Tuesday, August 07, 2012

Analyst: RTB Will Be 34% of Display Revenues in Five Years

A new report from Parks Associates concludes RTB tech will support approximately 50% of North America display ad volume five years from now. From a revenue standpoint, the forecast is somewhat less dramatic: RTB revenues flowing to display advertising will rise from $1.6 billion in 2012 to $6.8 billion in 2017. Expressed as a percentage of total display ad spending, that’s a rise of 22 percentage points, from 12% of this year’s estimated $14 billion to 34% of 2017?s estimated $20.1 billion.

What of the disparity between impression and revenue growth? It may say more about Parks methodology than about the market. The report doesn’t include video, social, or mobile RTB, since those platforms are still nascent and hard to predict. But it’s reasonable to assume sizeable budgets will migrate from display to all three categories in that timeframe. Hence the overall RTB spend will be much larger than the $6.8 billion estimated in this report.

Another big unknown in forecasting RTB growth has to do with how rapidly large brand advertisers will adopt the technology. We asked Heather Way, research analyst with Parks Associates, to weigh in on this. She largely agrees: ”When we talk to the major agencies, there are so many different variables that go into their rate of adoption. It’s hard to say X percent of agencies are going to be adopting this, because it varies so widely based on their clients.” But even given this extreme variability, she says, “RTB will become the new defacto display online buying method.”

Another important side note: even though this report is talking about North America, it’s mostly a U.S. phenomenon. RTB in Canada is still just 1 to 2% of total North America RTB revenues, says Parks.

From the article, "Analyst: RTB Will Be 34% of Display Revenues in Five Years" by  Zach Rodgers.

Next: Human Demand’s Schwartz: It’s Not Too Early To Focus On Mobile RTB

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