UK spend on display advertising spilled over the £2 billion mark last year, with nearly half of this total made up of purchases via programmatic technologies.

A new study conducted by the Internet Advertising Bureau’s UK division (IAB UK) found that programmatic contributed £960 million to a total of £2.13 billion spent on display ads across the internet and mobile in 2014.

It’s not good news for networks, however, with spend via these set-ups falling from 22% in 2013 to a meagre 6% last year.

Referring to ads bought and sold using automated processes, programmatic was hot on the heels of direct sales in terms of total spend (49%).

Mobile growth

If programmatic’s growing dominance was ever in question, marketers only have to look at the mobile sector where the method accounts for nearly two thirds (64%) of display ad spend – close to double that of its 37% share in 2013.

Nearly one fifth (18%) of video ads are now also traded programmatically, demonstrating that automated selling, while still considered a direct-response tool by some, is now on “advertising’s top table”.  

That’s according IAB chief strategy officer Tim Elkington, who estimates that around “around 70-80%” of all digital spend will be programmatic by 2018.

“Programmatic’s role in digital ad buying has grown from virtually zero to nearly half of all transactions in just five years.

“However, the impact on mobile has been even greater due to its more fragmented ecosystem providing a ripe breeding ground for intermediaries.”

Head of marketing EMEA at Turn, Helen Miall, projected that increasing competition within the mobile display ad sector is going to see increasing use of data insight, with brands and agencies needing to ‘go the extra mile’ with data insight to build more creative and engaging campaigns.

“Data science is helping Europe to breed an exciting group of marketers that have an advantage against the competition, and this is where the ad industry will really see value from programmatic.”

Early days

Programmatic has certainly flexed its muscles in the last few years, with online retailers, telecoms and finance brands lauded as the most advanced in their use of the technology. But while adoption has been far and wide among advertisers, some believe its full potential isn’t yet being utilised,

“The promise of programmatic is exciting but most advertisers are still at the beginning of their journey. missing out on the advantages programmatic can offer”, says Martin Kelly, CEO at UK programmatic buying company Infectious Media.

“The increase in spend has largely been a straightforward divert from the ad networks, with most advertisers still missing out on the advantages programmatic can offer.

Kelly believes this is why the market is seeing the deluge of global media pitches.

“Advertisers are not happy with the current agency trading desk model and are working out the model that is right for them, be that ATD or working with a specialist business.”