The development of the global programmatic market and ecosystem in 2015 will be motivated by three key driving forces, a report by Magna Global highlighted. Firstly the programmatic ecosystem will be streamlined as fewer, but more comprehensive, ad tech partners will be used. Brands recognise the value of seamlessly integrating data, strategy, execution and analytics, and the ability to do so on an integrated platform is more possible than ever.
Secondly, data sets that can be used to both identify and target consumers will rise to preeminence. These are those that have pervasive login across multiple devices (Social, Email, dominant consumer services) and a 1:1 relationship with users rather than extrapolating based on samples.
Lastly, services that support the greatest number of formats and devices will be prioritised over specialised offerings. Ad tech platforms are increasingly unifying measurement between digital and TV as programmatic looks beyond its digital roots.
The report highlights that, programmatic is not only relevant to ‘remnant’ inventory and that it has seen an increase in the quality of supply in the last 18 months. This can be seen by the general rise of average programmatic CPMs globally in 2014: desktop display (banners) increased by 23 per cent and mobile display by eight per cent. This CPM increase is clearly driven by an influx of higher quality inventory (more premium environments and publishers, better placements, higher viewability) into programmatic platforms rather than price inflation for like-for-like inventory, the report suggests.
CPM levels in each market are highly correlated with the level of development of the programmatic market as a higher share of inventory (and inventory higher up the value chain) is available for programmatic purchase, according to the report. In video, however, there are some standout markets like Australia and the UK where digital video is extremely prominent in the digital landscape.
Besides digital media, other ‘traditional’ media categories are being affected by data-driven, automated buying methods, the report highlights. Programmatic TV (audience buying and household addressability) will grow from representing four per cent of TV budgets this year to 17 per cent of TV budgets by 2019.
Programmatic CPMs increased in 2014 as average inventory quality increases. This trend will continue as publishers grow more comfortable offering inventory programmatically. As an increasing volume of brand advertising is done programmatically, this CPM change is expected to accelerate.