Programmatic Will Account for Three-Quarters of UK Digital Display Market Next Year - eMarketer

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Programmatic Will Account for Three-Quarters of UK Digital Display Market Next Year

Programmatic direct reaches parity with real-time bidding this year

September 14, 2016

The UK will remain a market leader in programmatic digital display ad spending, and this year eMarketer expects advertisers to spend £2.67 billion ($4.08 billion) on programmatic trading, up 44% from last year. And further growth is anticipated: This year, programmatically traded ads will account for 70% of all UK digital display ad spending, and by the end of 2017 it will be more than three-quarters.

UK Real Time Bidding (RTB)* vs. Programmatic Direct** Ad Spending Growth, 2014-2018 (% change)

Trading via real-time bidding (RTB) has traditionally dominated the programmatic space in the UK, but programmatic direct, a pre-negotiated approach that does not involve an auction, is on course to overtake it. This year, RTB and programmatic direct spending will reach parity, at £1.33 billion ($2.03 billion) each. However, by 2018, programmatic direct will account for 52% of the programmatic total and £2.03 billion ($3.10 billion).

“Much of the programmatic direct total is accounted for by social media ad impressions, which are predominantly traded this way,” explained eMarketer UK analyst Bill Fisher. “However, outside of social, people are coming round to the greater degree of certainty offered by this way of trading. Even within the RTB total, private marketplaces—small, invitation-only auctions—are becoming increasingly prevalent as people seek more control over the programmatic trading function.”

UK Programmatic Display Ad Spending Growth, by Format, 2014-2018 (% change)

Mobile, which has grown up in the programmatic era, will continue to dominate, and eMarketer estimates that almost three-quarters (£1.99 billion, or $3.04 billion) of total programmatic display ad spending will go toward mobile inventory this year. That proportion will reach a staggering 82.1% by 2018, when mobile will account for £3.20 billion ($4.89 billion) in spending.

“The story here isn’t surprising,“ said Fisher. “Eyeballs have moved to mobile and ad spend has followed. All the while, programmatic has been around in the background, so it’s little wonder we’re seeing mobile programmatic taking off in such a big way.”

Programmatic video will remain slightly behind the curve—just 51% of digital video inventory will be traded programmatically this year vs. 70% for the overall display market. This is largely due to the lack of premium inventory currently available. But programmatic video spending will grow even more quickly than programmatic mobile spending over the next few years.

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