55% of Australia’s digital media this year was programmatic, but growth will be hindered by privacy and supply chain concerns

In Australia, 55% of digital media was traded programmatically this year, according to Zenith, which released its programmatic marketing forecast today.

Globally, 69% of media will be programmatic next year, up from 65% this year, according to the forecast, while the amount spent programmatically will surpass US$100bn for the first time this year.

That figure will rise to US$106bn by the end of the year, US$127bn in 2020, and US$147bn in 2021, when 72% of digital media will be programmatic, Zenith said.

The agency expects Australia’s programmatic growth to continue into 2020, with video expected to help this growth, as more inventory is made available programmatically through technology like connected TVs. Direct buys will reduce in share, Zenith said, as economic and marketing cost pressures continue.

“The main driver of programmatic uptake in the future will be the rollout of 5G,” said Zenith Melbourne’s head of digital, Joshua Lee.

“As online user experience improves, the availability and range of formats will emerge, pushing up programmatic adoption.

“As programmatic continues to develop beyond online display ads to channels like  digital OOH, audio, connected TV, and more, media buyers will get a holistic life cycle view of the user which is key to delivering fewer ads that are more effective.”

Zenith’s Lee

The US and UK are the most advanced programmatic markets, where 82% and 87% of digital media, respectively, will be programmatic this year. The US market is worth US$67bn this year, accounting for 64% of all programmatic spend.

However, despite the growth of programmatic, it faces challenges that need to be addressed, including privacy concerns. For example, some browsers are blocking third-party cookies, which programmatic traditionally relied on for measurement, insights, targeting, and retargeting.

“The ongoing death of the cookie means that the industry needs to rethink the way we design targeting and personalisation while respecting consumers’ privacy rights,” said the agency’s global brand president, Matt James.

“High-quality, first-party data is more vital to the success of programmatic marketing than ever before.”

The murky supply chain, which was examined in the Australian Competition and Consumer Commission’s (ACCC) Digital Platforms Inquiry, is also of ongoing concern. If the government accepts the ACCC’s recommendation to conduct an inquiry into the media agency industry, this scrutiny will only continue.

The ACCC Digital Platform Final Report was handed down in July

“Brands and buyers should review every platform they contract with, to ensure they contribute to campaign goals transparently and effectively,” said Benoit Cacheux, Zenith’s global chief digital officer.

“They should end their relationship with platforms that do not.”

Head of forecasting, Jonathan Barnard, added that cleaning up these issues will allow programmatic’s growth to accelerate further.

“Although programmatic adspend continues to grow at double-digit rates, it is being hindered as the industry struggles with privacy and supply-chain challenges,” Barnard said.

“Once these challenges have been addressed, programmatic marketing has the potential to accelerate again during the next decade.”


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