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US retailers spend more on digital advertising than any other industry, and they also lead all verticals in programmatic spending. eMarketer estimates that nearly 25% of programmatic digital display ad dollars will be spent by the retail industry this year.
Digital display ad spending by US retailers was also more programmatic-heavy than in any other industry. Retailers are spending 70.0% of digital display budgets on programmatic buys this year. Overall, the industry will spend $3.71 billion on programmatic digital display ads in 2015.
Retailers are using programmatic to boost brand awareness as well as for a host of other goals, according to research.
Industry subsegments are adopting programmatic display at different rates. Online retailers that need to make up shipping costs and those that trade in commodity products that compete with Amazon could spend as high as 100% programmatically. Luxury, on the other extreme, could be as low as 20% since this sector likes maintaining control of ad placements and has the margins to play around with pure branding.
Brand safety is brought up repeatedly as a concern among retailers. The importance of ads not running against unflattering content is a general issue, but particularly for more image-conscious categories like luxury retail. According to Aaron Kaliner, vice president of direct response and commerce solutions at programmatic media-buying platform Rocket Fuel, it's one of the reasons why these brands have been slower to adopt programmatic than others. Private media placements will begin changing some of this reticence, though. "In probably 2015 or 2016, luxury retailers will realize that they can bring programmatic and audience buying to their publisher relationships and get great performance and efficiency," he said.
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