Whitepaper regarding trends in programmatic versus direct digital advertising

1. 1
WATCHING THE
GAP SHRINK
BETWEEN PROGRAMMATIC AND DIRECT

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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

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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 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

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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

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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%
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60%
70%
80%
Direct % V olume AdNet % V olume Pr ogrammatic % Volume

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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%
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60%
Direct % V olume AdNet % V olume Pr ogrammatic % Volume

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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
Gifts&
Occ.
Dating
Gam
ing
Fitness/
W
eightLossHom
e
&
Gar
den
Busines
sJobs&
Educatio
n
RealEstate
Softw
are
60
70
80
Average programmatic % of volume

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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.

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Adomic provides breakthrough transparency in digital advertising. The
Company’s patent-pending technology analyzes digital advertising
activity and delivers actionable intelligence to many of the world’s largest
advertisers, agencies, publishers and adtech providers. Adomic users
have a unique competitive advantage - real-time data covering more than
20,000 advertisers, 4,000 publishers, 200+ ad services, and 1.5 million
creative executions. By delivering on the promise of transparency in digital
advertising, we make business more efficient and more effective for all
industry players.
For more information or to schedule a demo, please contact:
Phil Lundeen
phil@adomic.com
424.262.2643
Adomic
1411 5th St., Ste 405
Santa Monica, CA 90401
(310) 382-1577
www.adomic.com
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