Reasons for the growth in programmatic ad trading

As incumbent magazine and newspaper publishers migrate their content and advertising from print to online, many are holding back from programmatic trading of advertising for fear it will drive rates and margins downwards. At the same time, Internet companies are moving to increase their share of advertising budgets by investing in systems to trade ads automatically based on information on website visitors.

Source: PwC Global Entertainment and Media Outlook 2014-2018

As these trends play out, online publishers have seen a rise in their digital ad revenues, whereas traditional publishers are struggling to grow theirs. This divergence is being attributed (at least in part) to the rise of programmatic ad trading.

But for traditional publishers, ignoring the problem won’t make it go away: whatever approach they decide to take to programmatic ad trading, the fact is that it’s here to stay as part of the marketing mix.

According to the last Global Entertainment and Media Outlook released by PwC today, publishers should actively embrace programmatic trading as one element of a suite of advertising options.

There are clear reasons for the growth in programmatic ad trading. On the advertiser side, it allows brands to scale more quickly and target ads more precisely. And its heavy usage by online-only publishers is one reason why marketers are shifting some of their budget away from traditional publishers. However, programmatic ad trading can also bring benefits for print publishers looking to grow their online presence.

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