U.S. Programmatic Ad Spend To Top $10 Billion In 2014 And Double By 2016 [eMarketer]

Programmatic — automated digital ad buying — is on fire in the U.S, with adoption rising quickly this year. New data from eMarketer pegs the programmatic display market in the U.S. at $10 billion this year, and estimates it will top $20 billion by 2016.

“2014 has proven a pivotal year, and with the majority of infrastructure now laid and testing well in progress, we’ll see programmatic ad spending explode from 2015 into 2016,” said Lauren Fisher, analyst for eMarketer.

In 2014, eMarketer predicts programmatic buying will account for 45 percent of total digital display ad spending. The pogrammatic display market includes banners, rich media, sponsorship, video and other digital display formats, though eMarketer notes that the vast market in programmatic is currently focused on banners and will likely continue to be in the coming years.

Video, in particular it is thought, will continue to be sold directly through traditional sales channels. That said, programmatic is expected to account for 40 percent of US digital video ad sales in 2016 ($3.84 billion).

This month’s report is eMarketer’s first measure of U.S. programmatic ad spend, which took into account dozens of data sources and more than 50 interviews with ad agency, brand, publisher and media and ad tech firm executives.

The research service expects programmatic to continue to grow “thanks to the build-out of private marketplaces and programmatic direct deals, as well as continued maturation in both mobile and video advertising”.

In 2014, mobile will account for 44.1 percent of all U.S. programmatic display ad spending ($4.44 billion) and surpass desktop as early as next year to represent 56.2 percent of all programmatic ad spend in the U.S.

Auction-based programmatic buying, called real-time bidding (RTB), is fueling growth and is on target to account for 92 percent of programmatic ad spend in 2014. Open exchanges will make up 90 percent of the RTB market this year, though ad spend on open exchanges is predicted to remain flat over the next two years.

Programmatic direct, meanwhile, is expected to grow significantly from roughly 8 percent of the programmatic market this year to 42 percent by 2016.