The State of Programmatic Advertising in North America

Businesses in the region of North America are attempting to advance their digitalization, by utilizing advanced tools and technology to open up new business opportunities and possibilities of generating income. It is expected that the North American programmatic advertising market will have a CAGR of 17.18% in the period 2022-2027. Consequently, the market for programmatic advertising in North America is expanding as more customers and companies use digital systems to exchange information, build product and service brand awareness and reach their target audiences at scale.  

Programmatic Advertising in North America

In North America, programmatic advertising spending reached approximately $179 billion in 2021, making it one of the largest programmatic ad markets globally. The region accounts for over 40% of global programmatic ad investments, with the United States and Canada leading the way. 

Programmatic ad spending in North America is expected to continue growing, driven by factors such as the high penetration of digital advertising and the increasing adoption of programmatic advertising strategies. By leveraging programmatic advertising, businesses in North America can streamline and accelerate their ad buying processes, gaining a competitive edge and driving further growth

Programmatic advertising has become an integral part of successful marketing strategies, especially for ecommerce brands in North America. With the increasing use of digital devices by clients and customers, companies across various sectors are actively leveraging digital advancements to tap into the benefits offered by programmatic advertising.

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Overview of the Programmatic Advertising Industry in North America

North America is a leading region in the programmatic advertising industry, with several countries playing a significant role. The three biggest countries in North America with the highest potential for programmatic advertising are the United States, Canada, and Mexico.

The United States 

The United States stands as the largest programmatic advertising market not only in North America but also the largest advertising market in the world with total ad expenditure of $202.93 billion in 2022. It Is fueled by its vast population of approximately 332 million people. With advanced technology infrastructure, high internet penetration and 310 million smartphone users, the U.S. offers immense opportunities for targeted and data-driven advertising campaigns. Advertisers in the United States have been quick to adopt programmatic advertising, leveraging its benefits to reach a wide range of consumers across various digital platforms.

Canada

Canada, with a population of around 38 million people, is another key player in the programmatic advertising landscape in North America. The country boasts a well-developed digital ecosystem and a tech-savvy population with 31.38 million users of smartphones makes it an attractive market for advertisers. Canadian advertisers are increasingly embracing programmatic advertising to enhance their campaign effectiveness and optimize their ad spend.

Mexico 

Mexico, with a population of approximately 130 million people, also holds great potential for programmatic advertising. The country’s growing internet penetration and increasing smartphone usage amounting to 78.37 million have paved the way for digital advertising growth. Advertisers in Mexico are recognizing the advantages of programmatic advertising in reaching their target audiences efficiently and maximizing their return on investment.

Overall, North America offers a thriving programmatic advertising industry, with the United States, Canada, and Mexico leading the way. These countries’ large populations, coupled with their technological advancements and digital maturity, make them highly attractive markets for advertisers looking to leverage programmatic advertising strategies.

The Growth of North America Programmatic Advertising Market

North America is indeed the top programmatic advertising market, with significant growth and potential. The North American programmatic advertising market is projected to grow at an average level of 15,14% from 2022 to 2027 based on industry reports. 

This growth can be attributed to several factors, including the widespread implementation of digital technology and devices across various industries, the rising demand for skilled professionals, and the continuous expansion of social networks and online streaming services. 

Moreover, the region’s strong emphasis on automation and machine learning in programmatic advertising is expected to further drive market growth. In terms of spending, digital advertising in North America witnessed a substantial increase of nine percent in 2022, reaching an estimated value of 262 billion U.S. dollars and projected 281.11billion by 2023. With such remarkable growth and a promising future, North America remains at the forefront of the programmatic advertising landscape.

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Digital Advertising Spending in North America by Format in 2022

In North America, the segment with the largest ad spending growth is search advertising, which is expected to grow by 10.31% in 2022. Video advertising is also expected to increase at a faster rate than non-video ads, driven by connected TV, mobile, and social media platforms. Overall, the digital ad spending in North America is projected to grow and evolve as new technologies and formats emerge.

