At the beginning of the year, ad tech leaders were talking about what they expected from programmatic in 2021. A big part of the discussion was how programmatic would become central to the media planning process and how buyers would need to adopt a ‘test and learn’ mindset.
Not only that, but IAB predicted that programmatic’s “meteoric rise” in ad spend would reach $98 billion and account for 68% of all digital advertising in the US.
We’ve seen the increased adoption of automated buying in our data—among brands who were already buying digitally and brands that benefited from the pandemic. Of the influx of brands new to the format during the pandemic, who are they, are they still spending and how much?
Bracing for change, the ad tech market is sizzling hot
New privacy concerns and cookie revamps aren’t putting a damper on ad tech companies. Instead, bigger companies are buying up smaller ones in preparation for upcoming change.
Seven ad tech companies made deals worth at least $1 billion during the first quarter of 2021 alone. Magnite bought SpotX, Viant went public and Taboola and ironSource began raising funds through SPACs for their potential IPOs. This is more than twice the number of billion dollar transactions over the past few years combined.
“The overall media and marketing ecosystem has been on a growth tear for years, and the pandemic has led to an inflection point across streaming, gaming and eCommerce,” explained Conor McKenna, LUMA Partners director to AdExchanger. Between low interest rates, excited investors and consumers overflowing on digital media, market consolidation is happening rapidly.
Large ad tech companies need to compete for market share and the solutions necessary for a post-cookie environment.
More brands are spending on programmatic—at the same time, ad tech providers are challenged to merge solutions
How long will this buzz last? It’s hard to tell, but one thing is clear—whether by choice or force, ad tech leaders will need to embrace change.
Ad tech ‘godfather’ Brian O’Kelley, inventor of the online ad exchange, the former CTO of Right Media Exchange and the co-founder and former CEO of AppNexus, says it’s in the best interest of advertising leaders to re-envision what effective advertising looks like in the upcoming stage of ad tech.
And this new vision might be better off without personal identifiers.
“Given regulatory frameworks and tech … do we really want to fight this fight, or should we go think about how to make advertising effective without personal identification?” he told Adweek. “It might actually be better societally, and better economically for the companies that we care about?”
Ad tech company success will hang on the ability to provide precision, transparency, compliance and flexibility—all with new integrated technology that leans on first-party data or alternative solutions. As the big fish buy out the smaller ones, they’ll gain resources needed to undergo revamps.
As the industry takes on these changes, buying isn’t slowing down. Companies will need to navigate changes while delivering strong results to new buyers.
At the beginning of the pandemic, we saw a flurry of new advertisers in the programmatic space. Not all have remained, but many now drive the majority of the spending.
Looking at data from April 2020, we analyzed new advertisers in the programmatic space. Of the top 20 thousand spending advertisers, 58% had recently started buying programmatically (since the pandemic began).
Of those advertisers that were new to programmatic advertising (11,610) last April, 5.3k of them were still in the space in April 2021. In April, their spend accounted for 53% ($578mm) of all programmatic spend.
Less than half stayed in programmatic—but those that did spend significantly.
Top returning brands who were new to programmatic ad spend as a result of the pandemic include:
To learn more about the data behind this article and what MediaRadar has to offer, visit https://mediaradar.com/.
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