3 trends from Programmatic I/O: MFA, commerce media, and ad buying

Programmatic advertising will account for 91.3% of US digital display ad spend this year, or a total of $157.35 billion, per our December 2023 forecast. Last week, advertisers at Programmatic I/O discussed where those ad dollars are headed and how programmatic advertising is changing. From ad spend waste to the expansion of retail media, here are three big trends discussed at the event.

1. Made-for-advertising websites are the new pariahs

“It's a viscerally engaging and scandalizing idea that money is going into these dirty little pits,” said our analyst Max Willens, referring to made-for-advertising (MFA) websites that run programmatic ads but lack quality content or consumer engagement.

An Adlytics report published earlier this year heightened these concerns, but they may be overblown. “We're talking about a small chunk of a small chunk of most brands’ media spending,” said Willens.

MFA sites embody advertisers’ biggest fears with programmatic, including lack of brand safety, uncertainty about where ads are published, and limited viewability, which is why advertisers are so concerned.

2. Retail media is becoming commerce media, and challenges are amplifying

With JPMorgan Chase and PayPal launching their own ad networks, programmatic ad professionals are looking at commerce media, where companies with first-party data launch media networks. Omnichannel retail media ad spend will grow by 26.0% this year, per our March 2024 forecast.

As retail media and commerce media mature, and off-site ad spend increases, the channel’s problems will become more significant.

• A lack of standardization of measurement and ad specs could result in more retail media networks (RMNs)working together. “There are dozens and dozens of RMNs. And if enough of them can kind of coalesce around a standard in time, it could be enough to preserve some of those RMNs,” Willens said.
• Uncertainty over which metrics to use when evaluating retail and commerce media campaigns will also become more urgent as the channels grow. Brands won’t want to use the same metrics for paid search as for connected TV, so RMNs (or third parties) will have to build out more robust measurement strategies.

3. SSPs and DSPs are joining the retail media landscape

Supply side platforms (SSPs) and demand side platforms (DSPs) could be the answers to some of retail media’s woes. Partnerships like the one between TripleLift and Amazon help bring retail media ads off-site.

SSP and DSP integration will create an “easy button” for ad buyers, allowing them to purchase through one platform rather than seven or eight RMNs, Willens said. Then those SSPs and DSPs will work with retail media data to target consumers across the open web.

Difficulties integrating media networks and tech stacks create issues for the majority of commerce media decision-makers across the US and the UK, according to an August 2023 study from Forrester and Pubmatic. But as DSPs and SSPs stake their claim on a share of retail media spend, partnerships with RMNs could result in more streamlined ad buying.

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