Pubmatic, 2020 Global Digital Ad Trends
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2020 GLOBAL DIGITAL AD TRENDS Innovation is a constant force driving the evolution of the digital media ecosystem. Digital channels are expected to provide nearly all incremental spend flowing into global ad budgets through 2020, and programmatic will account for most of that growth. Publishers and media buyers must understand the nuances and key trends impacting the market in order to capitalize on the vast opportunities available. In such a fast-evolving industry, reliable data is the foundation of good business decisions. TABLE OF CONTENT This is a compilation of the most significant US DIGITAL & PROGRAMMATIC MARKET 2 market developments in the programmatic ecosystem to inform your 2020 strategies. GLOBAL DIGITAL & PROGRAMMATIC MARKET 11 This guide includes global advertising forecasts, growth trends for emerging and MOBILE ADVERTISING 19 evolving formats, trends in header bidding, VIDEO ADVERTISING 25 private marketplaces, and more! PRIVATE MARKETPLACES 34 © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 1 US DIGITAL & PROGRAMMATIC MARKET © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 20202019 GLOBAL DIGITAL AD TRENDS / 2 PROJECTED AD 13.2% REVENUE GROWTH 11.8% 9.5% IN THE UNITED STATES, 3.6% BY MEDIA TYPE 3.0% -0.4% -2.6% -3.3% -4.4% Digital media will continue to drive a significant amount of advertising growth -14.8% -16.3% in 2020. The Summer Olympics and US -17.9% Presidential elections in 2020 will bring incremental advertising revenue and drive local television spending. DIGITAL NATIONAL TVNATIONAL TVLOCAL PRINT RADIO HOME OF OUT (INC. CE) (INC. CE) 2019 2020 Source: Magna Global © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 3 $201.8 $200 PROJECTED US $187.8 DIGITAL AD SPEND Billions $172.3 $151.3 $150 $129.3 66.7% 62.2% 64.7% 58.5% 54.2% $100 $50 For the first time, US digital ad spending surpassed traditional media spending in 2019. Digital is projected $0 to reach over two-thirds of total media 2019 2020 2021 2022 2023 spending by 2023. Digital ad spend % of total media ad spend Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 4 PROJECTED US $120 Billions $108.9 DIGITAL DISPLAY $100 $101.1 AD SPEND $92.2 $80 $80.6 $68.6 $60 53.1% 53.2% 53.5% 53.8% 54.0% The share of digital spend allocated $40 to display advertising is expected to remain flat over the next four years. $20 However, as digital advertising as a whole rises, display ad spend is $0 projected to grow 59% between 2019 2019 2020 2021 2022 2023 and 2023. Digital display ad spend % of total digital ad spend Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 5 PROJECTED SHARE OF US DIGITAL DISPLAY AD SPEND, BY PURCHASE METHOD NON-PROGRAMMATIC 2020 15.0% 2019 16.5% PROGRAMMATIC 2020 The benefits of automation drives 85.0% nearly all digital display ads through programmatic advertising. 2019 Only a sliver of ad buys are sold 83.5% directly and manually. Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 6 PROJECTED SHARE OF US REAL-TIME BIDDING (RTB) AD SPENDING OPEN EXCHANGE 2020 49% PMP 2020 51% Thanks to continued brand safety and ad quality issues, buyers and sellers are directing more dollars to private marketplaces (PMP) in the US. Private marketplaces will overtake open exchange ad spending for the first time in 2020. Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 7 PROJECTED SHARE OF US PROGRAMMATIC DIGITAL DISPLAY AD SPEND, BY DEVICE CONNECTED TV 7.2% DESKTOP MOBILE 9.5% 83.3% Mobile ad spending will represent the majority of programmatic transactions in the US come 2020. While the share of desktop ad spending declines, connected TV is expected to grow and capture almost 7% of the market. Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 8 US PROGRAMMATIC VIDEO AD SPENDING, BY DEVICE $40 $39.4 Video ad spend Billions $33.4 $30 $27.2 $20.7 75.1% $20 74.4% Mobile $16.2 Half of all programmatic 73.2% ad dollars in the US will 70.9% $10 come from video by 2021, 67.4% Desktop/ 9.0% with mobile accounting 11.2% Laptop 19.6% 14.4% for three-quarters of the 25.3% 15.9% 9.5% 12.5% 14.3% Connected TV spending. $0 7.3% 2017 2018 2019 2020 2021 Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 9 BUYERS’ SUPPLY PATH OPTIMIZATION PLANS IN 2020 NOT ACTIVELY ACTIVELY IMPLEMENTING IMPLEMENTING BUT PLAN TO* 45% 28% Transparency and efficiency have now become key considerations for marketers. Most US buyers are either actively implementing supply path optimization (SPO) or planning NO PLANS TO to