Digiday+ Research: Agency clients favor programmatic over direct-sold ads, as confidence — and spending — fall in online display

Agency clients still see programmatic as an important part of their marketing budgets. But, overall, the uncertainty around programmatic could be causing them to lose confidence in online display ads as a marketing channel, and, as a result, agency clients are investing less in online display. This is according to Digiday+ Research surveys conducted among over 350 agency professionals throughout 2022 and 2023.

Digiday’s surveys found that, when it comes to investing in online display ads, agencies’ clients 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. And nearly two-thirds of agency pros (61%) said their clients spend a moderate, large or very large portion of their budgets on programmatic display ads, compared with just over one-third (35%) who said their clients spend a moderate, large or very large portion of their marketing budgets on direct-sold display ads.

But Digiday’s research also found that the percentage of agency pros whose clients spend a lot on programmatic display ads has been trending downward over the last year. In Q3 2022, nearly half of agency pros (43%) said their clients who invest in online display ads spend a large or very large portion of their budgets on programmatic ads. That percentage fell to just over a third (35%) in Q1 of this year, and then fell again to 30% in Q3 of this year.

In fact, agency clients who spent a large or very large portion of their budgets on programmatic display ads accounted for the largest percentage among respondents in both Q3 2022 and Q1 2023. But in Q3 2023, that category was actually the smallest among agencies whose clients spend on programmatic ads.

Meanwhile, agencies’ clients’ spending on direct-sold display ads has remained fairly consistent, with a bit of a boost in 2023 among agency clients who spend a little on direct-sold ads. Ninety-two percent of agency pros said their clients spend at least a very small portion of their marketing budgets on direct-sold display ads. And more than half said throughout 2023 that their clients spend a very small or small portion of their budgets on direct-sold ads (57% said so in Q3 2023 and 59% said so in Q1 2023). Fewer than half said the same throughout 2022 (45% in Q3 2022 and 44% in Q1 2022).

Programmatic display ads’ slight fall from favor could be related to the fact that agencies’ confidence in online display ads as a marketing channel has seen a dip since the beginning of the year. In Q1 2023, 89% of agency pros told Digiday that they were at least slightly confident that online display drove marketing success for their clients (which was on par with Digiday’s survey results throughout 2022). In Q3 of this year, that percentage fell to 80%.

At the same time, the percentage of agency pros who said they’re confident and very confident in online display ads as a marketing channel has been trending downward over the last year. Throughout 2022, one-third of agency pros (33%) said they were confident (as opposed to very confident or somewhat confident) that online display ads drove marketing success for their clients. In Q1 of this year, that percentage fell just under one-quarter (24%), before falling again to 19% in Q3 of this year.

The downward trend among agency pros who told Digiday they’re very confident in online display as a marketing channel for their clients is much more subtle, but it’s still worth noting. Ten percent of agency pros said in Q3 2022 that they were very confident that online display ads drove marketing success for their clients. That percentage decreased to 7% in Q1 of this year, and decreased again to 5% in Q3 of this year.

As a result of agencies’ declining confidence in online display ads, Digiday’s surveys also found a drop in spending among agency clients in this channel since the beginning of the year. Eighty-seven percent of agency pros told Digiday in Q1 2023 that their clients put at least a very small portion of their marketing budgets toward online display ads. In Q3 of this year, just more than three-quarters (76%) said the same.

In other words, more agency clients aren’t putting any of their marketing budgets toward online display ads. In Q1 of this year, 13% of agency pros said their clients don’t spend at all on marketing through online display ads. By Q3, that percentage was just shy of one-quarter (24%).

What’s more, Digiday’s surveys found that fewer agency clients are spending a lot on online display ads as a marketing channel — the percentage of agency clients spending a lot in this channel is actually trending downward. In Q3 2022, nearly a third of agency pros (31%) said their clients spent a large or very large portion of their marketing budgets on online display ads. By Q1 2023, that percentage was down to just over a quarter (27%) before falling again to 18% in Q3.

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