UK real-time bidding (RTB) spend is set to rise to £546m in 2016, up from £62m in 2011, according to research conducted by PubMatic and the International Data Corporation (IDC), new media age can reveal.
RTB spend is expected to reach £131m by the end of 2012, which is equivalent to 12% of total online display sales. That’s a 108% increase compared to 2011 when it accounted for just under 6%.
Additionally, RTB will account for 29% of indirect ad sales, up from 16% in 2011, in the UK, which is the fastest adopter of the trading tool in Europe.
Gareth Holmes, UK publisher director of PubMatic reckons this rise in RTB spend is indicative of the market’s desire to embrace audience buying.
“What RTB offers therefore is a more efficient process for doing so with greater transparency into pricing and ROI,” he told new media age.
“But this can only happen with better access to data which allows the buyer to identify the true value of each impression. With agencies really embracing programmatic trading we’re finally seeing RTB scale to the levels reported in the IDC report.”
Worldwide, RTB-based spending on display advertising is predicted to grow rapidly, increasing from $1.4bn (£870m) in 2011 to $13.9bn (£8.6bn) in 2016, with only the US spending more than the UK.
RTB’s share of total display advertising is also expected to quadruple, rising from 5% to 20% over the next four years.
Holmes predicted mobile will help to increase the role of RTB going forward, adding “I believe RTB will scale even further with the expansion onto mobile platforms and increasing access to first party data.”
However, the research showed that RTB will penetrate mobile sales much more slowly as the ad ecosystem is not yet sophisticated enough, plus mobile raises challenges that online advertising doesn’t, according to the IDC.
It warned that as internet use becomes mobile first it will put pressure on mobile advertising vendors to develop the ecosystem to a level that will support RTB more easily.
Mobile RTB might also be accelerated by the fact that a high percentage of mobile ads are sold through ad networks as it is, which could make the transition smoother.
The research also revealed that over the next five to ten years “significant portions” of premium inventory will be sold through RTB platfroms. Initially it expects this to be through private marketplaces, but later on it will be through public programmatic trading.
Holmes said, “The growth of private marketplaces is giving publishers greater control of their own inventory being traded via RTB and allowing for a more holistic view across both direct and indirect inventory.”
Last month, display marketing firm Adform carried out a poll, which revealed that just 32% of marketers actually understand what the acronym RTB stands for, which CEO Gustav Mellentin said could isolate the sector from the rest of the digital marketing industry (nma.co.uk 17 October 2012).