Programmatic Advertising Spending in United States

Programmatic advertising spending in the United States has experienced significant growth, reaching 167.1 billion U.S. dollars in 2021. This growth can be attributed to several factors, including the increasing popularity of connected TV and the dominance of mobile display ad spending. It was projected that programmatic display advertising alone will reach 123.22 billion U.S. dollars in spending in 2022 and $223.58 billion by 2023. 

Despite challenges related to identity and concerns about transparency, programmatic advertising continues to thrive and is expected to be an essential component of marketing strategies in the United States. With its ability to target specific audiences and drive conversions, programmatic advertising offers brands new opportunities to effectively connect with their target audience and achieve their marketing goals.

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Programmatic Advertising Spending in Canada

Programmatic advertising spending in Canada has experienced significant growth over the years. In 2021, the spending reached 11.05 billion U.S. dollars and is projected to increase to 16.74 billion U.S. dollars by 2026. This growth reflects the importance and effectiveness of programmatic advertising in the Canadian market. 

 The increase in programmatic advertising spending in Canada is driven by factors such as the rise of ecommerce, advancements in technology, and the growing popularity of mobile social media advertising. As a result, programmatic advertising is becoming an integral part of marketing strategies in Canada, offering brands new opportunities to reach their target audience and drive conversions. 

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Programmatic Advertising Spending in Mexico

Programmatic advertising spending in Mexico has been experiencing steady growth over the years. In 2017, it was recorded at $1.16 billion, and it gradually increased with a year-on-year growth rate of 30.17% in 2018, reaching $1.51 billion. The following year, it further grew by 23.18% to $1.86 billion. However, due to the impact of COVID-19, the market faced a setback, and spending remained stagnant between 2019 and 2020.

Fortunately, the market rebounded significantly in 2021, with programmatic advertising spending reaching $2.62 billion, surpassing the previous period. This upward trend continued in 2022, with an estimated spending of $3.16 billion. Looking ahead, the market is projected to grow by an impressive 15.19% in 2023, amounting to $3.64 billion. These figures highlight the increasing importance and effectiveness of programmatic advertising in the Mexican market. 

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Difference in Advertising Spending between United States, Canada, Mexico

The difference in advertising spending between US, Canada and Mexico is attributed to factors such as market maturity, economic conditions, industry regulations, and cultural preferences. The United States has a more mature and developed advertising market compared to Canada and Mexico, which may result in higher programmatic advertising spending. Additionally, differences in economic conditions and industry regulations can influence advertising budgets and investment decisions. Cultural preferences and consumer behavior also play a role in shaping advertising strategies and spending patterns in each country.

What Are The Top Factors Impacting Programmatic Advertising Growth in North America?

Programmatic advertising has witnessed significant growth in North America, driven by several key factors such as: 

Increased digital ad spending: The programmatic advertising market in North America is experiencing growth due to the increased spending on digital advertising. Advertisers are shifting their budgets towards programmatic advertising as it offers more targeted and efficient ad placements. 

Advancements in technology: Technological advancements, such as real-time bidding and demand-side platforms (DSPs), are driving the growth of programmatic advertising in North America. These technologies enable advertisers to automate the buying and selling of ad inventory, leading to more efficient and effective ad campaigns. 

Data-driven personalization: The use of data-driven personalization is a significant factor impacting programmatic advertising growth in North America. Advertisers can leverage consumer data to deliver personalized and relevant ads to their target audience, resulting in higher engagement and conversion rates. 

Shift towards omnichannel advertising: The adoption of an omnichannel approach is influencing programmatic advertising growth in North America. Advertisers are looking for integrated solutions that allow them to reach their audience across multiple channels, including mobile, desktop, and connected TV. 

Privacy concerns and regulation: Privacy concerns and regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), are impacting programmatic advertising growth in North America. Advertisers need to ensure compliance with these regulations while collecting and using consumer data for targeted advertising and as well when partnering with third party data providers.  

