Programmatic spend forecast at $60B as majors buy in to ad tech

By Jim O'Neill on Mar 16 2015 at 8:00 AM
Programmatic spend forecast at $60B as majors buy in to ad tech

Major media companies increasingly have adopted programmatic advertising, according to a recent study from RBC Capital Markets, which forecasts ad spending processed using the technology could reach $60 billion by 2017.

RBC said programmatic is becoming increasingly popular with nearly one-quarter (22%) of brands and media companies saying they will “significantly” increase their programmatic ad spend, driven by the need to leverage mobile and video advertising.

“We believe overall awareness and adoption of programmatic advertising will continue to rise,” wrote RBC analyst Rohit Kulkarni in the report. “As incremental dollars start flowing through this channel, we think technological and cultural improvement will lead to structural changes in the ecosystem.”

Kulkarni said he believes advertisers will see “incremental evidence of 'premium’ or ‘high-value’ inventory flowing through programmatic channels,” and posits that the trend will continue, “as Programmatic moves up the stack.”

Sorosh Tavakoli, SVP of Ad tech for Ooyala, said the evolution of programmatic into a major tool for brands and publishers isn't a surprise.

"Looking back at programmatic advertising in five years will make all of this seem as such a natural evolution of our industry," he said. "Programmatic advertising brings significant opportunities for both buyers and sellers of advertising and these are the years when we build and implement technology while getting the right business models and processes figured out."

The report said programmatic has successfully navigated through an initial proof of concept phase associated with selling “remnant” or “low-value.”

RBC sad its survey also found respondents believe programmatic advertising is becoming more effective, saying 13% say ROI from programmatic has “dramatically improved” in the past 6 months, with nearly half saying programmatic ROI had “improved.”

Still, 34% of the marketers, agency execs, marketing consultants and media companies survey say they don’t currently use programmatic, compared to 8% that say they spend more than 20% of their marketing budget using programmatic, and 15% that say they spend 10-20% of their budget programmatically.

The RBC study was based on 1,200 surveys.

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