Programmatic buying will account for $21 billion worth of spending on digital media in 2014, up 52% from last year, according to a new forecast from Magna Global.
The U.S. is spending the most via programmatic technologies with $10.9 billion worth of transactions.
As it asserts itself in the digital world, programmatic has not been embraced yet in the TV business. While some networks are at least testing selling digital video via computer, they are concerned that their premium television inventory will become a commodity and prices will fall as they have for digital display ads.
Magna says it expects programmatic buying to continue to grow at an annual rate of 27% and reach $53 billion by 2018. The growth is being fueled by the desire to cut transaction costs through automation, the agency says. Programmatic is also seen as a way for sellers to monetize more of their inventory, while it enables buyers to use big data to make campaigns more efficient.
The Magna figures include web banner, digital video and social media on both desktops and mobile devices. Social media is already predominantly traded programmatically, according to the agency. A smaller percentage of display and video is transacted via programmatic now, but by 2018 54% of display and 43% of video will be bought and sold the new way.
Magna says that there have been early developments in bringing programmatic buying to television and digital out-of-home media. While they have potential to grow, “these developments are still nascent and represent a very small percent of total spend,” the agency says, citing other research putting programmatic at less than 1% of TV in 2013, but growing to 20% by 2018 in the U.S.
Magna has been an early proponent of programmatic buying, establishing a goal of having 40% of its buying automated by 2016. It set up a consortium to study programmatic with media companies including A+E Networks, Cablevision, ESPN and Tribune.
Magna is part of Interpublic Group’s Mediabrands units, which buys $37 billion globally for its clients.
(Photo via Ervins Strauhmanis's Flickr. Image taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)
