Aussie programmatic ad spend to pass $1.6bn next year, predicts Zenith
Over two thirds of Australian digital display ad spend will be bought through programmatic platforms by 2020, Zenith has predicted in its latest Programmatic Marketing Forecasts report.
In the report, Zenith claims programmatic will account for 67.2% of Australian digital display spend and have a 27% share of the overall local digital advertising market.
Zenith’s Nickie Scriven: ‘In Australia we anticipate that a number of new channels will be transacted programmatically’
Local programmatic spend has grown from $83.7m in 2012 to $1.74bn this year, with Zenith predicting by 2020 it will rise to $2.92bn, a 67% jump over this year.
Zenith’s predictions contradict those of SMI, which reported Australian agency spend on programmatic dropped back 1.2% last quarter to $97m with advertisers in sectors including health insurance advertisers, online retailers, lottery providers, universities, credit card groups and the analgesics market all reducing their spend.
SMI’s Australian managing director, Jane Ractliffe, wrote in Mumbrella last week the US programmatic spend by ad agencies appears to have peaked in 2015 when it dominated the digital media with a share of 27.2%.
Since then its share has been in decline, said SMI’s Ractliffe with the total falling to 27% in 2016, then 26% in 2017 and in the first half of this year its share is down to 24.7%.
Globally, Zenith claims advertisers will spend US$84bn programmatically next year, up from US$70bn this year, representing 62% of digital media expenditure. Zenith predicts in 2020 advertisers will spend US$98bn on programmatic advertising, representing 68% of digital media advertising spend.
Zenith cites the increased number of ad formats available through programmatic trading as one of the market’s drivers, with more mobile, video and audio formats coming online all the time.
Nickie Scriven, Zenith Australia CEO, said: “In Australia we anticipate that a number of new channels will be transacted programmatically, such as audio, radio and addressable TV, which is why we are seeing continued programmatic growth.
“The biggest change we will see in 2019 will be in the video space. The TV networks have been actively promoting addressable TV and catch up TV and, coupled with the launch of VOZ next year, we predict that a number of large TV advertisers will transact more of their online video programmatically.
“As TV and CTV become more connected, and first and second party data becomes more important and more widely used, the effectiveness of targeting will offset any technology and data costs. Programmatic will become the most efficient and effective way to buy media in the future.”
Globally, Zenith said the introduction of privacy legislation such as the EU’s GDPR has had some chilling effect by making certain data previously used in programmatic transactions unavailable, and making other data more costly to process.
“Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions,” said Benoit Cacheux, Zenith’s global head of digital and innovation.
“The scale of operational restructuring to make the most of it is both extensive and expensive, though, and advertisers are spending more carefully while they invest in infrastructure and data and review the quality of media. All programmatic advertisers need a strategy for acquiring the best and most comprehensive data available, and to treat this data as a vital corporate asset.”
“Technology is making programmatic advertising work harder for brands,” added Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence. “Artificial intelligence promises to unlock new understanding of customers as people, as well as improving the optimisation of the trading process.”
Questionable for an agency to claim experience or pedigree in the space with commentary like this.
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