Digiday+ Research deep dive: Publishers’ dependency on programmatic is likely to grow, with focus on open market

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The programmatic open marketplace isn’t perfect — publishers know this. But that doesn’t mean they’re turning away from the revenue they get from programmatic ads, and open market programmatic in particular.

In fact, according to a Digiday+ Research survey of 112 publisher professionals, publishers make a significant portion of their revenue from programmatic ads, and most of that programmatic revenue comes from the open market.

Overall, Digiday’s survey found that programmatic ads continue to be a big business for publishers — and there is still room for growth in the category. Eighty-five percent of publisher pros said they get at least a very small portion of their revenue from programmatic ads as of Q1 2023, up from 78% six months prior. And 84% said they will put at least some focus on growing their programmatic business in the next six months, up from 76% in Q3 of last year.

Among the publishers who make money from programmatic ads, it’s likely they make a large amount of money from this revenue stream. More than one-third of respondents to Digiday’s survey (38%) said they make a large or very large portion of their revenue from programmatic ads. This percentage is on par with two years ago, when 37% of respondents told Digiday the same, but it is a rebound from 2022, when between 30% and 32% of publisher pros said they got a large or very large portion of revenue from programmatic. Comparatively, around a quarter of publisher pros have said over the last two years that they make a small or very small portion of their revenue from programmatic.

And publishers’ programmatic ads businesses are likely to grow, if anything. Forty-five percent of publisher pros said in Q1 of this year that growing their programmatic business will be a large or very large focus for them in the next six months. This is consistent with the 43% who said the same in Q3 2022, but it is a big jump from the 32% who said so in Q1 of last year. Meanwhile, only 18% of respondents to Digiday’s survey said in Q1 that programmatic would be a small or very small focus for them in the coming months.

Digiday’s survey found that there is a big difference between how dependent large publishers are on programmatic ad revenue, compared with their smaller counterparts. A whopping 93% of large publishers get at least a very small portion of their revenue from programmatic ads. That percentage drops to 72% among small publishers.

And among the publishers making money from programmatic ads, there are some big differences between how much money large and small publishers make from this part of their business, Digiday’s survey found. Twenty-seven percent of publisher pros who work for large publishers said they make a moderate portion of their revenue from programmatic ads, compared with 17% of publisher pros who work for small publishers, and 32% of large publishers said they get a large portion of revenue from programmatic, compared with 22% of small publishers. The differences continue even into the very large category: 17% of large publishers said a very large portion of their revenue comes from programmatic, compared with just 8% of small publishers.

The difference between how large and small publishers make money from programmatic revenue is unlikely to change this year, Digiday’s survey found. While 93% of large publishers said they will put at least a very small focus on growing their programmatic ads business in the next six months, only 75% of small publishers said they will do the same.

Nearly a third of publisher pros who work for large publishers (32%) said growing their programmatic business will be a large focus for them in the coming months, and more than a quarter (27%) said it will be a very large focus. Meanwhile, 19% of publisher pros who work for small publishers said growing their programmatic business will be a large focus, and the same percentage said it would be a very large focus. These are significant differences between these groups.

Of the small publishers who said they would focus on growing their programmatic ads revenue in the next six months, the highest percentage said they would put a moderate focus on this part of their business: 28% of respondents to Digiday’s survey who work for small publishers said this.

Among publishers who get revenue from programmatic ads, Digiday’s survey found that they’re much more likely to make a large amount from open market programmatic ads over direct-sold programmatic ads.

Twenty-seven percent of publishers who get revenue from programmatic ads said in Q1 of this year that they get a large portion of that revenue from open market programmatic ads, compared with 15% who get a large portion from direct-sold programmatic ads. Meanwhile, 26% of publishers get a very large portion of their programmatic revenue from the open market, compared with 9% who get a very large portion from direct-sold programmatic ads.

And the percentage of publishers who told Digiday that a large portion of their programmatic ad revenue comes from the open market saw a big jump in the last six months. Nineteen percent of publisher pros who get revenue from programmatic ads said they made a large portion of that revenue from open market programmatic in Q3 of last year (which remained steady with the 18% who said so in Q1 of last year). That percentage rose to 27% in Q1 of this year.

Meanwhile, the percentage of publisher pros who said they get a large portion of their programmatic revenue from direct-sold programmatic ads fell over the last six months. Fifteen percent of publisher pros told Digiday in Q1 2023 they get a large portion of their programmatic revenue from direct-sold, down from 24% in Q3 2022 and 23% in Q1 2022. At the same time, the percentage of publisher pros who said they get a moderate portion of their programmatic revenue from direct-sold rose from 21% in Q3 2022 to 33% in Q1 2022.

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