Programmatic advertising growth is slowing due to privacy issues, but will still dominate 2020 digital ad sales

In 2020, 69 per cent of all forms of paid-for online advertising, including banners, online video and social media, will trade programmatically.

In 2020, 69 per cent of all forms of paid-for online advertising, including banners, online video and social media, will trade programmatically.

Zenith’s latest Programmatic Marketing Forecasts 2019 report says that this is up from 65 per cent this year. 

The report finds that the total amount spent programmatically will exceed US$100 billion for the first time in 2019, reaching US$106 billion by the end of the year, and is forecast to rise to US$147 billion in 2021, when 72 per cent of digital media is expected to be programmatic.

However, expansion of programmatic advertising spend is slowing, falling from 35 per cent in 2018 to 22 per cent in 2019. This trend is expected to continue with growth slowing to 16 per cent by 2021.  

Zenith says that this is due to the challenges that the programmatic advertising industry faces that “need resolution before marketers, publishers and consumers realise its true potential”.

Balancing privacy and personalisation 

Zenith says that new technology and processes are needed that better balance consumers’ need for privacy with the benefits of targeting and personalisation. 

The European Union’s GDPR has made some forms of personal data unavailable, and the US’ California Consumer Privacy Act, which comes into force in January, will further this issue. 

Meanwhile, some browsers are blocking the third-party cookies that programmatic advertising traditionally rely upon for measurement, insights, targeting and retargeting.

“The ongoing death of the cookie means that the industry needs to rethink the way we design targeting and personalisation while respecting consumers’ privacy rights,” said Matt James, Zenith’s Global Brand President. 

“High-quality, first-party data is more vital to the success of programmatic marketing than ever before.”

Cleaning up the supply path 

Zenith explains that there are too many ad tech entities that sit on the supply path between publishers and brands, charging fees, and providing unknown value due to their lack of transparency.

“Brands and buyers should review every platform they contract with, to ensure they contribute to campaign goals transparently and effectively,” said Benoit Cacheux, Global Chief Digital Officer at Zenith. 

“They should end their relationship with platforms that do not.”

Unlocking the potential of first-party data 

The report finds that as third-party data becomes commoditised and less efficient, brands are stepping up collection of first-party data, provided directly by consumers or produced indirectly by activity on websites, CRM programs and other brand-owned sources. 

“Because this is unique to each brand, first-party data can provide a true competitive advantage,” Zenith said, outlining that customer data platforms (CDPs), which organise a brand’s first-party data from customer contacts, can be activated into the programmatic trading ecosystem – with the right connections – allowing brands to address customers’ individual preferences. 

Zenith said that increased use of first-party data and CDPs, in combination with other sources of data for a complete view of each customer, will make programmatic marketing more effective and attract higher levels of investment from brands.

Programmatic marketing by country

The report states that the UK and the US are the most advanced programmatic markets in share of digital media, where respectively, 87 per cent and 82 per cent of digital media will trade programmatically in 2019. By 2021, Denmark, France and Germany will join them in having more than 80 per cent of digital media trade programmatically.

The US is by far the largest programmatic market by ad spend, worth US$67 billion this year, accounting for 64 per cent of all programmatic ad spend and responsible for most of the growth. China is second with US$10 billion in 2019, followed by the UK with US$7 billion. 

“Although programmatic ad spend continues to grow at double-digit rates, it is being hindered as the industry struggles with privacy and supply-chain challenges,” said Jonathan Barnard, Zenith’s Head of Forecasting.

“Once these challenges have been addressed, programmatic marketing has the potential to accelerate again during the next decade.”

For more information on Zenith’s reports, visit

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