Sales of digital advertising space through automated selling more than tripled last year and are set to grow more than 60 per cent this year, according to new numbers from research firm eMarketer. The use of computer systems that automate parts of the sales process, and ideally make the buying process more efficient, are set to make up roughly half of all digital sales both for ads on desktops and on mobile, the report says.
Automated – or "programmatic" – advertising selling is becoming a major part of how ad space is bought and sold. But a study by Boston Consulting Group this summer found that many publishers who sell that ad space on their websites are "leaving money on the table" because they are not managing this selling tool correctly.
The Canadian market has been slower to catch on to this trend than in the U.S. But the share of ads bought and sold through automated systems is growing here.
Automated sales should account for roughly 48 per cent of all digital display ad spending this year – and should be over the 50-per-cent mark by next year – and 54 per cent of all digital mobile ad spending. That puts Canada roughly one year behind both the spending levels, proportional to all digital ad spending, compared to both the U.S. and the U.K., eMarketer's report said.
"Programmatic advertising in Canada trails other comparable markets … due primarily to the structure of the market – relatively few publishers offering advertisers options for programmatic inventory," eMarketer analyst Paul Briggs said in a statement.
"What remains an obstacle to programmatic globally, and applies to Canada as well, are persisting concerns for advertisers regarding transparency in ad delivery and ad fraud," Mr. Briggs said.
Some advertising fraud happens online, when hackers take advantage of automated systems to fool the systems buying on behalf of advertisers to spend part of their budgets on bogus ad space. The concern over transparency, partly, refers to advertisers' complaints that buying digital ad space does not always guarantee that their ads will be seen.
In its research, eMarketer includes both "real-time bidding" – where advertisers bid on ad space in real time using automated software and based on a number of criteria – and "programmatic direct," which is when an advertiser has a prenegotiated deal with a publisher to price its ad space, and conducts its buying based on those agreed upon terms through some automated systems.