JAN 2024

Evelyn Mitchell-Wolf

Programmatic Ad
Spending Forecast
H1 2024
Cookie Deprecation Has Begun. Now What?
Programmatic advertisers face a yearlong road filled with potholes as Google slowly deprecates third-party
cookies in Chrome. Some will continue hand-wringing; others will double down on new testing opportunities.
But spending won’t let up. This eMarketer analyst report covers our latest programmatic ad spending
forecasts, including if cookie deprecation will disrupt the longstanding spending dynamics in the space.

Presented by
 Contents

Executive Summary 3

Programmatic shoulders the digital display ad market 4

Programmatic growth will outpace nonprogrammatic—by a lot 4

Cookie deprecation won’t change advertisers’ preferred transaction methods and devices 5
The open exchange continues its long descent 5
The programmatic CTV market is officially larger than its desktop/laptop counterpart, but mobile
still dominates 6

Walled gardens are in a deadlock against the open web 7

Walled gardens’ share of programmatic ad spending peaked in 2020 7
But advertisers will spend about $2.50 with walled gardens for every $1 they spend on the open web 7
And the open web is about to become the Wild West again 8

What’s next for programmatic advertising? 8

Insider Intelligence Interviews 11

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 Executive Summary

Programmatic Ad Spending Forecast H1 2024

■ Programmatic ad spending will outpace

nonprogrammatic in 2024 (see leading chart).
Automation gives advertisers more flexibility and fluidity
but carries drawbacks when it comes to transparency
and control. Still, the upside prevails, and more than 9
in 10 display ad dollars will transact programmatically
this year.

■ Cookie deprecation has already left its mark on

ad spending. Programmatic advertisers have been
refocusing strategies around first-party data and
investing more heavily in closed and private ecosystems.
This will leave the open exchange with less than 10%
market share by the end of 2024.

■ Device-level spending trends will hold steady this

year. The programmatic connected TV (CTV) market
is officially larger than its desktop/laptop counterpart.
Both are still dwarfed by mobile, which has hovered
around 70% market share since 2018.

■ The open web will hold its own against walled

gardens. Despite the challenges presented by cookie
deprecation and generative AI (genAI), the open web
is slowly gaining on walled gardens, many of which
suffered setbacks from Apple’s privacy changes in 2021.

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 Programmatic shoulders the Programmatic growth will outpace
digital display ad market nonprogrammatic—by a lot
■ Programmatic wins on flexibility and fluidity.
Programmatic advertising is the prevailing means of
Challenges introduced by automation—including ad
reaching consumers digitally, accounting for more fraud and algorithmic bias—are far outweighed by
than 9 in 10 display ad dollars in the US this year. the benefits. Programmatic offers agility in spending
Programmatic ad spending growth is driven primarily cadence and channel mix and is often favored by
by video formats across streaming platforms and smaller advertisers who lack the resources to negotiate
social networks. directly with publishers.

■ But transparency and control aren’t a given. It takes

US Programmatic Digital Display Ad Spending, concerted effort to curate a programmatic supply chain
2019-2025 free of unnecessary or unknown intermediaries. And
billions, % change, and % of total digital display ad AI-powered products like Google’s Performance Max
spending and Meta’s Advantage+ give advertisers very little
$178.25 governance over budget allocations and even less
89.6% 90.5% $157.35 reporting granularity.
88.1% 89.3%
86.4%
91.3% 92.1%
$135.72 ■ Still, programmatic kept display afloat in 2023. In a
$121.84
$111.87 year beleaguered by protracted economic uncertainty,
nonprogrammatic display ad spending was hit
$79.95 harder. Although it will recover somewhat this year,
39.9%
$63.40 nonprogrammatic display will still grow at only a third of
the pace of programmatic.
31.7%
26.1%
15.9% 13.3%
8.9% 11.4%

2019 2020 2021 2022 2023 2024 2025

Programmatic digital display ad spending
% change
% of total digital display ad spending

Note: digital display ads transacted or fulfilled via automation, including everything from
publisher-erected APIs to more standardized RTB technology; includes native ads and ads
on social networks like Facebook and X; includes advertising that appears on desktop and
laptop computers as well as mobile phones, tablets, and other internet-connected devices
Source: Insider Intelligence | eMarketer Forecast, Dec 2023
284282 Insider Intelligence | eMarketer

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 Cookie deprecation won’t change
advertisers’ preferred transaction
methods and devices
A lot will change when third-party cookies are
deprecated in Chrome, but some general programmatic
ad spending patterns will stay the same. Programmatic
direct will remain the most popular transaction method,
while mobile will keep its sizable lead over other
device categories.

