LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global online advertising market is expected to grow at a CAGR of nearly 12% over the next five years due to the increased number of Internet users.
The research report titled ‘Global Online Advertising Market: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The growth is mainly augmented by the rise in the number of smartphones and social media users. Organizations are exploring the potential of online advertising to reduce the cost of acquisition per customers,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “The supply market is highly fragmented with most service providers operating in a highly competitive environment to acquire or retain client accounts. Global players are facing stiff competition from regional vendors as the latter offers services at competitive prices,” added Angad.
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Cost Saving Opportunities in Online Advertising
Adoption of various cost optimization levers allows buyers of online advertising services to not only realize direct cost savings but also enhance category management and value benefits (such as a reduction in procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the online advertising market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Header bidding, also known as pre-bidding or advance bidding, is a programmatic technique where publishers offer multiple ad exchanges by providing bidding for several demand sources.
Real-time bidding refers to the bidding of an advertising inventory that is bought or sold based on per impression through programmatic auction. Advertisers bid on an impression, and if the bid is won, the ad is posted on the publisher's website.
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Optimization of procurement practices saving aspects
Buyers opt for opportunities to de-bundle adaptation/localization of content creation. Within online advertising procurement, a global network agency handles the advertising strategy creation, and the adoption and localization part is outsourced to an independent local agency.
Buyers must procure services from providers that create and strategize content through methods such as content remarketing and cookie-based advertising. This helps in reducing cost and improves the reach of advertisements by ensuring that it influences the target audience.
Bundling of services saving aspects
Buyers need to engage with service providers that use tools such as Google Analytics, Webtrends, Adobe Analytics, and AppsFlyer to measure the effectiveness of the campaign. These tools enable buyers to measure ROI effectively when compared with traditional media. They also help them to understand the success of a campaign and optimize campaign performance.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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