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Programmatic remains primary digital growth engine, some clouds forming

For all the industry debate surrounding its potential for fraud, lack of brand safety, and other unsavory outcomes, programmatic media buying continues to represent a significant engine of expansion for the digital media marketplace, according to year-end advertising forecasts released this morning by major ad agency forecasters.

“All three types of display have benefited from the transition to programmatic buying, which allows agencies to target audiences more efficiently and more effectively, with personalized creative,” Jonathan Barnard, head of forecasting and director of global intelligence at Publicis’ Zenith unit, states in his final 2017 update, presented this morning at UBS’ annual “Media Week” conference in New York City this morning.

By “display,” Barnard is referring to traditional display like online banner ads, as well as online video and social media. According to Barnard, the category as a whole will expand at an annual growth rate of 12% through 2020.

Barnard notes online video and social media within display are the “driving forces” of growth, with video set to expand at an annual rate of 17% and social at 16% through 2020.

While Interpublic’s Magna unit released a similar outlook for the role programmatic is playing in digital media ad spending expansion, its year-end update throws a yellow flag due to a combination of factors, especially Europe’s new GDPR regulations, which strengthen consumer data privacy rules in several markets.

“Programmatic and retargeting have enabled publishers to better monetize their impressions in the last few years, but new regulations like GDPR Directive in the European Union, coming into force in 2018, may make it easier for consumer to opt out from cookies and thus reduce the pool of consumer data that programmatic campaigns can reach and the volume of marketable programmatic impressions,” Vincent Letang, executive vice president-global market intelligence of Interpublic’s Magna unit,  says in his year-end update this morning.

“One bright spot for content providers and digital monetization is the return of ‘brand safety’ and brand relevance issues to the forefront in 2017,” he adds, concluding that, “Some brands have come to realize that the scale and efficiency brought in by large online properties or programmatic campaigns over hundreds of sites sometimes comes at the cost of editorial relevance, bringing undesirable associations with dubious editorial environments. That realization gives an opportunity to premium media brands in news, video and radio to reinforce the value of their own safe inventory.”

by  Joe Mandese
source: MediaPost