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Research Briefing: Programmatic hits road bumps heading into 2024

December 7, 2023
in General
Research Briefing: Programmatic hits road bumps heading into 2024
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By Catherine Wolf  •  December 7, 2023  •  5 min read  •

Ivy Liu

This article is part of a series covering our Programmatic Marketing Summit. More from the series →

Interested in sharing your perspectives on the media and marketing industries? Join the Digiday research panel.

In this week’s Digiday+ Research Briefing, we examine the challenges facing programmatic advertising, how publishers, brands and retailers are giving up on X, and how publishers and brands are rapidly increasing their use of AI, as seen in recent data from Digiday+ Research.

98% of agency clients spend at least a little on programmatic ads

The advertising industry will have to scramble to adapt to a cookieless world when Google officially disables third-party cookies in its Chrome browser next year. That’s based on the conversations that took place during the Digiday Programmatic Marketing Summit in New Orleans this week. Despite the fact that marketers will (allegedly) come face-to-face with Google’s deadline for removing third-party cookies in 2024, agency executives said they aren’t seeing enough urgency across the industry to prepare for a post-cookie world. 

For one attendee’s client, they “basically just stripped all cookies, all the tags, off of everything on programmatic. We were like, ‘OK, let’s just put those impressions out there. Welcome to 2002. Just throw the money at the wall.’”

Programmatic ads face other challenges as well. From the brand risks posed by generative AI, to the complications of made-for-advertising sites, to Netflix dialing up the programmatic side of its ad business, it’s been an eventful year. Nevertheless, agency clients still have a strong preference for programmatic display ads over direct-sold. Ninety-eight percent of agency pros whose clients put marketing budget into online display ads spend at least a very small portion of their budgets on programmatic ads, according to recent Digiday+ Research surveys.

On the other hand, publishers’ hopes for their programmatic ad revenue didn’t quite come to fruition this year. Nearly half of publisher pros (45%) said in Q1 2023 that building their programmatic business would be a large or very large focus in the next six months, but only 28% of publisher pros said in Q3 of this year that a large or very large portion of their revenues came from programmatic ads, down from 38% at the start of the year. Despite that, publishers do still rely heavily on programmatic revenue, and they still see it as a growing revenue source.

Insights and stats:

Eighty-seven percent of publisher pros told Digiday in Q3 2023 that they get at least a very small portion of their revenue from programmatic ads, up slightly from 85% in Q1. A whopping 91% of publisher pros said in Q3 that building their programmatic business even further will be at least a very small focus in the next six months, up from 84% in Q1.

“From the agency side, we’re getting a lot more pressure a year-and-a-half, two years ago, on figuring out a cookieless solution. Now, it’s kind of us pushing it a little bit more in the background and that has affected the resources, the teams [and] the time we’re putting into figuring this out.” — overheard at the Digiday Programmatic Marketing Summit

“I have a client that just pulled all of their [conversion] tags. A healthcare brand, the client had gotten nervous about privacy lawsuits popping up in California and decided to stop using all tracking mechanisms, including cookies. They basically pulled everything. So we’re back in 1994 world.” — Trina Arnett, head of marketing sciences at Butler, Shine, Stern & Partners

Read more about agencies’ programmatic investments

Digiday+ Research digest

ChatGPT turned a year old last week, capping a transformative year as countless companies experienced the rewards and risks of generative AI. For the media and marketing industries, AI technology is becoming ingrained in workflows and processes at a rapid pace. Less than half of publisher and brand professionals said in Q2 2023 that they were using AI. By Q3, 89% of publisher pros and 80% of brand pros said the same. This is according to a Digiday+ Research Q3 survey of over 200 publisher, agency and brand professionals. (Keep an eye out for our updated year-end report on AI adoption, coming next week.)

The stats:

Seventy-eight percent of brand pros, 76% of agency pros and 91% of publisher pros said in Q3 2023 that AI will be the technology that has the biggest impact on their businesses in the next few years.

When it comes to specific AI applications, most companies are using generative AI tools like OpenAI’s ChatGPT. In Q3 2023, 72% of agency pros, 70% of publisher pros and 59% of brand pros said that their companies are using generative AI.

Read more on publishers’, brands’ and agencies’ AI use

Advertising on X might be lucrative for a certain type of marketer, if they can overlook the deluge of hate speech, misinformation and violent content rampant on the platform. But it seems like most big advertisers are leaving X for good. Late last month, another round of advertisers including IBM, Apple, CNN and Disney bailed on the social network, after owner Elon Musk seemingly supported an antisemitic conspiracy theory earlier this fall.

The stats:

Publishers’ use of X has fallen significantly this year, according to Digiday+ Research’s annual survey of about 200 publishers. Seventy-three percent of publisher pros said this year that their titles posted content on X in the past month, down from 89% last year.

The number of brands and retailers who actively use X has dipped too. In 2023, barely more than a third of brand and retailer pros (35%) told Digiday their brands posted content to X in the past month, down from just shy of three-quarters (73%) last year.

Read more about brands’ and retailers’ use of XSee research from all Digiday Media Brands:

Digiday+ Research

Glossy+ Research

Modern Retail+ Research

https://digiday.com/?p=528073

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