Most US Digital Video Ads Will Be Transacted Programmatically this Year

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Advertiser adoption of programmatic video has finally taken off, with 60.0% of US digital video ad spending expected to be transacted through programmatic channels this year. This will be a substantial increase from the 39.0% share programmatic video claimed in 2015, as explored in a new eMarketer report, “US Programmatic Ad Spending Forecast: Most Mobile Display and Video Ad Dollars to Be Automated by 2018” (eMarketer PRO customers only).

However, when one looks at the programmatic ad category in general, video’s share of total US programmatic digital display ad dollars is somewhat smaller (24.5%). This can be largely attributed to the limited supply of video ad inventory.

One of the main contributors to programmatic video ad spending growth is YouTube, which according to eMarketer’s latest estimates will reap nearly 21% of US digital video ad revenues in 2016. Within programmatic video, that share will be even larger, keeping in mind YouTube’s size and bullish adoption of programmatic advertising alongside video publishers’ historically tempered investment in programmatic.

Multiple factors will drive programmatic to account for nearly three-quarters of US video ad spending by 2018. For example, greater comfort with programmatic technology and audience-based selling will drive publishers to offer a greater portion of their inventory for purchase programmatically. As advertisers increase their demand for more audience-informed video ad buys, publishers must turn to programmatic to enable such data-driven capabilities. Increasingly, many are comfortable doing so, now that programmatic ad technologies have matured enough to allow them to strike deal types and guarantees that are both private and similar to traditional direct-sold agreements.

Additionally, as comfort grows, publishers will make available a greater portion—and a more premium portion—of their inventory to advertisers willing to pay more to reach the right audiences.

Overall, programmatic ad spending in the US is exceeding projections, and will continue to grow at double-digit rates for the next several years. According to eMarketer, this year, programmatic will account for 73.0% of all US digital display ad spending, a higher portion than previously estimated. Programmatic’s share will continue to climb over the next couple of years, reaching 82.0% of US digital display ad spending, or $37.88 billion, by 2018.

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