In 2020, 69 per cent of all digital media will trade programmatically, up from 65 per cent this year, according to Zenith’s Programmatic Marketing Forecasts 2019.

The total amount spent programmatically will exceed US$100 billion for the first time in 2019, reaching US$106 billion by the end of the year, and will rise to US$127 billion in 2020 and US$147 billion in 2021, when 72 per cent of digital media will be programmatic.

Expansion of programmatic adspend is slowing, falling from 35 per cent in 2018 to 22 per cent in 2019, and forecast at 19 per cent in 2020 and 16 per cent in 2021. The programmatic industry faces challenges that need resolution before marketers, publishers and consumers realise its true potential, Zenith said.

“Although programmatic adspend continues to grow at double-digit rates, it is being hindered as the industry struggles with privacy and supply-chain challenges,” said Jonathan Barnard, Zenith’s Head of Forecasting.

“Once these challenges have been addressed, programmatic marketing has the potential to accelerate again during the next decade.”

Programmatic marketing by country

In Australia, 55 per cent of all digital media was traded programmatically in 2019, fuelling the overall digital market growth. Zenith expects this growth to continue into 2020 with video expected to be a driver as more inventory is made programmatically available every day across growing consumption channels like Connected TV.

Conversely, direct buys will reduce in share as economic and marketing cost pressures continue, reach and frequency, and engagement efficiencies will need to be found through a strategic mix of programmatic buying across guaranteed, private marketplaces and open auction solutions, the report found.

“The main driver of programmatic uptake in the future will be the rollout of 5G. As online user experience improves, the availability and range of formats will emerge, pushing up programmatic adoption,” said Joshua Lee, Head of Digital, Zenith Melbourne.

“As programmatic continues to develop beyond online display ads to channels like DOOH, audio, Connected TV, and more, media buyers will get a holistic life cycle view of the user which is key to delivering fewer ads that are more effective.”

According to the report, the UK and the US are the most advanced programmatic markets in share of digital media, where respectively, 87 per cent and 82 per cent of digital media will trade programmatically in 2019. By 2021, Denmark, France and Germany will join them in having more than 80 per cent of digital media trade programmatically.

The US is by far the largest programmatic market by adspend, worth US$67bn this year, accounting for 64 per cent of all programmatic adspend, and responsible for most of the growth. The US is forecast to contribute 56 per cent of new programmatic ad dollars in 2020.

China is second with US$10bn in 2019, followed by the UK with US$7bn. Programmatic trading will account for only 30 per cent of digital media adspend in China this year, but Zenith forecasts it to rise to 41 per cent in 2021, when its programmatic spending will reach US$16bn.

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