Direct and Private Marketplaces Take Increasing Share of Programmatic

Concerns over transparency and brand safety are driving an increasing number of advertisers to seek more control when buying ads programmatically, according to eMarketer.

That, coupled with advertisers’ growing desire to leverage first-party data, is pushing buyers away from the open markets toward more private setups. By 2020 more than four of every five dollars US advertisers invest in programmatic advertising will go to either programmatic direct deals or private marketplaces (PMPs) and not the open markets.

In 2018, programmatic direct in the US will reach $27.47 billion, accounting for 58% of all programmatic display spending, according to eMarketer’s latest US programmatic forecast. Growth in social advertising (a category that largely contributes to programmatic direct ad spend) and the continued shifting of dollars toward more automated direct deals will help keep investment in programmatic direct high throughout the forecast period.

“An ongoing concern for many buyers and sellers is transparency, both in terms of supply chain quality and how dollars are allocated,“ eMarketer principal analyst Lauren Fisher said. “These concerns are not deterring most from buying programmatically. We mainly see marketers redirecting dollars away from the open markets toward more private, controlled setups. As these shifts occur, some marketers are testing the waters by bringing their programmatic efforts in-house. Others are simply forcing their partners and agencies to be more accountable for their ad spend.“

Real-time bidding (RTB), a category that includes both open marketplace and PMP spending, will account for 42% of all US programmatic display spending, or nearly $20 billion, in 2018. Within RTB, spending in PMPs will surpass open exchange spend in 2020.

“Advertisers will continue to favor the use of PMPs to activate coveted first-party data and other premium audience data that they refuse to release into the open markets,“ Fisher said. “PMPs are a primary vehicle for enabling that audience data, all without having to commit to guarantees or upfront deals.“

Total programmatic ad spending in the US this year will grow more than 30% to $47.37 billion. By 2020, US advertisers will transact nearly $69 billion in US digital display ad spending programmatically, accounting for more than 86% of the digital display pie.