US Programmatic Ad Spending Forecast Update 2018

Executive Summary

In the US, programmatic advertising is digital display advertising. We forecast that spending on this form of automated buying and selling will reach nearly $48 billion by year’s end. By 2020, US advertisers will transact nearly $69 billion in US digital display ad spending programmatically, accounting for 86.3% of the digital display pie.

How much digital display advertising is bought programmatically?

Programmatic advertising—defined as the use of automation in the buying, selling or fulfillment of digital display advertising—is now the norm. We estimate that more than four of every five digital display ad dollars in the US today transact via programmatic means. More than four-fifths of mobile display and video ad dollars also already flow through programmatic channels. By 2020, the vast majority of US digital display ad dollars (86.3%) will transact programmatically.

Do the majority of digital display ad dollars go to mobile today?

Yes. In fact, by 2020, two-thirds of programmatic ad dollars will go to mobile, not desktop ads. Mobile’s share of US programmatic digital display ad spending will increase, thanks to overall market trends and the continued influence of players like Facebook and Google, who are both mobile- and programmatic-centric. The continued growth of social advertising (again, largely mobile and programmatic in nature) will also drive mobile programmatic investment. However, anticipated gains in over-the-top (OTT) and connected TV ad dollars flowing into programmatic over the next 24 months will keep mobile’s total share from skyrocketing.

Is the majority of video advertising now conducted programmatically?

Yes. By 2020, 83.6% of all digital video ad dollars in the US, or $33.55 billion, will move via automated channels. In September 2018, we redefined video advertising to include not only in-player video, but also out-stream, native and social in-feed video.Since significant amounts of spending on those reclassified ad formats was already programmatic, this translated into an increase in the share of video ad spending we estimate is transacted programmatically. But there’s also organic growth in programmatic penetration of video advertising, thanks to the accelerated growth of connected TV and OTT viewership.

WHAT’S IN THIS REPORT? This report offers our latest forecast for programmatic digital display ad spending in the US, along with key trends likely to affect growth in the next 12 to 24 months. Included in the forecast is a detailed breakdown of projected ad spending for all major transaction methods. Estimates for mobile display and programmatic video spending are also included.