Marketers Predict More Consolidation for Programmatic Tech Ecosystem - eMarketer

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Marketers Predict More Consolidation for Programmatic Tech Ecosystem

Many expect industry shakeup as advertisers desire more streamlined options

September 28, 2016

Programmatic advertising continues to take up an ever-greater share of US advertisers' display budgets. In fact, eMarketer forecasts the transaction method will be behind more than two-thirds of digital display ad spending in 2016, or just over $22 billion in advertising. As the advertising industry focuses more attention and dollars on programmatic, how might the technology companies serve the programmatic sector evolve in the future?

Digital Marketers Worldwide Who Expect the Number of Programmatic Technologies Companies to Increase vs. Decrease, by Type, June 2016 (% of respondents)

Based on an examination of the programmatic tech ecosystem conducted by ExchangeWire Research and BidSwitch, many of the tech vendors that have capitalized on the transaction method’ current spending boom may face a growing trend towards consolidation.

More than half of digital marketing professionals from Europe, the US and Asia-Pacific said they expected the number of programmatic supply-side platforms (SSPs), demand-side platforms (DSPs) and exchanges serving the market to decrease. Eighty percent said that the number of programmatic ad networks would decrease as well.

At the same time that the number of “generalist” programmatic tech vendors is predicted to shrink, the number of third-party specialist vendors focusing on disciplines like analytics and fraud prevention, as well as data management platforms (DMPs), is expected to continue growing. Around three-quarters of digital marketing professionals in ExchangeWire’s survey expected these more-focused branches of the programmatic ecosystem to increase in number in the years to come.

One factor that may be driving marketers’ predictions of more programmatic technology consolidation is that the on-boarding time needed to work with new partners can take several months. Three in five respondents, or more, from all regions said establishing programmatic tech partnerships can take up to six months.

This lengthy partnership process appears to contrast with the rapid-fire nature of programmatic buying and selling that typically gets marketers interested in the first place. In this sense, marketers’ desire for more consolidation may represent a growing desire by many to streamline the process and achieve great scalability moving forward.

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