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Programmatic adspend growth slows amid privacy and supply chain concerns

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United States International Supply Chain Commission
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Programmatic adspend growth slows amid privacy and supply chain concerns

by usiscc
November 25, 2019
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Programmatic adspend growth slows amid privacy and supply chain concerns
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More evidence is mounting that programmatic adspend growth is slowing due to industry concerns about privacy and the supply chain.

Zenith’s latest Programmatic Marketing Forecasts report predicts UK programmatic spend growth falling to 22% in 2019, down from 35% in 2018.

The UK is the world’s most advanced programmatic market in terms of share of digital media – 87% of digital media in the UK will trade programatically in 2019, representing ÂŁ5bn. The US programmatic market, the world’s biggest by value at $67bn (ÂŁ52bn), accounts for 82% of all the country’s digital media.

The report comes within days of the Information Commissioner’s Office telling the industry that adtech companies are holding on to data through programmatic ad buying in the real-time bidding process. The ICO also warned that special category data is being processed without proper consent – something that would violate the European Union’s General Data Protection Regulation. 

A survey by the Association for Online Publishing revealed last week that digital publishers are prioritising non-advertising revenue over the next 12 months as they hope for privacy and supply chain issues to be resolved in the meantime.

Zenith, a Publicis Media agency, said the industry’s first challenge is to develop new technology and processes that better balance consumers’ need for privacy with advertiser benefits of targeting and personalisation. 

Some web browsers are aso blocking third-party cookies that programmatic traditionally relied on for measurement and targeting, such as Apple’s Safari, Mozilla’s Firefox and Google Chrome.

Thiago Correa, head of performance media at Zenith UK, said: “The main reason growth is slowing in the UK is because almost all buying here is now programmatic, where the choice exists. It still represents a significant increase year on year.

“The impact of challenges such as GDPR will evolve over time, but it won’t reverse the trend towards programmatic. We need to think about how the marketing skillset needs to evolve so as to fully capitalise on the possibilities that result from this shift, despite these challenges – especially around measurement.”

Zenith also warned that there are too many adtech entities that sit on the supply path between publishers and brands that charge a fee but provide unknown value due to their lack of transparency. 

In response, brands are stepping up the collection of their own first-party data, collected directly from consumers or indirectly through tracking consumers’ website activity or CRM programmes. Zenith said it is important for digital marketers to connect customer data platforms to other sources of data for a complete view of the customer, as well as continually measure performance to deliver “true people-based marketing”. 

The vast majority (69%) of global digital media will be programmatic in 2020, the report says, up from 65% this year, and the market will surpass the $100bn (£78bn) mark for the first time in 2019. 

Zenith forecasts programmatic spend to reach $106bn by the end of 2020, rising to $127bn in 2021, when it will be 72% of all digital media worldwide.

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