Digiday+ Research deep dive: Marketers remain invested in programmatic, but agencies show less confidence than brands

To set the scene, Digiday+ Research surveyed brand, retailer and agency professionals in the first quarter of the year to get the lay of the land when it comes to programmatic advertising. Digiday found that programmatic advertising remains a stalwart among marketers’ ad budgets, but that agencies’ confidence in the channel has been shaken in recent months.

Digiday’s survey found that marketers are overwhelmingly investing in programmatic ads. More than three-quarters of brand and retailer pros (77%) said their companies currently use programmatic site display ads, and an even larger 80% of agency retailers said the same of their clients.

In comparison, 54% of brands and retailers and 50% of agencies said they invest in email newsletter sponsorships or ads, and 51% of brands and 45% of agencies said they invest in direct-sold site display ads. These are still very significant percentages of marketers, but not to the same extent as programmatic.

Not only are most marketers investing in programmatic, but many are also increasing their investment in the channel, Digiday’s survey found. More than one-third of brand and retailer pros (38%) said their spending budget on programmatic site display ads increased this year compared to last. That percentage makes programmatic the largest category for brands’ display ad investments, putting it in a tie for first place with direct-sold site display ads.

Agencies are growing their programmatic investments even more so than their brand and retailer counterparts, Digiday’s survey found. Forty-two percent of agency pros said they increased their programmatic spending budget this year compared to last year, making agencies increasing their programmatic investments the largest group in the category. Interestingly, for agencies, those who haven’t increased their spending budgets in any display ad channels accounted for the second-largest group, with 32% of agency respondents saying this.

To back up the significant percentage of brands and retailers who said they’ve increased their spending budget for programmatic, Digiday’s survey found that the percentage of brand and retailer pros who said they spend a large or very large portion of their marketing budgets on programmatic site display ads has been trending upward over the last few quarters. Just under a quarter of brands (24%) said in Q1 2024 that their companies put a large or very large portion of their budgets toward programmatic ads, up from 17% in Q3 2023 and 11% in Q1 2023.

Notably, those spending a very large amount on programmatic ads accounted for most of the growth: 11% of brand and retailer pros said in Q1 of this year that they put a very large portion of their marketing budgets toward programmatic, up from just 4% in Q3 of last year. But it’s also worth noting that the 24% of brands who said they spend a large or very large amount on programmatic ads is more of a rebound than anything else. About a third of brand pros were spending a large or very large portion of their marketing budgets on programmatic in 2022 (34% in Q3 2022 and 32% in Q1 2022).

Also worth noting is that the brands and retailers spending a small amount on programmatic ads accounted for the largest group in Digiday’s survey. Forty-three percent of brand and retailer pros said in Q1 2024 that they spend a very small or small portion of their marketing budgets on programmatic site display ads.

It’s a different story for their agency counterparts, though. Digiday’s survey found that the percentage of agency clients spending a lot on programmatic has actually been trending downward. Fewer than a quarter of agency pros (23%) said in Q1 2024 that a large or very large portion of their clients’ marketing budgets goes toward programmatic site display ads, down from 29% in Q3 2023, 34% in Q1 2023 and 43% in Q3 2022.

At the same time, the percentage of agency pros who said their clients spend nothing at all on programmatic marketing jumped in the last six months, from just 2% in Q3 2023 to 18% in Q1 2024. Put another way, 82% of agency pros said in Q1 of this year that their clients spend at least a very small amount of their marketing budgets on programmatic site display ads, down from 98% six months earlier. It’s possible that the rise of made-for-advertising sites has contributed to this decrease in agency marketers investing in programmatic ads.

So how do we account for the fact that nearly half of agency pros said their spending budget has increased for display ads since last year? The important thing here is to note that agencies whose clients spend a moderate portion of their budgets on programmatic accounted for the largest group in Digiday’s survey: 38% of agency pros said their clients spend a moderate amount on programmatic ads.

Looking at the different ways that brand and agency marketers spend on programmatic ads makes sense when we look at what each group seeks to get out of their advertising in the channel. When it comes to measuring the success of their programmatic ads, brands and retailers look at sales to determine their success, while agencies look at clicks.

Thirty-six percent of brand and retailer pros told Digiday that commerce or sales is their main measurement of success for programmatic site display ads, making that the top measurement for brands in programmatic. Clickthroughs came in second, with 29% of brands and retailers saying it’s their main measurement of programmatic success, followed by conversions such as downloads and registrations coming in at 14%.

Meanwhile, clickthroughs came out as the top measurement of programmatic success among agency pros, 37% of whom chose this measurement as their main one for their programmatic site display ads. Commerce or sales followed at 33%, and impressions came in third, with 13% of agency pros choosing it as their main measurement of programmatic success.