Long before GDPR took effect in May, both publishers and advertisers tried to install safeguards to prepare for its impact on industry practices. We’ve seen some of the effects already. Email marketing distribution lists have shrunk. Companies are re-evaluating and optimizing the data they collect to increase data privacy and consumer trust. Some publishers are even blocking access to EU-based residents altogether.
But how has GDPR affected the ways advertisers buy? It’s been reported that programmatic purchases have plummeted in the EU since GDPR has gone into effect. Companies now need to prove they have user permissions, which becomes tricky if you’re selling advertising on websites where you have no ownership or control. We’re aware of certain firms whose revenues are down from 33% to 50%, in just the past 30 days, presumably due to lagging compliance.
However, we evaluated programmatic ad spend in the U.S.
The impact isn’t nearly as drastic as some may have believed.
a. Number of brands buying programmatic is up
b. Direct buys are increasing at an even greater rate
Number of brands buying programmatic is up
Surprisingly, our own data found that the number of brands purchasing programmatically in the U.S. has increased since April. This shows that brands still value the convenience of programmatic purchases, even with the new regulations. It’s important to note that this increase in programmatic interest actually came prior to GDPR. From January to May of 2018, we saw 86,695 brands purchase programmatic ads, with the number of brands increasing month over month.
Direct buys are increasing at an even greater rate
From January to May of this year, digital advertising has surged. During this period, the number of brands that purchase programmatically increased, yet direct buying also grew, and at a much faster rate. Because of this, the total percent of programmatic purchases among all digital ad buys has actually decreased. In Q1 of 2018, 61% of ads were placed programmatically. Since then, that percentage has dipped to 59% in April, and to 58% in May, despite programmatic strength.
In looking at the big picture, we found that the rate of programmatic ad buying has been largely flat in the U.S. year-to-date. Digital advertising as a whole is thriving, regardless of GDPR implementation. This proves that the increase in programmatic spend can be attributed to the overall popularity of digital, as opposed to programmatic itself. We believe this trend in the U.S. will continue.
Programmatic will remain popular among advertisers, barring a wave unexpected GDPR violations as a result.
About the Author
Todd Krizelman is the Co-Founder and CEO of MediaRadar
Abridged and re-published with kind permission of Digital Content Next, advancing the future of trusted content