Nearly one in five dollars invested in programmatic advertising goes to waste. Industry research indicates that some 15 percent of spending ends up in the pockets of publishers of so-called
, characterized by low quality, often automatically generated content, and poor user experience.
While not yet confirmed in the US, a study from the UK has also shown that some three percent of the revenue cannot be attributed to any known stakeholder in the programmatic supply chain, pointing to a gap that could easily be an issue across many countries. Despite these losses, programmatic keeps increasing its market share.
Overwhelming popularity
Adoption of programmatic advertising (automated buying, selling, placement, and optimization of ad space) is already very high in the United States. What is more, over 60 percent of U.S. advertisers are planning to
increase their programmatic investments in 2024.
Programmatic ad spend in the U.S. is on track to surpass 264 billion U.S. dollars and 80 percent of the U.S. digital advertising expenditure in 2024. The country has the
largest programmatic ad market worldwide and accounts for 40 percent of the global spending.
Leading ad formats
Survey data further indicated that online and mobile would be the
most invested-in programmatic ad media in 2024 with 60 percent of executives expecting most online and mobile inventory to be purchased that way. A format garnering more and more attention from programmatic advertisers is connected TV (CTV). In 2023,
CTV programmatic ad spend reached 21.5 billion dollars , roughly a third of U.S. linear TV ad revenues. Another rising star of the programmatic ecosystem is digital out-of-home (DOOH). A 2023 global survey revealed that nearly two-thirds of
marketers acquired DOOH campaigns programmatically, with three out of 10 exclusively purchasing digital outdoor media in that manner.
Upcoming changes
In the U.S., the
top marketing automation solution providers are Hubspot, Adobe Experience Cloud, and Oracle Marketing Cloud, which held a combined market share of nearly 50 percent in 2023. To keep their strong position, they will need to keep their clients happy in the turbulent times that are approaching. Most U.S. media professionals agreed that the deprecation of third-party cookies will be the top
digital media challenge in the future. After all, targeting individual consumers based on their browsing behavior will no longer be an option after Google phases out third-party cookies on its Chrome browser in 2024. However, as of late 2023, less than one in three programmatic teams in the U.S.
had a working addressable cookieless solution. Among replacement possibilities, first-party data activation, attention-based metrics, and social media targeting hold the greatest promise in replacing cookies, according to industry professionals.
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