Over half of the reported $10.1 billion spent on programmatic advertising last year went into the accounts of the ten leading companies in the space, according to a joint study from the IAB and PwC.
The pair’s latest ‘Revenue Report’ into programmatic advertising shows 66% of earnings going to a very small group of publishers and ad tech groups which have managed to seize on the real-time bidding opportunity in grand fashion.
It’s a theme that trickles down the IAB’s list of top earners in programmatic.
The top 11-25 companies obtained a 9% share of programmatic revenue from 2014, estimated at $909 million compared to the top ten’s $6.6 billion.
It leaves around 25% ($2.5 billion) to be shared out between the rest of the US market and should prompt debate over the real beneficiaries of programmatic’s current boom.
Tried and tested
When analysing revenues of the main players, IAB found that companies in the top 25 accounted for approximately 75% of all revenue from the automated buying and selling of ad space across display, video and mobile.
A similar level of dominance is also present in the way advertisers are acquiring ad space via the technique. The report notes that open auctions, which allow publishers to sell inventory to anyone using a demand-side platform (DSP), took 70% of all programmatic revenue in 2014.
Banner ads managed their own place in the spotlight, too, as despite all the hype around supposedly more ‘popular’ and ‘up to date’ formats, this very basic form of display drove 80% of programmatic revenue in 2014.
For the auction houses, though, dominance may not be present for too much longer. The IAB used its notes in the report to foresee a shift to other buying models such as private marketplaces – tailored around premium content – in the near future.
In addition, comments in light of the report from IAB’s Sherrill Mane, SVP of research, analytics and measurement at the Bureau, stressed that all the findings are based on data from 2014, and that signs from early in this year revealed that advertisers are keen to try new things.
Plan of action
Aside from all the inner-stories about revenue being shared by a ‘monopoly’ and the reliance on buying techniques, the IAB’s research did ensure that programmatic – once again – made headlines through its valuation.
The figure of $10.1 billion is significant as a standalone but even more so when considering the environment in which it’s framed.
Programmatic represented over a fifth of the $49.5 billion generated by internet advertising in the US over 2014. It went on to account for 52% of all display-related ad sales in the year, and that figure is only expected to rise in the years to come.
Where ad tech groups and publishers are concerned, the big tasks will be in solving problems like transparency and standardisation in formats, with a view to helping programmatic become an even bigger beast than the one standing today.