GLOBAL DIGITAL AD TRENDS

Transcription

1 2019 GLOBAL DIGITAL AD TRENDS

2 Innovation is a constant force driving the evolution of the digital media ecosystem. Digital channels are expected to provide nearly all incremental spend flowing into global ad budgets through 2020, and programmatic will account for most of that growth. Publishers and media buyers must understand the nuances and key trends impacting the market in order to capitalize on the vast opportunities available. In such a fast-evolving industry, reliable data is the foundation of good business decisions. We have put together a compilation of key metrics, charts and insights to inform your 2019 strategies. This guide includes global advertising forecasts, growth trends for emerging and evolving formats, trends in header bidding, fraud protection, and more! TABLE OF CONTENT US DIGITAL & PROGRAMMATIC MARKET 2 GLOBAL DIGITAL & PROGRAMMATIC MARKET 9 MOBILE ADVERTISING 17 VIDEO ADVERTISING 24 PRIVATE MARKETPLACES 32 HEADER BIDDING 37 INVENTORY & AD QUALITY PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 1

3 US DIGITAL & PROGRAMMATIC MARKET

4 PROJECTED AD REVENUE GROWTH IN NORTH AMERICA, BY MEDIA TYPE 0.2% 9.9% 15% 11.3% 1.9% 2.5% Digital media will account for nearly all advertising growth momentum in % -3.8% -4.2% Following a positive growth year, boosted by the World Cup and the midterm elections, Local TV is expected to experience double digit declines in Out of home is the only traditional media type forecasted to grow next year. NATIONAL TV (INC. CE) -14.7% LOCAL TV (INC. CE) DIGITAL -16.9% PRINT -17.8% RADIO OUT OF HOME Source: Magna Global 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 3

5 PROJECTED US DIGITAL AD SPEND Billions $200 $150 $ $ $ $ Digital ad spend growth remains strong in the US, where over half of total media ad spend will be devoted to digital in That share is projected to rise to nearly two-thirds by $100 $50 $0 $ % 62.4% 64.9% 55.0% 49.7% Digital ad spend % of total media ad spend Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 4

6 PROJECTED US DIGITAL DISPLAY AD SPEND Billions $100 $75 $67.87 $79.85 $88.46 $97.18 $50 $ % 51.3% 50.9% 51.3% 51.7% The share of digital spend allocated to display advertising is expected to remain flat over the next four years. However, as digital advertising as a whole rises, display ad spend is projected to nearly double in the US between $25 $ Digital display ad spend % of total digital ad spend Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 5

7 PROJECTED SHARE OF US DIGITAL DISPLAY AD SPEND, BY PURCHASE METHOD NON-PROGRAMMATIC % % Already the norm for digital display ad spend in the US, programmatic transactions will gain further market share as automation innovation continues to expand into new environments including in-app and video % PROGRAMMATIC % Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 6

8 PROJECTED SHARE OF US PROGRAMMATIC DIGITAL DISPLAY AD SPEND, BY DEVICE DESKTOP % MOBILE % Mobile growth will outpace that of desktop to represent two-thirds of programmatic transactions in the US come Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 7

9 LEADING PRIORITIES OF US COMPANIES MEDIA SPENDING OVER THE NEXT YEAR % of Respondents, November 2018 Efficiency, measurement and attribution represent the leading priorities for US media buyers in Publishers and technology vendors alike can provide valuable tools and insights to support the continuation of advertising budget flows toward digital channels. Increase efficiency Demonstrating that marketing strategy aligns with business objectives Effective allocations of resources Improving ad viewability levels 31.1% 34.7% 42.0% Establishing effective benchmarks in measuring campaign success 16.6% 40.8% Gaining full transparency of campaign performance Other 0.2% 23.6% Ensuring that all ad campaign run in brand-safe environments Linking digital media with offline 16.1% 53.3% No top priorities 1.6% Source: Xaxis 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 8

10 GLOBAL DIGITAL & PROGRAMMATIC MARKET

11 PROJECTED AD SPEND GROWTH WORLDWIDE, BY MEDIA TYPE/FORMAT, Digital display formats, including video, will contribute over half of incremental ad spend dollars projected for the period. Display will represent over half of digital ad spend by Digital as a whole will provide nearly all the projected growth for the global advertising market through Internet Display Internet Paid Search Television Internet Classified Outdoor Cinema Radio Magazines Newspaper -$8.00 $6.80 $3.90 $3.00 $2.10 $1.20 -$5.30 $22.40 Billions $44.30 Source: Zenith 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 10

12 PROJECTED WORLDWIDE DIGITAL AD SPEND Billions $500 $400 $ $ $ $ $300 $ % 52.2% 54.5% 56.4% $ % Global digital ad spend growth rates remain strong. By 2020, digital advertising will represent that majority of total media ad spend worldwide. $100 $ Digital media ad spend % of total media ad spend Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 11