The open exchange continues its

long descent
■ Open auctions are out of vogue. When we started
forecasting open exchange ad spending in 2013,
it represented nearly three-quarters (74.5%) of
the programmatic display market. But since then,
advertisers have invested more heavily in private
marketplaces and closed ecosystems like social media
platforms and retail media networks (RMNs), which fall
under programmatic direct.

■ Direct pathways are all the rage. Advertisers

are trimming the fat (e.g., inventory resellers,
underperforming or redundant partners) from real-
time bidding transactions to reduce hidden fees,
minimize risk of data leakage, and decrease their
carbon footprints. In the case of CTV, prioritizing direct
pathways can theoretically help with frequency capping.

■ Programmatic is refocusing around first-party

data. As signal loss reaches a fever pitch with cookie
deprecation, ad buyers and sellers are harnessing
their own consumer data for programmatic activation
across transaction methods. Six in 10 buyers reported
they’d be focusing somewhat or significantly more on
ad placements with publishers with first-party data
in 2024, per November 2023 survey data from the
Interactive Advertising Bureau (IAB).

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The programmatic CTV market is ■ But this milestone occurred later than we
anticipated. Our April 2023 forecast had CTV eclipsing
officially larger than its desktop/laptop desktop/laptop in 2022. This is due to a retroactive
counterpart, but mobile still dominates downward revision in programmatic CTV ad spending.
Advertisers are still increasing spend, just not as quickly
■ Mobile soaks up most programmatic display ad
as expected thanks to issues with measurement,
dollars. Its market share has hovered around 70%
frequency capping, and ad fraud.
since 2018. That stability is noteworthy considering
Apple introduced its AppTrackingTransparency
(ATT) framework in 2021. Although targeting and
measurement on iOS have gotten harder, advertisers
haven’t shifted spend out of mobile.

■ Programmatic CTV investment has finally

surpassed desktop/laptop. It’s been a long time
coming: CTV programmatic display ad spending growth
has been at least double that of desktop/laptop since
2018. And it’s not just advertisers’ budgets. Consumers
are averaging less daily time on computers and more
than making up for it on their CTVs.

■ Programmatic is on upfront dockets. With the steady

drumbeat of cord-cutting looming over the industry,
streaming—and programmatic—will play a bigger role
than ever in this year’s negotiations. Advertisers will
use conversations started last year as a springboard
to incorporate more programmatic spending into their
upfront deals. By the end of 2024, more than 4 in 5
new CTV ad dollars will transact programmatically, per
our forecast.

