Despite concerns about programmatic advertising fraud and questions about the lack of transparency in the programmatic system, almost all digital advertising in Canada will be bought programmatically in just two years, according to Zenith’s new Programmatic Marketing Forecasts.
“We expect all markets to follow Canada and use programmatic trading for all digital media transactions eventually,” Zenith stated in a release. “Indeed, it’s only a matter of time before programmatic trading becomes the default method of trading for all media.”
- Zenith says Canada has embraced programmatic more than every market but the U.S., with 82% of all digital media being traded programmatically this year, behind only the U.S. where it’s 83%. Zenith defines digital media as all paid advertising online, including video and social, but excluding search.
- But by 2020, the Canadian digital ad market will be almost entirely programmatic (99%) according to Zenith.
- The total global programmatic ad market will hit $84 billion next year, about 62% of all digital media, expected to rise to $98 billion, 68% of all digital media by 2020.
While programmatic has undergone strong growth in recent years ($84 billion next year is up from $70 billion this year), Zenith says growth is slowing. Not because of questions about the efficacy of the system, but because it has become cemented its position as “the most important method of digital trading.”
Earlier this year, WARC revealed that of the estimated US$63.4 billion that brands spent on programmatic in 2017, just 27% made it to working media. An estimated 12% was lost to fraud, and 55% went to so-called “tech tax”—the complex web of ad tech intermediaries that have grown up between marketer and publisher, each taking a percentage of the marketers budget.
In terms of making improvements to the programmatic system, Zenith has a suggestion for clients: “advertisers have to reorganise internally to give programmatic trading the high-level support and understanding it needs. Agencies can only extract maximum effectiveness from their programmatic strategy in a proper partnership with their clients. And a programmatic strategy can only ever be as effective as the data used to execute it.”