Changing Programmatic Ad Spend: The State of Data Collaboration Chapter 2

Digital advertising is in a constant state of flux, with programmatic ad spend at the center of it. Chapter Two of Lotame’s, “The State of Data Collaboration: A Global Perspective,” fielded by Cint, dives into the current state of programmatic advertising, revealing surprising trends and insights that are shaping the future of advertising. 

The Decline of Programmatic Spend

Programmatic advertising has long been a staple of digital marketing, allowing advertisers to automate the buying of ad space and target audiences with precision. However, the report indicates that programmatic ad spend is experiencing a notable decline. In the latest survey, 55% of marketers predicted a reduction in programmatic spend for 2024, while only 27% anticipated an increase.

This decline is consistent with trends identified in previous years, signaling a long-term shift in how advertisers allocate their budgets. The reasons behind this decrease are multifaceted, including concerns about transparency, the effectiveness of targeting in a post-cookie world, and the overall return on investment.

The Open Web vs. Walled Gardens

One of the most surprising findings in the report is the near-even split in budget allocations between the open web and walled gardens. Despite the perception that walled gardens (such as Google, Facebook, and Amazon) capture more attention, with 56% of respondents agreeing, marketers and agencies are allocating similar budgets to the open web.

This shift towards the open web is a positive development for independent publishers and the broader digital ecosystem. It suggests that while walled gardens may dominate in terms of attention, they are not the only game in town. Marketers are recognizing the value of diversifying their ad spend to include the open web, where they can reach audiences in different contexts and environments.

Factors Influencing Programmatic Spend

Several factors are driving the decline in programmatic spend and the reallocation of budgets:

1. Transparency in Tech Taxes: Agencies, in particular, are concerned about the transparency of the “taxes” levied on real-time bidding (RTB) in programmatic advertising. These concerns are influencing decisions to reduce programmatic budgets and seek more transparent alternatives.
2. Ease of Curation: Both marketers and agencies are looking for easier ways to curate deals with publishers on high-quality inventory matched with data. The ability to curate deals efficiently is seen as a key factor in determining where to allocate ad spend.
3. Measurement Consistency: The need for consistent and standardized measurement across platforms is another critical factor. Without reliable measurement, it becomes challenging to justify programmatic investments, leading to a shift in spending patterns.
4. Elimination of Made-for-Advertising (MFA) Sites: While MFA sites have garnered significant attention in the media, they rank low on the list of priorities for marketers and agencies. Instead, the focus is on more fundamental issues like transparency and measurement.

The Future of Programmatic Advertising

Despite the challenges, programmatic advertising is not going away. Instead, it is evolving to meet the needs of a changing digital landscape. Our research suggests that while programmatic budgets may be shrinking, the industry is moving towards a more balanced approach that includes both walled gardens and the open web.

For marketers, the key to navigating this shift is to stay informed and adaptable. By understanding the factors driving these changes and exploring new opportunities in the open web, marketers can continue to achieve their advertising goals in a more transparent and effective manner.

Download The State of Data Collaboration for More Insights

Chapter Two of “The State of Data Collaboration: A Global Perspective” provides a detailed look at the current state of programmatic ad spend and the trends shaping its future. Download the full report for more insights to help you navigate the complexities of programmatic advertising and make informed decisions about your ad spend in 2024 and beyond.

Inside the report you’ll find: 

• The State of Data Challenges: Discover top barriers to data orchestration & how to overcome them.
• Technology Adoption Trends: Explore what’s on the tech stack shopping list.
• The Rise of Data Collaboration Platforms: Why they’re becoming the Swiss Army Knife of marketing. 

Click here to download now.