Programmatic buying and selling of online display-related advertising generated $10.1 billion in 2014, comprising 20% of last year’s overall internet advertising revenues ($49.5 billion) according to the first-ever IAB Programmatic Revenue Report, prepared by PwC US. This figure represents approximately 52% of display-related advertising in 2014 ($19.6 billion), while non-programmatic display-related revenues accounted for the remaining 48% at $9.4 billion.
As David Silverman, Emerging Company Services Practice Co-Leader of PwC, points out in the report, “over the last several years, publishers and advertisers have continued to adopt programmatic buying and selling of digital inventory into their media strategies; however, within the complex programmatic ecosystem there has been a lack of consensus around the definition of programmatic and its associated types and formats and the size of the programmatic market in comparison with the overall internet advertising market.”
For the purpose of this study, programmatic was defined, but not universally accepted, as “machine based buying and selling of digital media including auction based methods like RTB and private marketplaces as well as the automation of direct sales, sometimes called programmatic direct.”
Highlights from the IAB report include:
- Open auctions made up approximately 70% of the programmatic revenue in 2014.
- Display banner ads made up approximately 80% of programmatic revenues in 2014, but the findings demonstrate that mobile and video formats will take more of advertiser and publisher budgets and inventory over time
- Ad tech revenues represented approximately 55% of the programmatic revenue pie in 2014 and approximately 45% of programmatic revenues ultimately found its way to the publishers.
- The majority of programmatic inventory was bought and sold through Open Auctions, but the report predicts a shift to other types (i.e. Private Auction, Unreserved Fixed Rate or Automated Guaranteed) in the next few years.
- Programmatic revenues from ad tech outweighed those from publishers in 2014.
- Programmatic buying and selling are moving forward; however, sizing the programmatic industry will continue to be a challenge until standardization and increased transparency become more apparent.