Zenith 2017

A new forecast from Zenith says programmatic trading will surpass $100 billion for the first time this year—and climb all the way to $147 billion by 2021.

The Publicis Groupe media agency says that programmatic is still on the rise, but its ad spend growth is slowing. The reasons: privacy issues and supply-chain problems that need to be resolved before accelerated growth can be restored.

Zenith’s Programmatic Marketing Forecasts 2019 also asserts that brands need to develop new targeting techniques using first-party data and customer data platforms due to the ongoing death of the cookie.

“The ongoing death of the cookie means that the industry needs to rethink the way we design targeting and personalization while respecting consumers’ privacy rights,” says Matt James, Zenith’s global brand president. “High-quality, first-party data is more vital to the success of programmatic marketing than ever before.”

Programmatic spend as a percentage of digital media spending is on the rise, even as year-over-year growth slows. As a slice of the overall digital pie, programmatic is expected to grow from 65% this year to 69% next year, reaching 72% by 2021.

The year-over-year growth is moving in another direction: falling from 35% last year to 22% this year—and sinking to 19% in 2020 and 16% in 2021.

The U.S. dwarfs other nations in terms of programmatic ad spend. The market this year is $67 billion—which makes up 64% of all programmatic ad spend. China ($10 billion) is next—although it has major growth on the horizon—and the UK ($7 billion) is third.

China’s spending on programmatic is expected to surge 41% to $16 billion by 2021.

“Although programmatic ad spend continues to grow at double-digit rates, it is being hindered as the industry struggles with privacy and supply-chain challenges,” says Jonathan Barnard, Zenith’s head of forecasting. “Once these challenges have been addressed, programmatic marketing has the potential to accelerate again during the next decade.”

Zenith defines digital media as all forms of paid-for advertising within online content, including banners, online video and social media, but excluding paid search and classified advertising.