to serve ads to people who have already purchased groceries.