BOSTON: Programmatic advertising will support 50% of mobile adspend by 2017, a study has claimed, as buyers expand their businesses and agencies shift more money into this space.
Mobile ad service Nexage analysed spending through its exchanges for its latest Analytics Report, distinguishing between real-time bidding (RTB), which automates transactions using auctions, and programmatic guaranteed, where buyers and sellers agree to a specific deal or a broader relationship "off network", but still transact on the exchange.
RTB, it said, was leading the charge, with bid volumes up by 515% in 2013, and its share of spend on the exchange improving from 26% in January to more than 60% in October.
Programmatic guaranteed was starting from a much lower base, but was predicted to account for more than 10% of expenditure by 2017.
"Programmatic will accelerate because of the mutual value accrued to all market principals - publishers, agencies, and advertisers," Victor Milligan, chief marketing officer at Nexage, told Warc.
Another metric indicating the growing level of demand for RTB was bid density, or the number of bids per impression, which had jumped by 215% during 2013.
A divergence in the growth rates of bid volume and bid density became apparent after the middle of this year, which coincided with the period when Nexage saw ad networks start to transition to RTB alongside online demand-side platforms (DSPs) and mobile DSPs.
It also noted that publishers were starting to move more premium inventory to programmatic. At the same time, they were using private exchanges, described by Nexage as "a configurable set of functionality that is tuned to the specific publisher's preferences and needs".
Nexage itself claimed revenue growth of 569% for its private exchanges during the third quarter of this year, and said CPM growth of 140% sent "a powerful signal" to publishers.
"Agency and advertiser initiatives to build mobile-specific capabilities and competencies will have a massive impact on their ability to exploit mobile and cross-channel campaigns," Milligan said.
"Key initiatives include building mobile-specific creative, building targeting and retargeting solutions from mobile identifiers, and helping shape and adopt an attribution environment that focuses on view-through versus the click."
Data sourced from Nexage; additional content by Warc staff