start within the next year. IMPLEMENT* 27% Source: Digiday/PubMatic *within the next 12 months © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 10 GLOBAL DIGITAL & PROGRAMMATIC MARKET © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 11 PROJECTED TOTAL MEDIA AD SPENDING SHARE WORLDWIDE, BY MEDIA, 2018 AND 2021 28.5% Television 31.9% Internet Display 26.7% 21.3% Internet Paid Search 18.8% 17.3% 6.2% Digital display ads, including Newspaper 8.1% video, is the fastest growing Outdoor 6.4% ad format. It will account for 6.5% over a quarter of total media ad Radio 5.5% spending in 2021, up from a fifth 5.9% 3.1% in 2018. Digital as a whole will Magazines 4.4% contribute to half of total media Internet Classified 3.9% ad spending worldwide. 3.7% Cinema 0.9% 0.7% 2018 2021 Source: Zenith © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 12 PROJECTED $600 Billions $517.5 WORLDWIDE $500 $479.2 DIGITAL AD SPEND $435.8 $400 $385.0 $333.3 60.5% 58.8% $300 56.6% 53.6% 50.1% $200 Global digital ad spend growth $100 rates remain strong. By 2020, digital advertising will represent $0 that majority of total media ad 2018 2019 2020 2021 2022 spend worldwide Digital ad spending (billions) % of total media ad spend Source: eMarketer © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 13 TOP 5 DIGITAL AD SPEND MARKETS WORLDWIDE $ billions and % YOY change Digital ad spending in China and the US are expected to grow faster than the global average of 16% between 2019 and 2020—expanding their lead as the largest ad markets in the world +17% YOY CHANGE $151.3 $140 Billions $129.3 $120 +19% $100 YOY CHANGE $94.6 $80 $79.8 $60 $40 +10% YOY CHANGE +6% $20 YOY CHANGE +9% $19.6 $21.6 YOY CHANGE $14.2 $13.4 $9.4 $0 $8.6 US CHINA UK JAPAN GERMANY Source: eMarketer 2019 2020 © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 14 © 2018 PUBMATIC, INC. ALL RIGHTS RESERVED© 2018 PUBMATIC, Source: eMarketer Source: digital increasingly users. of andmobile populations to large home fastest-growing isthe India digital byRussia. are Both advertising followed world, inthe market change and%YOY $ billions ADSPEND MARKETS WORLDWIDE DIGITAL MAJOR Billions $9 $0 $1 $2 $3 $4 $5 $6 $7 $8 CANADA +12.5% AUSTRALIA +7.5% FRANCE +11.7% BRAZIL +13.0% SOUTH KOREA +7.5% RUSSIA +22.5% 2019 ITALY +11.5% NETHERLANDS +11.6% 2020 SPAIN +9.8% SWITZERLAND +13.6% INDIA +24.0% SWEDEN +10.4% 2019 GLOBAL DIGITAL ADTRENDS DIGITAL 2019 GLOBAL 2020 GLOBAL DIGITAL ADTRENDS DIGITAL 2020 GLOBAL MEXICO +12.0% NORWAY +8.5% DENMARK +8.2% / 15 © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED PROJECTED PROGRAMMATIC AD SPEND WORLDWIDE $ billions and % of digital display ad spend $100 $98.2 Billions $83.8 $80 $70.2 $60 $56.5 Programmatic 65% 68% transactions will $42.9 62% $40 44% 57% represent more than 51% two-thirds of digital 37% $30.6 display ad spend around $20 20% $19.9 the globe in 2020. 10% $8.6 $3.7 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Programmatic ad spend % of digital display ad spend Source: Zenith © 2019 PUBMATIC, INC. ALL RIGHTS RESERVED 2020 GLOBAL DIGITAL AD TRENDS / 16 TOP 5 PROGRAMMATIC* DIGITAL AD SPEND MARKETS WORLDWIDE $ billions and % YOY change Double-digit YOY growth rates remain the norm among the largest programmatic advertising markets in the world. China (+19%), Japan (+18%) stand out, however, highlighting revenue growth opportunities for APAC publishers whom are prepared to offer ad inventory through automation next year. +14% $25 YOY CHANGE $22.3 Billions $20 $19.5 $16 $12 +19% YOY CHANGE $8 $8.3 $6.9 +15% +18% YOY CHANGE $4 YOY CHANGE +17% $3.8 YOY CHANGE $3.3 $2.8 $3.4 $1.7 $0 $1.4 US CHINA UK JAPAN GERMANY Source: Magna Global; PubMatic calculations 2019 2020 *excludes search and social media © 20182019 PUBMATIC, INC. ALL RIGHTS RESERVED 20192020 GLOBAL DIGITAL AD TRENDS / 17 *excludes search and social media and social search *excludes calculations PubMatic Global; Magna Source: Millions next valuation year. abillion-dollar to reach largest market programmatic seventh the will become andBrazil fastest-growing willbethe India Indonesia, in2020.Brazil digital programmatic markets ad change and %YOY $ millions MARKETS WORLDWIDE ADSPEND DIGITAL PROGRAMMATIC* MAJOR $1,000 $1,200 $1,400 $1,600 $200 $400 $600 $800 $0 AUSTRALIA +20% BRAZIL +38% FRANCE +18% ITALY +9% NETHERLANDS +11% SPAIN +21% 2019 CANADA +8% INDIA +48% 2020 INDONESIA +54% MEXICO +18% SWEDEN +12% HONG KONG SAR +29% 2020 GLOBAL DIGITAL ADTRENDS DIGITAL 2020 GLOBAL ARGENTINA +36% KOREA +29% NORWAY +9% / 18 © 2019 PUBMATIC, INC.