UK spend on programmatic up 23% in 2017
According to the latest forecast by eMarketer, spending on programmatic ads have showed strong growth in the UK, despite a stream of negative press.
According to the date, by the end of the year advertisers will have spent an estimated £3.39 billion on programmatic trading. This is a 23.5% rise from the year before. Programmatic spend now equates to 79% of all UK digital ad spend.
eMarketer predicts that this proportion will continue rising to 84% by 2019.
Mobile is still the main force driving the growth of programmatic in the UK, currently making up 78% of the total 2017 programmatic display ad spending. This growth, however, is balanced by the continuing decline for desktop. 22% of programmatic spend went to desktop in 2017 (around £743 million), with a predicted fall to 13.5%, or £609 million, in 2019.
“The programmatic ecosystem is growing because it’s maturing,” eMarketer senior analyst Bill Fisher said.
“This maturation is leading to better practices, better behaviour and better transparency. Making everybody in the chain accountable is the next step in cleaning up programmatic’s image further. For example, the recent Ads.txt initiative from IAB Tech Lab is one such step. This tool essentially allows publishers to publicly declare the companies they authorize to sell their digital inventory.”
The continued growth in programmatic spend comes amidst a range of issues surrounding trust and the potential for fraud. Marketers have to balance these risks against the siginifcant benefits that the medium can bring them, namely more targeted and effective ads that seek out the right audience, at the right time, right across the web.
QueryClick interviewed 150 heads of marketing at major UK brands and found that 70% were planning to match or increase their programmatic spend over the next year. This was despite the fact that 41% said that they had lost trust in the format due to the risk of becoming victims of advertising fraud.
“Recent studies have put the cost of digital advertising fraud as high as $31 billion in the US alone. That makes digital ad fraud not just more costly than any form of cybercrime, but more costly than offline crimes such as counterfeit goods and payment card fraud,” QueryClick managing director, Chris Liversidge, said.
“Technology may also be a driver of fraud. The large agencies that buy up the digital ad space also own most of the ad buying platforms (DSPs) whose weaknesses and lack of transparency enable fraud to continue. Many in fact offer minimal to no reporting on individual ad buys, only offering rolled-up reporting which obscures where any particular ad was shown. It would seem advertisers are waking up to this however. Nine out of ten brands to us that they believe the lack of transparency in their programmatic ad campaigns is because the ad buying platform is owned by their advertising agency.”
Other figures that emerged from the QueryClick survey show that 40% of the major advertisers reported being confident that more than half of their online ads were being seen by people. However, only 7% thought that the proportion viewed by humans rather than bots was 80% or more.
“Many brands operate in sectors where they are under pressure to perform in volatile market conditions and competition is rife such as eCommerce, travel and finance,” continued Liversidge.
“If they can solve their programmatic problems, there is an opportunity for these brands to out-compete much larger incumbent brands with lower marketing spends.
“They can also take steps to protect themselves. First, where possible, they should separate their programmatic campaigns so they are given the consideration – and performance measures – their growing size warrants. Secondly, they should unbundle their agency relationship from the programmatic platform, to enable them to seek out independent providers that offer true transparency and protection from the risks of current programmatic campaigns.”
85% of respondents thought that that trade bodies such as the IAB should have greater powers to monitor and penalize those that knowingly commit ad fraud.
“There will be more initiatives to come, and as they come online, greater levels of trust will be placed in trading digital display inventory via programmatic pipes,” said Fisher.