Brands are consistently leaning into ad technology to deliver precise, tailored ads to their target audience. But who’s buying programmatically, and why does it matter? MediaRadar’s latest analysis uncovers key trends and insights into the realm of programmatic advertising.

The Rise and Decline of Digital Advertising

2022 was a remarkable year for digital advertisers. Post-COVID restrictions generated an advertising boom, with brands scrambling to capture pent-up consumer demand. As restrictions lifted and the world took baby steps towards normalcy, digital ad spending skyrocketed.

However, fast forward to 2023, and the scene has somewhat changed. Global economic concerns have ushered in an air of caution. Brands are now more deliberate with their ad dollars, meticulously choosing where to place them.

In a landscape where cautious spending prevails currently, one thing remains consistent: programmatic ad buying continues to dominate the digital space.

Digital Ad Trends: The Numbers

MediaRadar’s analysis of ad spending from national digital media outlets paints an intriguing picture. By Q3 2023, national digital advertising was hovering at a colossal $46 billion. Despite this impressive number, digital spending noted an 8% YoY decline from 2022.

Interestingly, this downturn is predominantly due to a slump in programmatic spending, which decreased by 13% YoY. Industries such as technology observed a significant decline in programmatic ad spend by 31% YoY, settling at $3.8 billion.

However, let’s add some context: programmatic ad investments still commanded a large share of the pie, with 74% ($35 billion) of digital spend through Q3 2023 being allocated to programmatic channels. Tailor digital ad sales by understanding which advertisers embrace ad tech along with their buying behavior.

On the flip side, digital publishers should note that direct ad spend has shown growth. Up 7% YoY, direct ad expenditures touched nearly $12 billion. Leading this uptrend are sectors like tech (increasing 7% YoY to $1.8 billion) and home furnishings, which saw a whopping 19% YoY increase, amounting to $924 million. Not to be left out, professional services also hiked their direct ad investments by 6% YoY, bringing their total to $763 million.

Top Programmatic Advertisers in 2023

A staggering 136k companies jumped aboard the programmatic bandwagon by the end of Q3 2023, buying ads for about 208k brands or product lines. This is an impressive 83% of the nearly 165k companies that opted for digital advertising during this period.

Several top companies, including industry giants like Amazon.com, Comcast, Hyundai, and Mondelez, dedicated a whopping 80% or more of their budgets to programmatic spending emphasizing its significance in today’s ad landscape. And when we delve into different advertising categories, eleven out of 27 allocated more than $1 billion solely for programmatic advertising. Leading this list are media & entertainment and retail advertisers, with over 80% of their digital ad dollars flowing programmatically. These along with apparel, food, and beauty are categories to target for ad tech sales opportunities.

However, there are always outliers. The home furnishings category, including furniture, maintenance items, and outdoor products, leaned less into programmatic channels, placing less than 60% of their digital ads through ad tech.

Looking ahead, several brands, such as Aflac, H&M, and Old Spice, seem poised to bolster their programmatic ad spending, with predicted RFPs slated for Q4.

The Future of Programmatic Advertising

The world of programmatic advertising is dynamic, and shaped by myriad external factors. While we’ve noted a YoY decrease, the resilience of ad tech remains undeniable. Companies are still betting big on programmatic, signaling its enduring relevance in the ever-evolving advertising ecosystem.

For advertisers and ad sales professionals keen on staying ahead of the curve, harnessing advertising intelligence is paramount. Ad sales professionals leveraging real-time insights and data can make informed decisions on how to target key brands for success, ensuring their sales efforts yield optimal results.

Why does it all Matter?

MediaRadar’s analysis highlights that while programmatic advertising has seen a slight decline in 2023, it still makes up the vast majority of digital ad investments. Advertisers across industries continue to lean heavily into ad tech to reach their target audiences.

For ad sales professionals, these insights indicate that programmatic channels remain crucial for prospecting new business. Focus sales outreach on categories investing heavily in ad tech like retail, media, entertainment, and apparel brands. Use real-time data to identify brands increasing their programmatic budgets.

For publishers, direct ad sales present an area of growth to capitalize on. Allocate resources to building direct relationships with advertisers in home furnishings, tech, and professional services. Develop tailored offerings to attract these brands investing more in direct channels.

The programmatic landscape will continue to evolve rapidly. By leveraging timely advertising intelligence and data, ad sellers and publishers alike can adjust strategies to drive revenue and stay ahead in 2024’s digital advertising arena.

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