13 TOP 5 DIGITAL AD SPEND MARKETS WORLDWIDE $ billions and % YOY change China and the US are the only markets with over $10 billion in digital ad spend projected to grow at double-digit rates in 2019, expanding their lead as the largest digital ad markets in the world. Billions $120 $100 $80 $60 $40 $20 $0 $99.82 US +11% YOY CHANGE $ $ % YOY CHANGE $60.81 CHINA $15.47 UK +8% YOY CHANGE +5% $16.72 $ % YOY CHANGE YOY CHANGE $13.71 $8.35 $8.82 JAPAN GERMANY Source: PricewaterhouseCoopers; PubMatic calculations PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 12

14 MAJOR DIGITAL AD SPEND MARKETS WORLDWIDE $ billions and % YOY change Indonesia is the fastest-growing digital advertising market in the world, followed by India. Both are home to large populations of increasingly digital and mobile users. Billions $8 $7 $6 +8% +7% $5 $4 $3 $2 $1 $0 AUSTRALIA SOUTH KOREA +8% CANADA +8% FRANCE +19% RUSSIA +9% ITALY +13% BRAZIL +10% NETHERLANDS +11% SWEDEN +8% SPAIN +26% INDONESIA +9% SWITZERLAND +15% MEXICO +7% DENMARK +20% INDIA +9% NORWAY +13% ARGENTINA +5% AUSTRIA +7% NEW ZEALAND +11% HONG KONG +11% IRELAND +15% THAILAND Source: PricewaterhouseCoopers, emarketer; PubMatic calculations PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 13

15 PROJECTED PROGRAMMATIC AD SPEND WORLDWIDE Billions $100 $84.85 $80 $71.46 $57.52 $ % 52.9% 64.2% 45.1% 58.8% $44.61 $40 $31.28 Programmatic transactions will represent more than two-thirds of digital display ad spend around the globe in $20 $ Programmatic ad spend % of digital display ad spend Source: Zenith 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 14

16 TOP 5 PROGRAMMATIC* DIGITAL AD SPEND MARKETS WORLDWIDE $ billions and % YOY change Double-digit YOY growth rates remain the norm among the largest programmatic advertising markets in the world. China, Japan and Australia stand out, however, underlining revenue growth opportunities for APAC publishers prepared to offer inventory through automation technology next year. Billions $20 $16 $ % YOY CHANGE $18.02 $12 $8 $4 $0 US $ % YOY CHANGE CHINA $5.72 $2.22 JAPAN +21% YOY CHANGE $2.68 $ % YOY CHANGE +17% UK $2.54 $1.14 YOY CHANGE $1.33 AUSTRALIA Source: Magna Global; PubMatic calculations *excludes search and social media PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 15

17 MAJOR PROGRAMMATIC* DIGITAL AD SPEND MARKETS WORLDWIDE $ millions and % YOY change Indonesia, India and Brazil will be the fastest-growing programmatic digital ad markets in annual terms in Brazil will become only the seventh programmatic market to reach a billion-dollar valuation next year. Millions $1,400 $1, % +45% $1,000 $800 $600 $400 $ % +19% +9% +9% +89% +36% +23% +12% +47% +20% +40% +14% +33% +14% +10% +11% $0 GERMANY BRAZIL FRANCE Source: Magna Global; PubMatic calculations *excludes search and social media ITALY CANADA NETHERLANDS INDONESIA ARGENTINA SPAIN SWEDEN INDIA MEXICO HONG KONG SAR RUSSIA KOREA DENMARK CZECH REPUBLIC NORWAY 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 16

18 MOBILE ADVERTISING

19 PROJECTED MOBILE AD SPEND WORLDWIDE Billions $400 $300 $200 $ % $ % $ % $ % $ % Mobile advertising will surpass $200 billion worldwide in Growth rates will remain in double-digit territory through 2022, at which point mobile is projected to represent more than threequarters of global digital ad spend. $100 $ Mobile ad spend % of digital ad spend Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 18

20 TOP 5 MOBILE AD SPEND MARKETS WORLDWIDE $ billions and % YOY change US mobile ad spend will expand most in absolute terms, raising the value of the US market by more than $11 billion in 2019 compared to a year prior. China is expected to experience the largest growth as a percentage of spend among the five largest mobile advertising markets. Billions $80 +18% YOY CHANGE $72.51 $60 $40 $20 $0 $61.30 US $ % YOY CHANGE CHINA $37.27 $7.78 UK +16% YOY CHANGE +10% $9.03 $6.36 JAPAN YOY CHANGE $7.00 $ % YOY CHANGE $3.72 AUSTRALIA Source: PricewaterhouseCoopers; PubMatic calculations PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 19

