Major multinationals hike programmatic budgets while seeking greater control
WFA study finds increase of 11 percentage points expected 2017/18
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Key concerns include media and data transparency Major multinationals have continued to increase ad spend via programmatic channels despite widely publicised concerns about brand safety and transparency, a new study from the World Federation of Advertisers has found.
The Future of Programmatic found that budgets are expected to be up by 11 points from 17% of total digital media investment in 2016/17 to 28% in 2017/18 on average globally with further increases due this year, with mobile (up for 87% of respondents) and video (up for 68%) due to benefit from increased investment. There will also be additional focus on new programmatic channels such as ‘Advanced TV’ and Digital OOH (77% will increase spend in these areas).
North America is the region where programmatic is most established with spend expected to hit 31% of digital budgets in 2017/18. Latin America and China are the least established at 20%.
The study, which was conducted alongside the WFA’s marketing software partner dataxu, is based on responses from 28 companies spending in excess of $50bn globally on marketing communications. The research was carried out in November and December last year.
Alongside the rise in programmatic spend, marketers have also been pushing for changes to address their concerns around transparency. It’s now not uncommon for clients to have ‘disclosed’ contracts and 45% believe they have a fully transparent relationship with their programmatic partners. A further 41% of respondents say that increasing transparency with programmatic partners is a major priority for 2018.
Data transparency is also moving up the agenda with 62% reporting that addressing segment mark-ups and data arbitrage is a major priority for 2018, up from 14% in 2017.
“In terms of its public relations with the wider marketing community, it’s fair to say that 2017 hasn’t been a great year for programmatic. But there’s too much momentum now, and in spite of the issues, clients do generally see the benefits – brands will spend a growing share of their digital ad budgets in programmatic in 2018. But that doesn’t mean they can’t take action to improve the ecosystem in which they operate,” said Matt Green, Global Lead – Media and Digital Marketing at the WFA. “There will be continued pressure on contracts, greater in-house understanding and on-going efforts to make better use of data in attribution models in 2018. The major priority for the short-term is preparing for the arrival of GDPR, for which the clock is ticking.”
Other findings include:
- With GDPR due to come into force on 25th May, it’s unsurprising that 83% of respondents see compliance as a priority for 2018. Only 10% say they have already ensured their programmatic activity is fit for purpose post GDPR.
- Just 7% of respondents have a robust multi-touch attribution model at the moment but this is a key priority for 2018 with 69% saying they are focusing on this issue.
- Although ‘walled gardens’ have been a big focus in 2017, two-thirds of advertisers are looking for further changes with walled gardens this year. Gardens remains an issue and concern. Only 10% believe they have already addressed walled garden and data access issues and 66% see it as a priority.
- Marketers have been working hard to deliver internal ‘media transformation’, with 24% of respondents feel they have already brought their internal staff up to speed on programmatic. Forty-five per cent are prioritising internal capability this year and nearly 28% of respondents are looking to recruit programmatic specialists.
- Advanced data usage is becoming commonplace in programmatic. Nearly 9 in 10 (87%) respondents model data for best customer ‘lookalikes' and target these segments (up from 38% in 2015). Meanwhile 74% of respondents use programmatic approaches to target specific customers and segments (with relevant in-context messages).
“It’s no surprise that marketing budgets devoted to programmatic are slated to be up in 2018. With the laser focus on transparency and cleaning up the supply chain from brands, agencies and technology partners, I think there’s more confidence in the ability of programmatic to deliver true ROI than ever before as we as an industry continue to tackle the top-of-mind challenges facing marketing,” said Mike Shaw, VP EMEA at dataxu.
About the WFA
The World Federation of Advertisers (WFA) is the voice of marketers worldwide, representing 90% of global marketing communications spend – roughly US$900 billion per annum – through a unique, global network of the world’s biggest markets and biggest marketers. WFA champions responsible and effective marketing communications worldwide. More information at www.wfanet.org
For more information or questions, please contact Matt Green at email@example.com