Mobile Drives Continued Rise Of Programmatic Digital Display Ads

investors.com

Mobile is driving programmatic advertising growth, with mobile accounting for more than two-thirds of all programmatic digital display-ad spending this year, says eMarketer in a report on Tuesday.

Facebook, Alphabet‘s Google-owned YouTube, LinkedIn and others are helping to drive the trend.

Ad sales conducted by machines rather than ad salespeople — so-called programmatic ads — take less time to execute and cost advertisers less, which accounts for their popularity with advertisers though it tends to lower revenue for online-ad platforms.

U.S. programmatic digital display-ad spending is projected to rise to $27.4 billion in 2017, up 24%, said eMarketer. But that growth rate is declining from a projected 39% this year and 53% in 2015, the research group said.

This year, however, mobile programmatic spending will reach $15.45 billion in the U.S., representing 69% of all programmatic digital display-ad spending. That’s up from 60% in 2015 and 46% in 2014.

For programmatic mobile video ads, 2017 is expected to mark a tipping point as mobile surpasses desktop for the first time.

By 2017, programmatic mobile video ad spending will reach $3.89 billion, representing just over half of total programmatic ad spending in the U.S. But on desktop, programmatic video-ad spending will reach $3.73 billion next year, falling to 49% of total programmatic digital display-ad spending in the U.S., said eMarketer.

Last year, professional social networking site LinkedIn reported that its move toward programmatic ad sales had dragged down its revenue growth. Rapid adoption of programmatic ads last year also hit crowdsourced online-review site Yelp and Web portal Yahoo.

Yahoo, however, points to the long-term potential of such ads and has invested in them heavily, including through its $640 million purchase of BrightRoll, a leading provider of programmatic video ads, in 2014.

Yahoo has implemented broad cuts throughout company as it strives to spark growth and mulls selling part of the company, and in January it let go at least five managers who were working on Brightroll, according to the Wall Street Journal.

Last month, in a letter charging the current board of Yahoo with failing to deliver results for its shareholders, activist investor Starboard Value announced that it wants to sweep out all of the ailing Web company’s nine directors and replace them with its own slate during Yahoo’s 2016 shareholder meeting.

Yahoo stock was down nearly 2% in afternoon trading in the stock market today, near 36. Facebook stock was flat, while shares of Alphabet, Yelp and LinkedIn were down a fraction.