NEW YORK--(BUSINESS WIRE)--At its annual client and industry leadership conference, Ad Revenue 5, PubMatic, the strategic selling platform for publishers, will unveil a study showing that Real-Time Bidding (RTB) is the fastest growing digital ad segment, predicted to increase to $13.9 billion in spending worldwide in 2016. The study, conducted by research firm IDC and sponsored by PubMatic, indicates that RTB will outperform all other digital ad segments including mobile, video or social advertising.
In-depth interviews with senior online advertising industry executives from around the globe revealed that RTB’s integration, automation and optimization of value chains has created an environment of ease, speed and labor-efficiency for both publishers and advertisers alike. The optimization and real-time dynamic of RTB inventory and sale has lead to vastly improved eCPMs for the publisher (with an average of a 100 percent increase in eCPM) and a significant increase in targeting capabilities and ROI for the advertiser.
Although publishers continue to express reservations about implementing RTB when trading premium inventory due to a lack of price controls, strategic sales platforms like PubMatic address and alleviate these apprehensions with the implementation of Private Marketplaces. These direct sales transacted with automation are the perfect testing ground for publishers to trial RTB with a limited amount of premium inventory and a set list of buyers. IDC predicts programmatic direct sales in the US will increase to $1.2B in 2016, primarily led by these burgeoning Private Marketplace strategies. The market intelligence company foresees that once publishers surmount these barriers to entry, most premium inventory could eventually be traded programmatically via RTB.
In 2011, global RTB based display ad spend increased by 237 percent compared to 2010, with the U.S.’s $2.2 billion RTB display spend leading the way. The U.S. will remain the most advanced market with RTB spend growing from $1.1 billion in 2011 to $8.9 billion in 2016 at a compound annual growth rate of 53 percent. The market share of RTB-based spending of all display ad spending will grow from 10 percent in 2011 to 27 percent in 2016, and its share of all indirect spending will grow from 28 percent to 78 percent.
The primary source of this growth will be RTB-based indirect ad sales. In the U.S., the majority of indirect sales will be RTB-based by the end of 2013 with the UK, France, Germany and Japan following quickly thereafter.
In Europe, among the three major markets (UK, Germany and France), the UK is farthest along in adopting RTB. IDC projects spending in the UK to grow at a compound annual growth rate of 54 percent through 2016, with RTB-based display ads accounting for 12 percent of all spend in 2012 already – up 108 percent year over year.
German RTB spending will account for 8 percent of total display ad sales in 2012, an increase of 171 percent from the 2011 spend. RTB’s market share in indirect ad sales will be 23 percent in 2012, up from 9 percent in 2011.
In France, 8 percent of all display ad sales will be generated using RTB in 2012, a growth of 120 percent compared to the 2011 spend of €23 million or 4 percent of total display ad sales. Its market share within indirect ad sales will be 24 percent in 2012, up from 11 percent in 2011.
The white paper notes:
RTB has significantly impacted the way in which digital inventory is traded. With the substantial benefits of automation, integration and optimization, the RTB revolution is upon us. As long as both publishers and advertisers continue to reap the benefits, it’s clear that RTB will be adopted globally.
Information-gathering and analysis for the IDC White Paper, sponsored by PubMatic, as led by Karsten Weide, Program Vice President, Digital Media and Entertainment, and gathered by IDC through multiple sources including in depth interviews with senior online advertising industry executives in the U.S., UK, Germany, France, Japan, China and India as well as IDC's own proprietary research. IDC uses a predictive model to forecast RTB data. This report was a follow-up to the report PubMatic commissioned from IDC for October 2011’s Ad Revenue Conference.
PubMatic’s full IDC White Paper, sponsored by PubMatic, Real-Time Bidding in the United States and Worldwide, 2011-2016 (October 2012) is available to download here: http://www.pubmatic.com/reports-and-whitepapers.php
About PubMatic
Since 2006, PubMatic has been at the forefront of developing innovative technology to help publishers automate the process of evaluating and selling their advertising inventory. PubMatic (http://www.PubMatic.com) gives premium publishers a real-time media selling platform for managing revenue and brand strategy. PubMatic’s platform combines real-time bidding (RTB), the most comprehensive brand protection tools, unified optimization and audience insights as well as hands-on support to serve the world’s leading publishers. PubMatic is privately held, backed by funding from August Capital, Draper Fisher Jurvetson, Nexus Venture Partners, and Helion Ventures, and has offices in the U.S., Europe and Asia.