Real-Time Bidding Poised to Make Up Quarter of All Display Spending

NEW YORK, NY (November 14, 2012)—Real-time bidding (RTB) will account for 13% of all US display advertising spending this year, more than triple its share in 2010, according to new estimates by eMarketer. Over the next few years, RTB will continue to gain momentum and share of ad dollars as more media buyers and publishers benefit from its efficiencies.

This year, the overall US display ad market will grow 21.5% to $14.98 billion from $12.33 billion in 2011, according to eMarketer estimates from September. Growth in RTB display ad spending, by comparison, is expected to reach 98% in 2012.

Research firms estimate US RTB digital display ad spending will total between $1.1 billion and $2.1 billion this year, driven by improvements in RTB technology and increased investment from both media buyers and publishers. eMarketer forecasts RTB ad spending will reach $1.9 billion in 2012 as both publishers and media buyers continue to adopt RTB technology at a steady clip. Beyond 2013, those growth rates will slow as the programmatic buying landscape settles and matures and awareness and general understanding of RTB technology become ubiquitous. Even still, by 2016, US RTB ad spending will climb to $7.1 billion.

eMarketer forms its forecast through an analysis of estimates from other research firms; survey results from brands, agencies and media publishers; digital and mobile ad spending trends; and eMarketer interviews with executives at ad agencies, brands, media publishers and other industry leaders. eMarketer’s estimates include all display formats, including banners, video and social served to all devices.

This is eMarketer’s first-ever forecast for US real-time bidding digital display ad spending. eMarketer’s estimates are slightly more conservative in their projections for growth than some other firms. eMarketer is confident programmatic buying for mobile and video will contribute significantly to future RTB ad spending growth, but for now those ad types will account for relatively small shares of overall RTB dollars. As media buyers increasingly invest in RTB and big publishers like Facebook continue to enter the market, eMarketer forecasts 72.4% growth in US RTB ad spending for 2013.

There are four key influences that will determine the growth of RTB: the maturation of Facebook’s ad exchange, FBX, an expected influx of video and mobile inventory, an anticipated greater availability of premium ad inventory and an overarching demand for better transparency for all of digital display, not just RTB.

Though the industry remains confident all of the above influences will in fact result in additional ad spending dollars moving to programmatic buying, how quickly each of these four developments evolves to produce its effect is less certain.

Facebook’s recent launch of its private ad exchange, FBX, will play a role in driving future RTB ad spending growth, though, for now, how much of a role is difficult to determine. FBX only came out of beta testing in September 2012, and although Facebook spoke positively about the exchange’s performance in its Q3 2012 earnings call, company COO Sheryl Sandberg described FBX’s current revenue impact as “small.”

Yet even slight adoption on the part of Facebook advertisers could yield significant growth for the real-time buying market, considering that Facebook will have an estimated 15% share of total US display ad spending in 2013.

An influx of brand dollars as national and global brands look to programmatic buying to more efficiently identify and reach their target audiences for brand-lift measures is also expected to fuel RTB ad spending. Anticipated advancements in display ad placement transparency and in-view accountability, as well as a rise in the amount of premium inventory made available through exchange channels, will help pave the path to entry for some branding-conscious marketers.

Definitions:

Real-time bidding (RTB) is a digital advertising technology that lets marketers buy and publishers sell display ads dynamically, in real time, on an impression-by-impression basis.

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Clark Fredricksen
Vice President, Communications, eMarketer
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