That means advertisers are expected to spend US$84bn on programmatic next year, up from US$70bn in 2018, with further growth forecast in 2020 when advertisers are predicted to spend US$98bn on programmatic advertising.
By 2020, programmatic is expected to account for 68% of digital media advertising, which Zenith defined as all forms of paid-for advertising within online content, including video and social media, but excluding paid search and classified ads.
However, as programmatic consolidates its position as the most important method of digital trading, Zenith noted that its growth rate is slowing – from 32% in 2017 to 24% in 2018, before dropping further to 19% in 2019 and 17% growth in 2020.
The main reason, Zenith said, is because advertisers are investing more in infrastructure and data to make their programmatic activity more effective, although the European Union’s General Data Protection Regulation (GDPR) is likely also to have had an impact.
Currently, the US is by far the largest market, accounting for 58% of global programmatic spending, or US$40.6bn, followed distantly by China and the UK at US$7.9bn and $5.6bn respectively.
As well as being the leader in dollar terms, the US is also the top market for the proportion of programmatic trades (83%) compared with overall digital media spend.
Canada ranks slightly behind the US at 82%, followed by the UK (76%) and Denmark (75%) – and all four markets are expected to see programmatic advertising account for more than 80% of digital media by 2020.
By then, nearly all (99%) digital media will be traded programmatically in Canada, and Zenith said it expects all markets to follow Canada’s lead and eventually use programmatic trading for all digital media transactions.
Commenting on the findings, Benoit Cacheux, Zenith’s global head of digital and innovation, said: “Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions.
“The scale of operational restructuring to make the most of it is both extensive and expensive, though, and advertisers are spending more carefully while they invest in infrastructure and data and review the quality of media.
“All programmatic advertisers need a strategy for acquiring the best and most comprehensive data available, and to treat this data as a vital corporate asset.”
Sourced from Zenith; additional content by WARC staff