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 Walled gardens are in a deadlock
against the open web
As legacy identifiers become less reliably available,
alternative sources of consumer data become more
critical. This has intensified competition around sellers’
first-party data, with some platforms keeping it under
lock and key through walled garden business models.
Walled gardens represent the majority of programmatic
display ad spending, but the open web is holding
its own despite obstacles presented by genAI and
cookie deprecation.
Our definition of walled gardens excludes any platform that
makes any of its inventory available through resellers. View our
forecast for US walled garden programmatic digital display ad
spending here.
Walled gardens’ share of programmatic
ad spending peaked in 2020
■ Apple’s ATT changed the game for social networks.
It didn’t shake mobile’s dominance of programmatic
display, but it did disrupt social platforms’ ad businesses.
Social media constitutes roughly half of walled garden
programmatic ad spending, so ATT-related volatility is
reflected in our forecast from 2021 onward.
Presented by
■ Retail media’s growth isn’t enough to offset social’s
losses. Most leading RMNs, like Amazon and Walmart,
are classified as walled gardens. But search, not display,
still accounts for the bulk of RMN investment. Although
search ads are largely automated, they aren’t captured
in our programmatic ad spending forecast.
Looking for a deeper dive on our retail media ad spending
forecast? Check out our November 2023 report: Retail Media
Forecast H2 2023.
■ CTV splits its vote between walled gardens and
the open web. Streaming platforms are notorious
for keeping consumer data close to their chests. But
because some CTV display placements are sold by
device manufacturers (e.g., Samsung, LG, Roku) and
ad tech partners (e.g., The Trade Desk, Microsoft,
FreeWheel), most streamers are categorized as open
web under our definition. One notable exception:
YouTube, which will represent about a third of
programmatic CTV ad spending this year.
But advertisers will spend about $2.50
with walled gardens for every $1 they
spend on the open web
■ Walled gardens offer scale and consistency. While
some platforms skew toward certain demographics,
they typically have large, relatively stable user bases.
For example, advertisers can reach over half of internet
users on Facebook alone. Open web publishers, on
the other hand, can have unpredictable traffic patterns
driven by search engine algorithms.
■ They also have the upper hand in identity resolution.
With large logged-in audiences, walled gardens are
swimming in deterministic consumer data—for now. As
privacy litigation and enforcement heat up, the largest
platforms, like Meta’s Facebook and Instagram, are
having their ad-supported business models scrutinized
and may soon have less data at their disposal, or be
forced to share their data with competitors.
Copyright © 2024, Insider Intelligence Inc. All rights reserved. Page 7
And the open web is about to become
the Wild West again
■ Made-for-advertising (MFA) inventory is
ballooning. In early 2020, MFA supply comprised about
5% of web auctions, according to data from Jounce
Media cited by the Association of National Advertisers
(ANA). By mid-2023, that figure had climbed to nearly
30%. As genAI continues to proliferate, MFA sites will
get even easier to maintain, flooding the market with
substandard inventory.
■ Plenty of MFA bid requests are met with demand.
Eleven percent of open programmatic ad spending
worldwide went to MFA sites in October 2023,
according to Pixalate data. MFA sites took an even
larger share (16%) of open programmatic ad spending
in North America.
What’s next for
programmatic advertising?
■ Privacy Sandbox tests will gradually pick up steam.
Now that a truly cookieless population exists on
Chrome, urgency will intensify. Expect more practical
guidance and tools from trade bodies like the IAB Tech
Lab. And stay tuned for the UK’s Competition and
Markets Authority to weigh in.
■ Smaller advertisers will pump the brakes on the
open exchange—temporarily. Those with fewer
resources will allocate more of their precious dollars
to closed ecosystems while the open web adjusts to
cookie deprecation. They’ll return when the heavy lifting
is done and long-awaited consolidation of identity
solutions has finally taken place.
■ Programmatic will wind deeper into upfront
commitments. Serious conversations that opened
new doors during the 2023 upfronts will gain traction
this May. With CTV accounting for virtually all of
the converged TV market's growth, sellers will lean
into buyers’ demands for budget fluidity by using
programmatic as an incentive to encourage larger
upfront commitments.

■ Cookie deprecation will cause chaos. Third-party

cookies still play a huge role in digital advertising,
especially for publishers with primarily non-logged-in
audiences. As of summer 2023, about three-quarters
(73%) of brand, agency, publisher, tech, and data
platform representatives worldwide reported having
adopted one or more cookieless identity solutions,
per ID5.

■ It’s already started. Google has activated its Tracking

Protection feature for 1% of global Chrome users as
of January 4, 2024, deprecating third-party cookies
for upward of 30 million people. Targeting and
measurement strategies might not be upended yet,
but Google plans to roll out Tracking Protection to all
Chrome users by the end of this year.

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 Welcome to the new era of digital advertising

This sponsored article was contributed by LiveRamp.

Travis Clinger
Chief Connectivity and Ecosystem Officer
LiveRamp

Have you heard? Google has begun deprecating third-party Power addressable campaigns globally
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 Insider Intelligence Interviews

Insider Intelligence | eMarketer research is based on the idea that multiple sources and a variety of perspectives lead
to better analysis. Our interview outreach strategy for our reports is to target specific companies and roles within those
companies in order to get a cross-section of businesses across sectors, size, and legacy. We also look to interview
sources from diverse backgrounds in order to reflect a mix of experiences and perspectives that help strengthen
our analysis. The people we interview for our reports are asked because their expertise helps to clarify, illustrate, or
elaborate upon the data and assertions in a report.

Anthony Flaccavento
General Manager, Americas
Ogury
Interviewed December 18, 2023

Ken Gilberg
Lead Director, Marketplace Innovation
The Trade Desk
Interviewed December 22, 2023

Nich Weinheimer
Executive Vice President, Strategy
Skai
Interviewed December 18, 2023

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