The WARC has The future of programmatic 2024a report on the key trends shaping programmatic advertising over the next 12 months, as well as practical guidance for advertisers developing their programmatic and ad tech capabilities.
Programmatic advertising is digital advertising that is bought, sold and placed using automated technologies and algorithms. The report highlights key trends in five different areas: programmatic priorities and concerns, signal loss and cookie devaluation, supply chain transparency, sustainability and spending intentions.
The results are based on an exclusive survey of 100 programmatic experts conducted in July 2024 by WARC in collaboration with B2B market research firm NewtonX.
Paul Stringer, Managing Editor Research and Insights, WARC, commented: “Our Future of Programmatic report comes in the wake of Google’s announcement that it will no longer completely remove third-party cookies from the advertising ecosystem. While this represents something of a reversal, it should not lead to complacency. The industry still needs to evolve to meet the demands of a privacy-first ecosystem. Declining addressability, brand safety and ad fraud continue to be concerns for marketers, and addressing these issues will become even more important as more spend moves to programmatic each year.”
The key challenges outlined in the WARC report “Future of Programmatic 2024” are:
- Brand safety tops programmatic concerns
Accounting for more than 70 percent of digital spending, programmatic channels play a critical role in helping advertisers achieve their broader marketing and business goals.
Two-thirds of the advertisers and agencies surveyed are reasonably satisfied with the contribution of programmatic advertising to increasing business success, but also acknowledge that there is still room for improvement.
Much of the current discontent stems from concerns about brand safety. Recent reports have shown that advertisers are spending millions of dollars on low-quality ad placements that violate brand safety standards.
More than half (60 percent) of advertisers and agencies surveyed cited this issue as one of their biggest concerns, and 56 percent said improved ad verification capabilities were their highest priority.
Hannah Rook, Head of Intelligence and Insights, MediaBrands Magna Group, said: “Advertisers and agencies need to take a more proactive and comprehensive approach to brand safety and expand their placement criteria to make better decisions and ensure their ads appear in appropriate and relevant environments.”
- Advertisers are not prepared for a world without cookies
Although Google will no longer withdraw cookies from the digital advertising ecosystem, they will nevertheless play a smaller role in the future.
Many advertisers are still struggling to adapt to this new world, despite concerns about the impact of signal loss on various areas such as targeting, data access, audience segmentation and measurement. Only a quarter (25 percent) of survey respondents agree that advertisers are making sufficient progress.
In line with other studies, advertisers are doubling down on first-party data collection. More than three-quarters (76 percent) of respondents are implementing first-party data strategies, with more than half (57 percent) highlighting this as the most promising solution.
Wayne Blodwell, co-founder and CEO of Impact Media, said: “Google’s decision to keep cookies has not changed the direction of the industry. Advertisers should continue to use smart, cookie-free techniques like attention and econometrics to prepare for a privacy-first world.”
- The industry is not taking steps towards transparency
Ad fraud and waste are rife throughout the programmatic advertising supply chain. According to the ANA’s Programmatic Study, only 36 cents of every dollar spent on programmatic advertising reaches the consumer, and a quarter of the $88 billion spent on open web programmatic is wasted on low-quality and fraudulent ad impressions.
However, one year after the report was published, less than half (49 percent) of advertisers and agencies had entered into direct contracts or taken the necessary steps to review or verify the quality of ad impressions.
Joint action is needed to urgently address these problems and clean up the opaque media supply chain.
- Reducing emissions is not a priority for most companies (59 percent)
According to Scope3, the programmatic advertising industry in five leading economies generates more than 215,000 tonnes of carbon emissions in a single month.
To address the climate crisis, marketers must take more responsibility for reducing the carbon footprint of their advertising-related activities. This includes programmatic advertising, which generates significant emissions through its complex supply chain.
Almost two-thirds (59 percent) of agencies and advertisers surveyed for the report say that reducing emissions from programmatic advertising is not a priority for their business. Less than a third (31 percent) said they have implemented a framework or set of methods to measure the carbon emissions of their digital advertising. A further third (34 percent) have taken no action at all to reduce the carbon footprint of their programmatic advertising campaigns.
More than half (52 percent) of respondents cite the lack of industry-wide standards as a clear obstacle to reducing emissions. Almost half (48 percent) emphasize that there is a lack of knowledge or skills to reduce the carbon footprint of advertising activities.
Mark Andrews, Senior Consultant at ID Comms, commented: “Some advertisers are using their media agencies to predict carbon emissions in their media plans. This educates planners and buyers and helps media teams think about carbon emissions and how practical decisions in the planning phase can reduce emissions without compromising the effectiveness of media planning/buying.”
- Investments in the open web are declining while spending on the walled garden is increasing
Although there is evidence that the open web remains the arena where audiences spend most of their time, investment in closed platforms appears to be growing. WARC forecasts that five platforms alone will attract over half of global advertising spend this year. Three-quarters of survey respondents (76 percent) say they spend 40 percent or less of their budget on advertising on the open web.
Advertisers and agencies prefer to spend more on programmatic direct offers (e.g. guaranteed programmatic offers, preferred offers) than traditional real-time bidding. More than half (56 percent) of respondents buy display inventory using programmatic methods. Retail media inventory also tops the list of channels that are being handled programmatically. The biggest increases in programmatic investment are expected to be in social and gaming.
