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Programmatic Advertising: Watching the Gap Shrink
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Programmatic Advertising: Watching the Gap Shrink

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In the past year brands, publishers and the press have fully seized upon the benefits of programmatic advertising. From AOL’s Programmatic Upfront event at Advertising Week to the IAB standardizing …

In the past year brands, publishers and the press have fully seized upon the benefits of programmatic advertising. From AOL’s Programmatic Upfront event at Advertising Week to the IAB standardizing programmatic terminology, 2013 has truly been the year of programmatic. We at Adomic have been eyewitnesses to this trend as we gather unique information about the advertising ecosystem across the roughly top 4,000 publishers on the internet. In this report we have gathered together highlights of our data from 2013 which speak to the impact these trends have had on both advertisers and publishers.

For full download, please visit our website [link in profile] or adomic.com/data.

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  • 1. 1 WATCHING THE GAP SHRINK BETWEEN PROGRAMMATIC AND DIRECT
  • 2. 2 03 Overview 04 Programmatic usage by top 1000 advertisers 05 Programmatic usage by top 500 publishers 06 Programmatic usage by top 3000 publishers 07 Top Programmatic Verticals 09 Methodology
  • 3. 3 In the past year brands, publishers and the press have fully seized upon the benefits of programmatic advertising. From AOL’s Programmatic Upfront event at Advertising Week to the IAB standardizing programmatic terminology, 2013 has truly been the year of programmatic. We at Adomic have been eyewitnesses to this trend as we gather unique information about the advertising ecosystem across the roughly top 4,000 publishers on the internet. In this report we have gathered together highlights of our data from 2013 which speak to the impact these trends have had on both advertisers and publishers. Key findings: • Advertisers moved significant volumes to programmatic in 2013, bringing direct and programmatic impressions to roughly equivalent volumes. • Publishers from the largest to the long tail saw programmatic replace a significant share of their direct sold volumes in 2013. • Top categories using programmatic were still primarily direct response focused, including gifts & occasions, dating and gaming. Overview
  • 4. 4 The chart below plots direct vs. programmatic and ad network volumes since August 2012. We see programmatic increasing in volume from 28% of delivery in December of 2012 to 36% in December 2013. • At the start of the period, advertisers strongly favored direct over programmatic channels (43% vs. 31%) • By holiday season 2013 programmatic and direct were roughly equivalent, with most of programmatic’s gain coming at the expense of direct sold impressions • Ad networks also saw a gain in late 2012/early 2013, but their volume slowly decreased during the remainder of 2013 Programmatic usage by top 1000 advertisers
  • 5. 5 The following chart plots direct, programmatic, and ad network impression volumes on average across the top 500 publishers over the last one and a half years. • The top 500 publishers are a very interesting group as they contain the largest direct sales teams, however even this premium group saw a roughly 8% decrease in the volume of direct sold impressions since December of 2012. • Programmatic appears to be the beneficiary of all of this lost direct volume with programmatic increasing roughly 9% in the same time period. However, even at year end there is still a large gap between direct at 53% of volume and programmatic at 31% of volume, highlighting that large publishers are holding back a significant portion of their inventory for directly sold campaigns. Programmatic usage by top 500 publishers 50% 40% 30% 20% 10% 0% 8.1.12 9.1.12 10.1.12 11.1.12 12.1.12 1.1.13 2.1.13 3.1.13 4.1.13 5.1.13 6.1.13 7.1.13 8.1.13 9.1.13 10.1.13 11.1.13 12.1.13 60% 70% 80% Direct % Volume AdNet % Volume Programmatic % Volume
  • 6. 6 The following chart plots direct, programmatic, ad network impression volumes on average across the top 3000 publishers over the last one and a half years. • When looking at the top 3,000 publishers, we see average direct sales take a precipitous drop from 55% in December of 2012 to 41% in December of 2013. • As we saw with the top 500 publishers, this decrease in volume is taken up almost exclusively by programmatic, which posts a large increase from 29% in December 2012 to 40% in December 2013. • The largest increase in programmatic volume appears to have happened between December of 2012 and January of 2013 with a 6% jump over just one month. • Ad network volume across this time period shows a slight uptick from 16% to 19% on average. Programmatic usage by top 3000 publishers 50% 40% 30% 20% 10% 0% 8.1.12 9.1.12 10.1.12 11.1.12 12.1.12 1.1.13 2.1.13 3.1.13 4.1.13 5.1.13 6.1.13 7.1.13 8.1.13 9.1.13 10.1.13 11.1.13 12.1.13 60% Direct % Volume AdNet % Volume Programmatic % Volume
  • 7. 7 While programmatic has shown impressive gains in the last year, adoption has not been uniform by all advertisers. Below we are the verticals that used programmatic the most as a percentage of their volume among the top 1,000 advertisers in 2013. • Top users of programmatic in 2013 include many direct response categories (Gifts & Occasions, Dating, Fitness & Weight Loss, etc.) This is no surprise as programmatic is very well suited to optimizing ROI for direct response advertisers. Top Programmatic Verticals 50 40 30 20 10 0 G ifts & O cc. Dating G am ing Fitness /W eightLossH om e & G arden BusinessJobs & Education RealEstate Softw are 60 70 80 Average programmatic % of volume
  • 8. 8 Methodology Adomic uses intelligent crawlers to sample the display ads shown on top publishers. These intelligent crawlers utilize patent pending PathSourcetm technology to decipher the delivery method for each impression served (direct, programmatic, ad network.) The charts and tables presented in this report are based on Adomic’s sample of publishers from August 1, 2012 to December 31, 2013. Definitions Programmatic - Impressions delivered through automated placement or optimization. More specifically impressions delivered through: DSPs, SSPs, Exchanges, Trading Desks (VivaKi, Accuen, etc.), and the Google Stack (GDN, AdX, etc) Ad Network - Impressions delivered through entities that identify themselves as ad networks. (Collective Media, Adconion, Advertising. com, etc.) Note that many ad networks use programmatic technology to source and deliver their impressions, however for the purposes of this report those impressions were included in the Ad Network counts.