programmatic-advertising-300x177MAGNA GLOBAL’s latest industry forecasts show that the fastest growing segment of media buying isn’t necessarily a medium, but a method: programmatic. After analyzing the media transaction in over 35 countries, MAGNA estimates that $21 billion will be transacted programmatically this year (up 52% compared to 2013), $9.3 billion of which will be through real-time bidding (RTB) methods.

With an average annual growth rate of 27%, total programmatic spend could reach $53 billion by the year 2018. The main drivers behind this growth include the reduced transaction costs for advertisers and publishers, the opportunity to monetize the “long tail” media impressions and the ability to leverage “big data” at scale to improve the efficiency of ad campaigns.

According to the report, “by 2018, only the most premium digital inventory (sponsorship, full episode video, non-standard formats) will still be transacted through traditional mechanisms.” Adoption of programmatic has been boosted by large verticals (CPG, automotive and pharmaceutical) and direct-response marketing (real estate, dating, gaming, and education).

By format, banner display currently accounts for the largest portion of programmatic spend, representing 72% of the total. However, it is estimated that by 2019, this will decrease to 31% as programmatic video and social media continually increase their market share.

The report concludes that programmatic buying methods have the potential to move beyond internet media and affect trading mechanisms in other electronically-served media categories, including developments in television and digital out-of-home. Currently, these developments are still nascent and represent a very small percent of total spend.

Read the full report here.