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Programmatic Joins the UK Digital Advertising Mix

Programmatic buying of digital display ads rises in importance

December 12, 2014

eMarketer expects digital to account for nearly half of all UK ad spending in 2014, with growth tracking well above outlays on other media. Mobile investment will underpin most of this growth, and programmatic buying will play an increasingly important role in how those ads—and digital ads in general—are placed, according to a new eMarketer report, “State of UK Digital Advertising: In the Digital Mix, Mobile Means the Most.”

Programmatic Buying and Real-Time Bidding (RTB) Digital Display Ad Spending in Select Countries, 2014 & 2018 (millions)

With UK display ad spending seeing good growth—eMarketer estimates 23.7% this year—it’s perhaps unsurprising to see programmatic ad spend recording a rise, too. However, this uplift has been quite remarkable, albeit from a very small base due to programmatic buying’s relative newness.

A March 2014 report from the International Data Corporation (IDC) forecast that UK “premium” programmatic digital display ad spending—programmatic deals involving premium inventory—would rise by 622.0% this year to $32.0 million, furthering the UK’s status as Europe’s single biggest market for premium programmatic ad spending.

IDC’s forecast was quite narrowly focused, looking at only premium opportunities. A wider measure from August 2014 by Socintel360—not restricted to premium placements—indicated that the UK programmatic ad market would be the third largest in the world based on the countries tracked. The source estimated nearly $1.82 billion of UK digital display advertising would be traded programmatically this year.

As with most things in the digital ad space, mobile has a hand to play in programmatic, too. Data released in June 2014 by the UK’s Internet Advertising Bureau UK indicated that programmatic placements—either sold direct or through exchanges—accounted for 28% of UK digital display advertising in 2013. For mobile, that portion was even larger, at 37%.

Barriers to Using Programmatic Advertising According to Marketing Professionals in the EU-5, March 2014 (% of respondents)

But while programmatic clearly represents a huge growth area, it’s a market still in the early stages of development, and some have yet to be fully convinced of its merit. A March 2014 study from Europe’s Interactive Advertising Bureau Europe, AppNexus and Warc, conducted by Circle Research, found that while concerns about resources—both people and budget—were the leading barriers to using programmatic, according to marketing professionals in the EU-5, there were also other concerns related to this type of trading.

However, the numbers point toward strong growth nonetheless. Essentially, concerns about programmatic advertising are being eroded by an increasing awareness and understanding of the technique. This is something those in the programmatic space are keenly trying to improve upon.

Get more on this topic with the full eMarketer report, “State of UK Digital Advertising: In the Digital Mix, Mobile Means the Most.”

This report answers these key questions:

  • How much are UK advertisers spending on digital advertising, and what are the main growth trends?
  • How significant is mobile in the rise of UK digital advertising spend?
  • What role does programmatic trading play in the UK’s digital advertising equation?

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