These factors collectively contribute to the growth and evolution of programmatic advertising in North America, making it a dynamic and promising industry for advertisers and stakeholders.

The Key Trends of Programmatic Advertising in North America

AI in programmatic and data analysis: The adoption of artificial intelligence (AI) and machine learning (ML) is one of the most significant trends. AI and ML are being used to optimize ad campaigns and improve targeting. These technologies not only help advertisers to reach the right audience at the right time, reducing the cost and increasing efficiency, but also make it possible to understand user behavior across different platforms and provide valuable insights. 

Privacy approach: Data privacy and transparency have also emerged as important trends in the programmatic advertising industry. There is a growing demand for more transparency in data usage, and advertisers are expected to be more accountable in how they collect, store, and use data. This trend is being driven by consumer concerns about data privacy and security. 

Connected TV: The rise of connected TV programmatic ad spending presents new opportunities for advertisers. Connected TV is becoming an increasingly popular way for consumers to access content, and programmatic advertising is a natural fit for this platform. Advertisers can use programmatic advertising to reach audiences on connected TV devices, and they can also use data to target specific audiences with relevant ads.

Cookieless era: The industry is also adapting to cookieless advertising due to changing privacy regulations. Cookies have long been a key tool for tracking user behavior and delivering targeted ads. However, with the rise of privacy concerns, cookies are becoming less effective and are being phased out in some cases. Advertisers are now using other technologies, such as IP address, device ID, or contextual targeting, to deliver relevant ads without relying on cookies.

Advanced Technology: The emergence of 5G technology is also shaping the programmatic advertising industry. 5G is expected to provide faster internet speeds, which will enable advertisers to deliver more engaging and interactive ads. This technology is also expected to improve the accuracy of ad targeting, as it will provide more data on user behavior.

DOOH: Finally, the use of new ad formats like 3D, AR, and VR is also shaping the programmatic advertising industry. These formats provide advertisers with new ways to engage with consumers and deliver more immersive experiences. Additionally, there is an increasing use of advertising in digital out-of-home platforms, such as digital billboards and screens in public places like airports and shopping malls.

Overall, the programmatic advertising industry is experiencing significant growth and is being shaped by advancements in technology, the demand for transparency, and the integration of new advertising formats and platforms. Advertisers who stay up-to-date with these trends will be well-positioned to succeed in this dynamic and rapidly evolving industry.

Digital Ad Spend Per Channel 2018-2027

Search Advertising 

The search advertising market has shown remarkable growth over the years, with ad spending increasing steadily from $134.70 billion in 2018 to $377.80 billion in 2027. This growth trend highlights the effectiveness of search advertising as a marketing channel for businesses to reach their target audience. With a compound annual growth rate (CAGR) of approximately 13.08%, the market is projected to continue expanding. Search advertising is widely adopted by businesses as it allows them to showcase their products or services to potential customers. The United States is expected to play a significant role in this growth, with ad spending in the search advertising market projected to reach $118.20 billion in 2023.

Video Advertising

The investment in video advertising has experienced consistent growth over the years. Between 2021 and 2022, there was a significant increase in investment, rising from $117.70 billion to $158.10 billion, with a growth of $40.4 billion. This trend is expected to continue, with projections indicating that investment in video advertising will reach $229.40 billion by 2027. This highlights the increasing importance of video advertising in the digital advertising market, as businesses recognize its effectiveness in reaching and engaging with their target audience. As a result, companies are expected to allocate a substantial portion of their advertising budgets to video advertising in the coming years.

Banner Advertising

The expenditure on banner advertising has consistently increased since 2018, with the projected growth continuing until 2027. In 2018, the ad spending for banner advertising amounted to $32.49 billion, and by 2022, it had reached $68.67 billion. The sector experienced its most significant growth between 2020 and 2021, with ad spending increasing from $49.32 billion to $58.22 billion. The projection suggests that by 2027, the expenditure on banner advertising will reach $83.87 billion, indicating a positive growth trend. 

