As per the Zenith Report, 69% of digital media will trade programmatically by 2020. The total expenditure for programmatic trading is set to exceed $US100 billion for the first time in 2019, reaching up to US$106 billion by this year-end, rise to $US127 billion in 2020, touch $US147 billion in 2021, expecting 72% of digital media to be programmatic by 2021.
Expansion of programmatic ad expenditure is slowing, falling from 35% in 2018 to 22% in 2019, with the forecasted growth of 19% in 2020 and 16% in 2021. The programmatic industry combats challenges that need resolution before publishers, marketers, and consumers realize the true potential.
Balancing personalization and privacy is challenging. The primary challenge is to develop new processes and technologies that better balance consumers’ need for privacy with the benefits of personalization and targeting. GDPR in the EU has made forms of personal data unavailable. The California Consumer Privacy Act (CCPA) planned to be enacted by January, making the issue worse. Meanwhile, a few browsers are blocking the third-party cookies that programmatic advertising relied upon for insights, measurement, targeting, and retargeting.
Read More: The Digital Advertising World Post the Demise of Third-Party Cookies
The death of the cookie means that the industry has to rethink the way they design targeted and personalized campaigns while respecting consumers’ privacy rights. First-party, high-quality data is more vital to the success of programmatic marketing than before. Businesses need to focus on cleaning up the supply path. Multiple ad tech entities play a role in the supply path between publishers and brands, providing unknown value and charging fees due to their lack of transparency.
As third-party data becomes less efficient and more commoditized, brands are stepping up, the collection of first-party data provided by consumers or produced indirectly by activities on websites, CRM programs, and other brand-owned sources. This provides a true competitive advantage since first-party data is unique to each brand.
It is essential to connect CDPs to other sources of data for a holistic view of each customer and continually measure performance delivering right people-based marketing. Increased use of CDPs and first-party data, in combination with other assets, will make programmatic marketing even more effective and attract higher levels of investment from brands.
Although programmatic ad expenditure continues to grow at double-digit rates, it is hindered as the industry struggles with privacy and associated supply-chain challenges. Once these challenges get addressed, programmatic marketing has the potential to accelerate again during the next decade.
