Commentary
Programmatic's $10 Billion Milestone: Display First, TV Next
- by Tyler Loechner , Staff Writer @mp_tyler, July 21, 2015
Here’s a projection put into perspective: IPG Mediabrands’ Magna Global recently predicted that U.S. marketers will spend $10 billion of their TV ad
budgets through programmatic channels by 2019 -- including both audience-buying and household addressable.
For comparison, the Interactive Advertising Bureau (IAB) released its first-ever programmatic revenue report on Monday, revealing that U.S. marketers spent $10.1 billion through programmatic ad technologies this year in the digital display market.
In other words, what programmatic was to display in 2014, it will be to TV in 2019. There are some differences, sure -- $10.1 billion of digital spend in 2014 represented 52% of the display market, while $10 billion TV spend in 2019 will only represent about 17% of the television market -- but in terms of spend, we now have a benchmark (from the IAB) to compare to a projection (from IPG), and they line up perfectly.
Actually, the notion that today’s programmatic display would catch up to tomorrow’s programmatic TV at some point in the next five or so years has been around for a while. In an RTBlog last year, I wrote that what RTB was to online display advertising in 2013, programmatic would be to television in 2018. However, that comparison dealt with percentages, while this IAB-IPG link deals with hard spend numbers. Why that's important: 20% of spend in one market is not equal to 20% spend in another, but $10 billion is $10 billion both here and there.
So tuck this one away. Programmatic spend in the display market won’t hover around the $10 billion mark for much longer -- in fact, eMarketer is anticipating it to rise to $20 billion by 2016 -- but according to projections, you’ll experience déjà vu in a few years. How invested you feel in programmatic display today is how you’ll feel about programmatic TV in 2019.
Tyler Loechner is a MediaPost Reporter covering real-time, programmatic, RTB and more. You can reach Tyler at tyler@mediapost.com.
The question regarding all of these predictions about TV "programmatic" spending is whether the computers will really be making buying/selling decisions or whether they will be used mainly as support tools ---getting avails, processing data, placing orders, issuing trafficking instructions, etc. while the buyers and sellers operate more or less as before. I doubt that the former will be the case except for TV's equivilent of "remnant" space, distressed merchandise sales due to last minute cancellations, "long tail" networks which account for a very small amount of total usage, and marginal dayparts---like late, late night or early, early AM TV. In any event, we shall see...won't we.
And of course as Ed points out, we will see. Question is, by that time will anyone be paying attention? I'm still waiting for the "year of mobile." Now there's a "prediction" no one has ever bothered to check. I wonder why...? Back in the early 1970's, at Y&R, we were evaluating prospective TV buys using a computer-based system called "Cantel," but no genius had come forward to call it "programmatic." Pity.
Let's not forget Programmatic Digital Video which is growing roughly 50% year-over-year. Business practices have finally matured on the desktop but are still green in mobile and even greener in the new frontier of connected TV. Consistent with all emerging media spending, the dollars have not caught up with video consumption off the desktop...but they will. Once targeting and addressability can be normalized across all platforms then the future vision Brian speaks of will come into being with "VIDEO" buyers - not "TV" buyers or "Digital" buyers - effectively fostering coordinated programmatic video buying across linear TV, desktops & laptops, phones, tablets, smart TV's, OTT boxes, gaming platforms, wearables and possibly even digital place-based screens.