Audio Advertising

Audio advertising has grown significantly in recent years, with expenditure expected to reach $7.88 billion by 2027. This growth is driven by the popularity of audio streaming platforms and podcasts, as well as advancements in technology for personalized advertising. The highest growth period was between 2020 and 2021, with expenditure increasing from $3.34 billion to $4.52 billion. Audio advertising is effective due to its high recall rate and seamless integration with the listening experience. The future of audio advertising looks promising, with further growth anticipated as technology and consumer behavior evolve.

Social Media Advertising

The social media advertising market has been experiencing consistent growth over the years. From 2018 to 2027, the market is projected to grow by 4.53%, resulting in a market volume of approximately $247.30 billion in 2027 [1]. In 2018, the ad spending on social media advertising was $59.73 billion, and it has been steadily increasing since then. By 2023, ad spending on social media is expected to reach over $268 billion, accounting for 33% of all digital advertising [3]. This growth in social media advertising can be attributed to factors such as the increasing number of social media users worldwide, with over 4.74 billion users, and the effectiveness of social media platforms in reaching a wide audience [3]. With such significant growth and potential, social media advertising presents a valuable opportunity for marketers to optimize their ad campaigns and reach their target audience effectively.

Influencer advertising

Influencer advertising has seen significant growth in recent years, with the market volume projected to reach $17.78 billion by 2027. This represents a substantial increase from $4.51 billion in 2018, showcasing a steady and consistent growth trend at the average annual growth rate of 10.23% from 2023 to 2027 highlights the increasing popularity of influencer marketing as an effective channel for businesses to reach their target audience. During the period between 2021 and 2022, the growth of influencer advertising demonstrated remarkable significance, as it surged to an impressive $2.32 billion, from $9,61 to $11.07 billion. Influencer advertising leverages the influence and reach of social media personalities to promote products or services to their followers, creating a more authentic and engaging marketing approach. 

Classifieds

The investment in classifieds advertising in North America emained relatively stable during the given period, with a slight decrease. In 2018, the investment was recorded at $7.65 billion, and it is projected to reach $6.56 billion in 2027. Although there is a slight decrease, the investment in classifieds advertising still represents a significant portion of the overall digital advertising market.

Total: The total investment in all channels shows a consistent increase over the given period, with the highest growth occurring between 2021 and 2022. The total investment is projected to reach 401.50 billion USD in 2027. 

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Programmatic Share by Industry in North America

The key industries accounting for the largest share of programmatic advertising in north america are: 

• Retail 16.7%
• Pharma & Healthcare 10.3% 
• Entertainment & Media 10.2% 
• Financial Services 9.0%
• FMCG 8.4%
• Business Services 7.8%
• Travel & Leisure 7.4%
• Telecommunications 5.8%
• Automobiles 5.2%
• Technology & Electronics 4.8%
• Energy & Fuel 2.3%
• Real Estate & Construction 2.2%
• Home Appliances & Furniture 1.6% 
• Other 4.9% 

The Future of Programmatic Advertising in North America

The future of programmatic advertising in North America looks promising, with a projected growth rate of 17.18% from 2022 to 2027. 

The market is expanding as companies and customers increasingly rely on digital devices, creating a platform for programmatic advertising. Video ads are expected to overtake other digital display spend in 2022, indicating a growing preference for visual content. 

Programmatic advertising offers benefits such as real-time insights and improved targeting capabilities, driving its adoption in the market. However, there may be challenges related to a lack of understanding of programmatic advertising expenditure and a scarcity of qualified talent in the industry. 

The COVID-19 pandemic has also impacted advertising spending, with businesses cutting or ceasing their expenditures. Nevertheless, increased mobile penetration and the adoption of technologies like 5G, AI, and ML are expected to drive the future growth of programmatic advertising in North America.

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