There’s a new C-level job on the horizon — the chief programmatic officer. Here are three key skills the CPO will need to influence the board room. The New York Times, AOL, Meredith and The Washington Post – what do each of these media companies have in common? Within the past year, all have hired top executives as(…)
The Programmatic Advertising Report: Mobile, Video, and Real-Time Bidding Will Catapult Programmatic Ad Spend
Programmatic platforms are on pace to fundamentally reshape the entire digital advertising landscape.
These platforms are automating much of the ad buying and selling process and increasing the accuracy of execution. Programmatic technologies are helping ad buyers find the right audience at the right price at the right time.
Here are some of the key takeaways from the report:
- Programmatic and real-time bidding (RTB) ad spend is growing fast. RTB will account for over $18.2 billion of U.S. digital ad sales in 2018, up from just $3.1 billion in 2013, growing at a compound annual growth rate of 42%.
- Mobile and video ads will be a major driver of this growth, with RTB sales for these formats topping $6.8 billion and $3.9 billion in 2018, respectively.
A number of companies are already cashing in on the growing programmatic market. Top programmatic ad companies include Criteo, Rocket Fuel, the Rubicon Project, and AOL. These four companies pulled in more than $1.5 billion in combined global ad revenue in 2013, accounting for more than one-tenth of global programmatic ad dollars.
- Prices for programmatic ads are increasing for almost all ad types, as demand outpaces supply. The effective cost per thousand impressions (eCPM) for social ads was up by 64% between January through April 2014, compared to the same time period one year earlier, according to Turn.
- There are still a number of barriers to adoption. Top barriers include brand worries that they will lose control over where their ads will appear, internal resistance at ad agencies, and lack of transparency in the industry over methods and results.
Nanigans CEO Ric Calvillo talks to a lot of ad-tech analysts. Every time he asks them what the biggest disruption in the advertising technology space is, they say RTB, or real-time bidding.
But that’s actually much smaller than another, much bigger phenomenon, one that potentially threatens the entire ad industry.
“RTB is only $4-5 billion,” says Calvillo, referring to the exchanges that sell millions of ads per minute in hyper-efficient automated bidding mini-wars for real-time ad delivery via the web or mobile apps. “The online global ad market is about $100 billion … and between Google, Doubleclick, YouTube, and Facebook, direct-to-client ad sales via self-serve total about $20 billion.”
“So 20 percent of the market has been sucked out of the ecosystem.”
The ecosystem Calvillo is talking about, of course, is the ad-reselling ecosystem, which is increasingly occupied by a sometimes-bewildering mix of third parties that are middle-men between advertisers and publishers: supply-side networks, demand-side networks, ad resellers, real-time exchanges, and hundreds of specialist companies occupying dozens of niches in the big market of creating demand and selling stuff.
Real-time bidding is a new and dynamic way to buy online media. Through an automated process, media buyers can evaluate, bid on and purchase ad inventory on an impression-by-impression basis. With real-time bidding, media buyers can drive meaningful one-to-one connections to consumers with greater scale and efficiency. Every time an impression is available, the advertising(…)