Programmatic ads set to top $10B, but online video ads stick with tradition... for now

Programmatic display ads--advertising sold online using automated means, often auction-based--has seen its biggest year yet, and should pass $10 billion in 2014. But online video ads aren't yet playing a big role in that growth.

eMarketer programmatic video ad spendingThat's because much of the online video ad inventory is considered high value, and, like custom campaigns and nonstandard advertising, is often sold through direct channels rather than programmatically, according to eMarketer.

"Today publishers largely guard high-value ad inventory such as TV and premium digital video content, though we expect a greater number of ads sold programmatically in these formats starting in 2015," said analyst Lauren Fisher of eMarketer. "Those who do decide to turn to programmatic, however, are likely to do so via programmatic direct, where they can still secure inventory guarantees."

Publishers, or content creators, as well as agencies have reason to be wary about how online video ads are sold and displayed. Reports by the New York Times and Wall Street Journal this spring pointed out some of the pitfalls of buying programmatically--such as ads being displayed on fraudulent websites. Out-of-date viewability standards and users annoyed by autoplay ads are continuing issues.

Programmatic digital video ad spending will make up 12 percent of all digital video ad spending in 2014, or about $71 million, eMarketer estimates. However, that percentage will shift dramatically in the next two years as content creators and advertisers, hopefully, work through programmatic's pain points and gain more confidence in the buying system.

"2014 has proven a pivotal year, and with the majority of infrastructure now laid and testing well in progress, we'll see programmatic ad spending explode from 2015 into 2016," Fisher said. The research firm expects that programmatic video ad spending will make up 40 percent of all digital video ad spend in 2016, or $3.84 billion.

For more:
- eMarketer has this article

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