Five trends and key pain points in programmatic advertising – digital advertising bought, sold and placed using automated technologies and algorithms – were analyzed in WARC’s The Future of Programmatic 2024 report, offering practical guidance for advertisers developing their programmatic and ad tech capabilities.
The report highlights programmatic priorities and concerns, signal loss and cookie obsolescence, supply chain transparency, sustainability, and spending intentions.
The research findings are based on an exclusive survey of 100 programmatic experts conducted in July 2024 by WARC in collaboration with B2B market research firm NewtonX, supplemented by expert commentary and external research.
Paul Stringer, senior editor of research and insights at WARC, said: “Our report on the future of programmatic marketing comes in the wake of Google’s announcement that third-party cookies will no longer disappear completely 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 as more and more spend moves to programmatic each year, it becomes even more important to address these issues.”
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.”
Are programmatic advertisers inadequately prepared?
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.”
Need for action in the area of transparency
Ad fraud and waste are widespread throughout the programmatic advertising supply chain. According to The ANA programmatic studyOnly 36 cents of every dollar spent on programmatic advertising reaches the consumer, and a quarter of the $88 billion spent on programmatic advertising on the open web 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.
Emissions reduction is not a priority
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, including programmatic, which generates significant emissions through its notoriously 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, said: “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; 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 direct programmatic offers (e.g. guaranteed programmatic offers, preferred offers) than on traditional real-time bidding.
More than half (56 percent) of respondents buy display inventory using programmatic methods. Retail media inventory is also high on the list of channels that are handled programmatically. The biggest increases in programmatic investment are expected to be in social and gaming.
The latest report is part of WARC Strategy’s Evolution of Marketing, a content program of in-depth, forward-looking reports that focus on the future of the marketing discipline, drawing on the latest insights, emerging trends, technologies, media, social influences and other drivers of change.
