NEW YORK: Up to half of all media dollars are likely to be spent on programmatic or automated ads within the next two years, according to an industry panel at New York's Advertising Week.
The heads of leading agency trading desks indicated that the share of expenditure taken by this category now stands at around 5%. All expected this figure would rise over the next two years, although their exact predictions ranged from totals of 7% to 50%.
"Programmatic is critical," said Michael Brunick, senior VP, programmatic, at Magna Global, in remarks reported by Advertising Age.
"We are starting to spend more money with fewer bigger and better partners. That gives us leverage," he added.
And as the digital world continues to grow, ads will show up in more places. "We need to use programmatic and technology to do that," observed Brunick.
There are internal agency hurdles to overcome, too, before programmatic buying can become truly effective. One problem is that holding company trading desks and individual agencies within holding groups are often buying media from the same vendor via different means.
"We don't want to have two conversations," said Paul Dolan, senior VP, global business development at WPP subsidiary Xaxis.
"We have one proprietary data platform that covers the entire digital media plan," he added. "We decide which parts are integrated sponsorship and which can be more audience-based."
Havas Media approached the same issue from a different angle. "We have a direct relationship between the trading desk and agency," said Adam Kasper, its chief media officer.
He also explained that publishers were creating a relationship with Havas teams. "Those needs are communicated to our trading group who's setting up those direct deals," he said.
And the panel was generally welcoming of AOL's recent programmatic upfront, at which it announced a series of deals with advertising agencies that had made commitments to buying these ads in 2014. Most, however, felt it would be more useful to integrate this into the traditional upfront season earlier in the year.
Warc reported in more detail on AOL's use of programmatic in a report from ad:tech San Francsico. And a full report from Advertising Week will be available on Warc.com soon.
Data sourced from Advertising Age; additional content by Warc staff