A sharp rise in marketers' willingness to buy mobile ad formats, plus media owners' increased willingness to experiment with a wider range of auction models will spur the US programmatic advertising sector to double in value between this year and 2016, when it will be worth $20.41bn. 

The figures were published recently in an eMarketer report that values the US ad tech sector at $10.1bn, up 137%, from last year, accounting for 45% of all online ad spend there in 2014. The forecasts comes as ExchangeWire prepares to make its first foray into the US with ATS New York taking place on 4 November.

Mobile advertising to drive programmatic spend

EMarketer expects ad served on wireless devices to contribute 44.1% of the total programmatic market this year ($4.44bn), further forecasting that such units will eclipse the value of desktop ads, generating 56.2% of all programmatic display spend in 2015.

Lauren Fisher, eMarketer, analyst, said: "Programmatic advertising has gotten a lot of hype in the past 12 to 24 months, but it’s finally fair to say that today, holdouts on participation are proving the exception, not the norm."

Fisher added the forecasts for mobile programmatic spend are in synch with eMarketer predictions elsewhere, with the research company earlier predicting the total US mobile advertising market will be valued at $17.73bn.

ExchangeWire sources has noted how Facebook's emergence as a force to rival Google in the programmatic advertising – especially with the launch of its cookieless targeting function via its revamped Facebook Atlas ad server – is likely to spur this growth.

In a recent piece for ExchangeWire, Itay Gadot, DMG, VP of sales and marketing, wrote: "Where Atlas could trump DoubleClick is in relation to cross-channel targeting. At face value, linking to a user’s Facebook account offers a much more effective way to run a cross-channel marketing campaign by making ad targeting consistent across the various devices consumers now use.  However, there are several unanswered questions."

Attendees at the upcoming ATS New York  will be able to further quiz Facebook on its cross-channel capabilities, such as whether it can overcome the challenges of cross-channel optimisation and analysis on video, and how its purported "partnership model" will trump Google's "full service model", as Lori Goode, Facebook, head of Atlas product marketing, will share a stage with Ci
aran O'Kane, ExchangeWire, co-founder and CEO, to discuss its ambitions.

Rise of programmatic direct

The report also predicts media owners' growing willingness to explore selling their media outside of using real-time bidding (RTB) auctions, instead opting for "programmatic direct" deals.

Although RTB will remain the dominant transaction method, accounting for 92.0% of programmatic ad dollars, or $9.25 bn, in 2014 (see chart). But from next year, eMarketer additionally forecasts that media trading using programmatic direct transactions will hit $8.57bn in value (or 42% of all US programmatic expenditure), representing 42% of the market.

In a bid to help those in the programmatic advertising industry presage upcoming developments in the market and its evolution from auction-based trading to more automated selling models, ExchangeWire has invited Jeff Green, The Trade Desk, CEO,  to present his opinions on developments that will happen in the near-future, and beyond in a keynote presentation at ATS New York. 

Advertisers want programmatic but how will media owners sell?

The eMarket report also notes the shift from open to private marketplaces and predicts that spending on private marketplaces to reach $3.31 billion as open exchange investments remain flat (see chart below, right).

This debate will also be debated at ATS New York where two separate panels will discuss issues on the sell-side of the industry, including speakers from Conde Nast, eBay Advertising, Gourmet Ads, Rakuten Marketing, among others, will participate.

The complex nature of the decisions facing media owners as they transition to a programmatic world was also recently highlighted in a recent ExchangeWire article where Ben Crain, Improve Digital, CSO, argued that publishers looking to increase their RTB revenues using a 'First Look' media trading model can seriously impact upon their bottom line.

"There can be unintended consequences when a publisher extends privileged position to a single party, placing them above countless other partners, many of whom themselves may be very important to the publisher’s advertising business," he wrote.

"Even with a fixed CPM that is higher than the average, it is practically guaranteed that for many impressions, the fixed price will be below what someone else is willing to pay for the same impression." Read more here. 

ATS New York takes place on 4 November, tickets are available but selling out FAST. See here for more details.