Ori Gold, CEO and co-founder of Bench Media says that programmatic advertising has become integral to the marketing ecosystem. He urges CMOs to recognise that programmatic and search should work seamlessly together.
Today, it’s estimated that 60-70 per cent of marketing budgets are allocated to digital channels, with that percentage often higher for digitally savvy brands or those heavily reliant on advertising for growth. This investment makes the IAB Internet Advertising Report FY24, compiled by PwC, a necessary resource for CMOs and marketing executives.
Released on Sunday, the report offers valuable insights and statistics. Yet, the section on media buying types reveals nuances reflecting the post-COVID digital surge.
Programmatic advertising has become integral to the marketing ecosystem, and the FY24 report highlights key shifts within this space. While growth in programmatic is stabilising, its role remains crucial.
Understanding these trends is essential for CMOs aiming to maximise budget potential.
Quality vs. Quantity – The New Norm
By June 2024, 42 per cent of content publishers’ display inventory was purchased programmatically, signaling the maturation of programmatic advertising—it has become the standard for digital ad buying. The report also notes that search, accounting for 44 per cent of total Internet advertising expenditure, remains the cornerstone of digital advertising. Both programmatic and search are driven by data and real-time bidding (RTB), focusing on efficiency and measurable results.
CMOs must recognise that programmatic and search should no longer be viewed in silos but should work seamlessly together as primary data-driven and RTB strategies. This integration enhances targeting accuracy and ROI, aligning campaigns with broader marketing objectives for maximum impact in today’s competitive landscape.
With 65 per cent of content publishers’ video inventory now bought programmatically, the industry is shifting from volume-based to quality-based strategies. The focus is on engaging the right audience with impactful formats rather than simply increasing volume. By aligning programmatic and search strategies, brands can create effective campaigns that deliver personalised content and measurable results, creating a true cross-channel digital experience.
Despite widespread adoption, the report indicates that integrating programmatic advertising into broader marketing technology stacks remains a challenge, possibly capping the current share at around 42 per cent. Aligning programmatic with customer data platforms (CDPs), CRM systems, and advanced analytics tools is complex, and continues to be a pain point for many CMOs. This is one reason why programmatic advertising is still often outsourced to agencies.
To overcome these challenges, brands must invest in technologies that facilitate seamless data flow and enable real-time decision-making. A cohesive tech stack, coupled with the expertise to manage it skillfully, is crucial for unlocking programmatic’s full potential and driving greater efficiency in targeting, ultimately providing a competitive advantage.
Navigating New Formats in Digital Advertising
The report also highlights rising competition from digital advertising formats such as connected TV (CTV) and digital audio. These formats are expanding rapidly but may not yet be fully integrated into existing programmatic systems. While their growth could slow programmatic’s overall market share, it also presents an opportunity for CMOs to innovate and stay ahead of the curve.
Integrating CTV and digital audio into programmatic buying processes will maintain efficiency while reaching new audiences on popular platforms. Additionally, two important emerging channels not included in the IAB report – Digital Out-of-Home (DOOH) and Ad-Supported Video on Demand (AVOD) – are positioned to be data-driven and integrated into the programmatic stack. DOOH’s evolution from static to dynamic, data-driven advertising offers real-time bidding and audience targeting, making it a crucial component of a comprehensive programmatic strategy. Similarly, AVOD, with platforms like Netflix, Disney+, and Amazon Prime now offering ad-supported tiers, opens new avenues for audiences that could not be reached before.
For CMOs, the convergence of these emerging formats with programmatic capabilities presents a powerful opportunity for 2025. By incorporating CTV, digital audio, DOOH, and later AVOD into their established search and social strategies, brands can extend their reach and impact, staying ahead of the competition.
