A new study was recently released from IAB and PwC concerning the state of the programmatic ad industry today. In the study it was found that of the $10.1 billion spent on this type of digital advertising last year, $6.6 billion of it went to just the top ten companies. That is approximately 66% of the total revenue. On top of that, another 9% went to the next 15 companies on the list, meaning the top 25 programmatic ad networks were pulling in just under 80% of the total revenue.
While just about every industry has some ‘major players’ and then a lot of smaller companies, these results have many people concerned. In fact, some reports on this story have even been tossing around the ‘monopoly’ term, though I think that is a little extreme.
When a large percentage of power (or in this case, revenue) is flowing through a small number of companies like this, it can cause some issues.
The report also found that about 70% of all programmatic ads went through open auctions on demand side platforms.
The IAB did predict that this dominance of these few companies would begin to go down in the near future, however. They believe that smaller, more tailored companies will be growing in popularity. They can offer premium options for getting higher quality ads with less risk of fraud.
Programmatic advertising makes up approximately 1/5 of the total digital ad industry right now, so even with this concentration of revenue toward a few companies; it is not impacting the total online marketing industry too much.
