Survey Summary: Despite challenges, marketers plan to increase programmatic spending in 2024

58% of brands and retailers are investing in generative AI

Programmatic marketers are struggling. Last week at the Digiday Programmatic Marketing Summit in Palm Springs, Calif., agency executives participated in a private town hall discussion and spoke candidly on condition of anonymity. And they were very candid about the challenges they faced.

They're facing inventory quality issues brought on by the recent controversy surrounding ad-facing sites Forbes and Colossus. There's also measurement chaos as third-party cookies are eventually phased out. And then, of course, there's AI. In fact, AI may be programmatic marketers' greatest potential ally in dealing with other challenges. But AI also comes with its own predicaments.

“We're renewing contracts with some of our clients, and some of them have warned us that 'anything that uses AI needs to be clearly stated.' And now… , with a warning that says, “Creatives, you can't use AI here.” People are scared because of the level. Inclusivity is not built into AI,” said one agency executive.

More than half of brands and retailers were already using generative AI by the end of last year, according to a Digiday+ Research survey. 58% of brand and retail professionals said their companies are investing in or using generative AI or natural language processing tools as of the second half of Q4 2023.

Chatbots were the most common use of generative AI technology among brands and retailers. Just under half (49%) of brand and retail professionals say their companies use chatbots or AI assistants. Copy generation is his second most popular use of AI, with 46% of brand and retail professionals saying their companies use AI for copy generation. Social media listening took the top three spots, with 40% of brands and retailers saying they use AI for this purpose.

Insights and statistics:

• “Conservative companies that are audited are very hesitant to incorporate things like cost information into AI unless they know it's a closed bubble that competitors or nefarious actors cannot access. ” — Agency executives at the Digiday Programmatic Marketing Summit.
• Despite the challenges of programmatic marketing, marketers still invest overwhelmingly in programmatic advertising. More than three-quarters (77%) of brands and retailers say their companies currently use programmatic site display advertising, and an additional 80% say they are currently using programmatic site display advertising, according to a DIGIDAY+ RESEARCH Q1 2024 survey. Store retailers responded that the same applies to their customers.
• A significant number of marketers are increasing their spending on programmatic advertising again this year, according to Digiday's first quarter survey. 38% of brand professionals said spending on programmatic site display ads increased in Q1 2024 compared to last year, and 42% of agency professionals said the same about their clients.

Read more about programmatic investing for marketers

DIGIDAY+ Research Digest

Executives from Condé Nast, Forbes, The Atlantic, The Guardian, and The Independent recently shared their thoughts. As part of Digiday's Publisher Revenue Strategies series, they discuss affiliate commerce, revenue diversification and global revenue opportunities. Here are some of their comments on key industry revenue trends.

Publisher Insights:

• “the [affiliate commerce] “It's just a fraction of the revenue. We just published a big list of the best novels of this century. … We get the revenue, but it's a fraction of the number at the moment. I hope it gets bigger… but I'm going to turn down the money. We work in media. We never turn down money.” — Nicholas Thompson, CEO of The Atlantic

• “We're a quality news brand with an audience that has a lot of disposable income and likes the finer things in life, so we thought it would be strange for us not to have a wine partner. We're great. We've developed white label relationships and created our own independent wine club. That's proven to be a real money maker for us, as our e-commerce relationships grow. Diversification into other brand partners will be very important for us.” — Andy Morley, CRO, Independent, on revenue diversification.
• “Live experiences like Vogue World are a huge opportunity to be developed in a market like Paris, attract talent from all over the world, and be distributed across a vast network of global platforms. We can create actionable media opportunities for marketers in every market where their products can be purchased.” — Craig Kosterik, Chief Business Officer, Global Commercial Revenue, Condé Nast, on Global Revenue Opportunities.

Read more about how publishers can optimize their revenue streamss

As the most-watched streaming service on TV screens for 15 consecutive months, brands can't avoid advertising on Google-owned YouTube. But ahead of the upfront event in New York City last week, YouTube has improved the way it markets to advertisers to further increase scarcity. Specifically, YouTube is raising the bar for its YouTube Select program, which packages inventory of the top channels on the platform, and introducing new options that allow advertisers to monopolize individual channels within that package. Among ad-supported streaming platforms, YouTube accounts for the largest portion of marketers' advertising and budget allocations, according to the latest edition of Digiday+ Research's CMO Strategy Series.

statistics:

• Three-quarters (75%) of brand and agency respondents in Q1 2024 said they currently advertise on YouTube, and more than half (60%) of respondents said that in 2023, YouTube will consume the largest portion of their budget.

• After YouTube, Amazon Prime Video (with ads) tied with Hulu for second place in terms of advertising volume: As of Q1 2024, 36% of brand and agency respondents said they were running ads on both Hulu and Prime Video, respectively.
• In terms of advertising budget allocation, Hulu came in second place, with a large margin behind YouTube. 13% of brand and agency respondents said they will allocate the majority of their 2023 ad-supported streaming budget to Hulu. [Prime Video (with ads) was excluded from Digiday’s 2023 budget allocation analysis because Amazon did not launch the ad-supported tier until January 2024.]

Read more about marketers' ad spend on streaming platforms