Report: 53% of Marketers Predict Decline in Programmatic Spend

More than half of marketers believe programmatic spend will decrease in the coming year, in part because of surging investments in walled gardens. 

In what could be seen as a wake-up call to publishers, a new survey commissioned by the data company Lotame found that investments in walled gardens are likely to come at publishers’ expense, with just one-third of marketers now saying they expect to increase their spend on programmatic in 2023. 

Google’s waffling on third-party cookie depreciation appears to be working in its favor. More than one-third of marketers say they plan to invest more in walled gardens in the coming year, up from 18% in February 2021. 

For the time being, Lotame found that many marketers appear to be playing the field. In 2021, three-in-four marketers said they wanted to test new or further partners in the future. Now, even more marketers are exploring different identity options.

At present, Google Topics appears to be pulling into the lead as the most popular ID. As the newest offering in the space, it holds the largest share in Lotame’s survey, while other solutions that have been available on the market for longer, like contextual and authenticated, are showing nearly flat growth in the coming year. 

The use of probabilistic or predictive solutions has grown 50% year-over-year — indicating a larger jump than any other identity category in the report. Thirty-percent of marketers say it’s too difficult to scale authenticated email as an ID, and 58% say email-based IDs are still using third-party cookies.

“We anticipate regional differences in marketer and publisher attitudes and actions … While most regions chose data privacy as the No. 1 requirement, the Australian market selected ease of implementation,” explains Chris Hogg, chief revenue officer at Lotame. “Each region’s No. 2 and 3 selections revealed even greater divergence, which tells us a number of things about how ready the infrastructure and leadership is to move fast when it comes to a cookieless world.”

To Hogg’s point, when it comes to programmatic spend, U.S. marketers are predicting a far less drastic decline in programmatic than marketers globally. In Singapore, however, the results are nearly flipped. Significantly more marketers in Singapore predict an increase in programmatic spending in the coming year, compared to marketers globally.

“When we launched our first Beyond the Cookie report, the world was in a state of unprecedented change, perhaps the most overused phrase but also on point. We were really keen to know how marketers and publishers were grappling with an avalanche of change,” Hogg says. “The most remarkable change is in attitudes toward walled gardens.” 

In Beyond the Cookie 2, Lotame’s previous report, 46% of marketers said they were suspicious of Google’s motivations in delaying the sunset of third-party cookies. Fast-forward a year and a half, and now 47% believe privacy legislation changes were the primary motivator to the second delay. In what could be seen as disappointing news for publishers, 37% of marketers now say they plan to spend more with walled gardens, even though they’re not happy about it. 

On the whole, marketers say they have had a positive experience with identity solutions to date, and almost all see more positive changes from using them. Thirty-five percent cited more efficient buying of inventory as a benefit, while over a quarter (26%) say they’ve seen greater access to more premium real estate. 

“This industry is incredibly creative and resilient,” Hogg says. “I expect the walled gardens to unfortunately grow stronger, but so will government scrutiny. What we’re seeing with retail media — the rise of walled cities — will spread to other verticals as well. It’s already taken hold in CTV. There are no safe bets in my view. My advice to marketers is to diversify your investments and be willing to test, fail, and learn because there is still a great deal of uncertainty in the industry.”