Programmatic Advertising Recap - What happened in 2020

The year 2020 would go down in history as one of the most challenging and, at the same time, one of the most defining years for economies, industries, organizations, and the human race as a whole.

Programmatic advertising was no exception. The year posed many challenges and provided new opportunities to shape up the programmatic landscape in the years or even decades to come.

Let's dig into the top 5 developments in programmatic space during 2020 to take forward in 2021.

I. The Growth Continued

Programmatic advertising grew despite the slowdown across all channels, industries, and geographies. Though the growth was slow (~6%) compared to previous years, programmatic spending in the US is expected to bounce back with a 25% growth rate in 2021.

II. Programmatic CTV Advertising Saw Substantial Growth

As per Nasscom, OTT consumption has skyrocketed in India as global brands like Amazon Prime and Netflix reported a 67% & 65% uptick in subscriptions, respectively. Indigenous players like Zee Network's Zee5 and AltBalaji recorded an 80% and 60% rise in subscriptions & user base, respectively.

As per a Research & Markets report, in Western Europe, 45 Million additional OTT subscribers were added in 2020. That is around 50% of the total OTT subscribers in the region! Given the lock-downs due to COVID-19, the average time spent viewing OTT Video-on-Demand content in the US alone has risen by 23% from last year.

With more people home and less on the move, the device of choice to view OTT content remained smart or connectedTV in the US. As per a report by eMarketer, 48% of all OTT content in the US was viewed on CTV.

Thanks to increasing OTT viewership and a rise in CTV adoption, Programmatic spending on CTV grew by more than 36% in 2020. The growth is expected to continue in the years to come.

Source: eMarketer

III. OOH became DOOH

The Traditional Out-of-Home media was seriously hurt during the pandemic. Being a traditional form of media and relying on people stepping out of their homes, this medium was expected to take a hit of 19% on its revenue in H1 2020, compared to 2019.

eMarketer estimates that traditional OOH media spending in the US will go down by 7%, while digital OOH will see a growth rate of 1.6% in 2020. Also, DOOH is getting a bigger share year on year, 33% compared to 31% share in total OOH ad spending.

IV. Marketers Getting ready for a cookie-less future

In August 2019, Google Chrome announced its intention to phase out all Third-Party Cookies within two years via a program called the "Privacy Sandbox". This was accompanied by a push towards user data privacy across the globe. In its latest software updates, Apple made it mandatory for Advertisers and Technology Providers to receive the user's permission through the AppTrackingTransparency framework to track them or access their device's advertising identifier.

This has permanently altered the programmatic landscape. The cookies technology has, for long, enabled publishers and ad buyers to show relevant advertising to specific users and get impressions that have been valuable assets in programmatic.

Without the Third-Party Cookies and Apple IDFA, advertisers are looking out for solutions to fill in this gap. First-Party data, probabilistic identifiers, third party identity resolution solutions, and contextual targeting are some of the alternatives that advertisers are looking at to counter the challenges to come.

A majority (>60%) of respondents in a study conducted by the Winterberry Group believe that first-party data with brands and publishers will be the key to help programmatic advertising flourish in the future.

V. Programmatic Audio Advertising growing steadily

Though still at a nascent stage, programmatic advertising in podcasts has gained momentum in the past year. Growing at 132%, the spending has $36 million in the US alone. Just 4.0% of total US podcast ad spending transacted or got fulfilled programmatically, up from 2.2% in 2019. That figure will increase to 8.0% in 2022.

To summarize, the past year has kept Advertisers, Publishers, and Technology Providers on their toes to innovate and deliver meaningful experiences to their audiences. With User Data Privacy at the forefront and emerging mediums, Programmatic Advertising needs to evolve to keep up with the pace of digital disruptions.

Interested to know what the future has in store for advertisers like you? Here is our take on the key trends that will push programmatic advertising to evolve further in 2021.

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