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Will automated systems replace traditional ad-buying methods?

Programmatic buying has revealed to advertisers a new way of buying and selling digital ads. Through demand-side platforms (DSPs) and real-time bidding (RTB), marketers buy and sell desktop display, video, Facebook Exchange (FBX), and mobile ads using automated technology. These automated systems have allowed marketers to buy media in response to real-time customer action through algorithms employing a complex set of rules, usually at lower cost and higher agility than with traditional ad-buying methods. Although many publishers and media buyers are still wary of this method mostly due to its lack of information and control, the utilization of programmatic buying has continued to increase.

Here are 20 statistics that present programmatic buying as an increasing power in the digital ad-buying market.

1. Programmatic Buying tripled from 2011 to 2012 with exchanges increasing by 25% and demand-side platforms (DSPs) increasing by 21%. (eMarketer)

2. “Programmatic buying of video has grown by 20% in the past 6 months”. (Adap.tv)

3. “Programmatic buying has predicted to grow at 53% per year in the United States between 2011 and 2016”. This has accounted for 58% of indirect display ad sales and 20% of all display advertising. (Rocketfuel)

4. “US interactive display media will grow from $12.7 billion in 2012 to $28 billion in 2017, an average annual rate of 17%”. (Forrester)

5. “The core of the display market, performance-based impressions, will shift toward programmatic exchange-based trading at a rate of 43% annually between 2012 and 2017, comprising 30% of total display spending by 2017”.(Forrester)

6. Digital display ad spend purchased through real-time bidding (RTB) is projected to increase 73% in 2013. (eMarketer)

7. Brands, agencies, trading desks, and publishers have all increased their use of RTB for video within the past year. Trading desks are now using video RTB at 100%. (Adap.tv)

8. “70% of media buyers are already doing some programmatic trading. 77% of those buying via programmatic means plan to do more of it in the next 12 months”. (eMarketer)

9. Video inventory purchases through exchanges and DSPs tripled during 2012 in the United States. (Adap.tv)

10. 35% of media buyers claimed that the likelihood of replacing direct relationship with programmatic buying was high, while 34% said it depended on its success. (eMarketer)

11. “Display advertising sales based on RTB in the United States  will see an estimated 2010–2015 CAGR (Compound Annual Growth Rate) of 71%, while IDC expects a CAGR of 114% in the United Kingdom, 103% in France, and 99% in Germany”. (PubMatic)

12. 2012 international projections predict that in 2016, Japan will spend 68%, UK spend 67%, France 61%, Germany 59%, and China 26% on RTB-based indirect ad sales. (Rocketfuel)

13. “By 2015, RTB-based spending will account for 27% of total display advertising sales in the United States (up from 10% in 2011), 25% in the United Kingdom (up from 6%), 21% in France (up from 4%), and 20% in Germany (up from 4%)”. (PubMatic)

14. “46% of US marketers already invest or plan to invest in real-time bidding, compared with 32% in Europe”. (Forrester)

15. 66% of brands are doing their own programmatic buying of video. (Adap.tv)

16. “Some brands have seen their digital media ROIs increase 6 times while using programmatic buying”. (Kellogg’s via Forbes)

17. “19% of brand advertisers are employing trading desks to pick up inventory”. (AdMonsters)

18. “Programmatic exchanged-based trading will comprise 30% of total spend by 2017, while rich media and long-form video will grow at 16% and 26% respectively”. (Forrester)

19. An “estimated 13% of total digital display ad spending went toward real-time bidding in 2012, and is predicted to rise”. (eMarketer)

20. According to media buyers in North America and the UK, increased revenue is the most important goal in both search (92%) and site (84%) retargeting. (eMarketer)

Forrester and other sources above ultimately believe that “programmatic buying will capture the bulk of all digital advertising spending” (Forrester). Through real time bidding, advertisers and media buyers will be able to reach their desired customers at mass scale and optimize their ad campaigns more efficiently. With big data and artificial intelligence radically changing the digital domain, programmatic buying continues to gain traction in the online ad market.