21 MAJOR MOBILE AD SPEND MARKETS WORLDWIDE $ millions and % YOY change Indonesia and Russia are expected to experience the fastest mobile advertising growth in 2019, with each market rising 34% year over year. Additionally, Russia, Germany, Mexico, and Canada are projected to surpass $1 billion in mobile ad spend for the first time in Millions $3,500 $3, % +8% $2,500 $2,000 $1,500 $1,000 $ % +34% +24% +34% +19% +17% +18% +32% +23% +27% +18% +14% +24% +14% $0 FRANCE SOUTH KOREA ITALY INDONESIA Source: PricewaterhouseCoopers; PubMatic calculations BRAZIL RUSSIA GERMANY MEXICO CANADA SWEDEN NETHERLANDS INDIA ARGENTINA DENMARK NORWAY SPAIN 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 20

22 MOBILE INTERNET USERS WORLDWIDE Billions % % 87.6% % 89.5% 2 Mobile internet uptake has reached critical mass among consumers, with over 85 percent of internet users accessing the web via handheld devices. This provides advertisers and publishers alike with a strong incentive to increase investment in mobile strategies Mobile internet users % of internet users Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 21

23 [ MOBILE WEB VS. IN-APP Mobile internet uptake among consumers is increasingly driven by apps, where users spend considerably more time per day. For advertisers and publishers, apps are a fundamentally different environment that brings new challenges and opportunities to the fore. [ WWW MOBILE WEB APP IN-APP Cookies Web activity (e.g, shopping habits, favorite websites) Vulnerability to in-browser ad blockers TRACKING METHOD AVAILABLE USER DATA AD BLOCKING Device ID GPS location, device type, OS, gender, age, wireless carrier Ad blocking technology has not advanced to universally block in-app ads 33 minutes AVERAGE DAILY USAGE 3 hours 8 minutes Source: Smaato 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 22

24 PROJECTED SHARE OF US MOBILE AD SPEND, BY PLATFORM In-app environments are driving mobile ad spend growth to approach $80 billion in the US in More than eight-in-ten mobile ad dollars in the US will be allocated to in-app advertising next year. Similar estimates are not yet available worldwide, but growing app adoption among global consumers is likely to spur in-app ad spend around the globe next year. In Q alone, nearly 30 billion apps were downloaded worldwide.* % MOBILE WEB % % IN-APP % Source: emarketer; *App Annie 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 23

25 VIDEO ADVERTISING

26 PROJECTED DIGITAL VIDEO AD SPEND WORLDWIDE Video is expected to remain a key driver of advertising expenditures on display, projected to represent nearly two-thirds of non-social display ad spend next year. Billions $50 $40 $30 $20 $10 $0 $43.23 $37.46 $31.97 $ % 59.0% 62.9% 53.1% VIdeo display ad spend % of total non-social display Source: Zenith; PubMatic calculations 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 25

27 PROJECTED DIGITAL VIDEO AD SPEND WORLDWIDE, BY PLATFORM Global video ad spend is quickly shifting toward mobile with the share of handheld devices rising from half to more than 70% in four years. Billions $100 $80 $60 $40 $20 $0 $ % 46.5% 2018 $ % 40.0% 2019 $ % 34.9% 2020 $ % 31.5% 2021 $ % 28.8% 2022 Desktop (% of total) Mobile (% of total) Source: Cowen and Company; PubMatic calculations 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 26

28 DIGITAL VIDEO METRICS WORLDWIDE Although mobile video ad spend has gained a strong footing, representing the majority of digital video spend, the portion of video ad budgets allocated to handheld devices still trails mobile s penetration of digital video viewership globally. DESKTOP MOBILE Video ad spend ($ billions) $17.4 $19.3 $20.0 $28.9 % YOY change 16% 11% 54% 44% % share of digital video ad spend, by device 47% 40% 53% 60% Viewership (billions) % YOY change -4% -4% 12% 9% % penetration of digital video viewers 21% 19% 78% 81% Source: emarketer, Cowen and Company; PubMatic calculations 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 27

29 MOBILE VIDEO AD SPEND INTENT IN THE NEXT 12 MONTHS AMONG US AD BUYERS % of Respondents, May 2018 Nearly 60% of digital ad budgets were allocated to video, totaling more than $10 billion in Although desktop video ad budget allocation remains strong, positive advertiser sentiment toward mobile platforms should fuel further growth for the coveted format via handheld devices. INCREASE AD SPEND MAINTAIN AD SPEND DECREASE AD SPEND 51% 46% 3% Source: Interactive Advertising Bureau 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 28

30 PROJECTED DIGITAL VIDEO AD SPEND SHARE WORLDWIDE, BY PURCHASE METHOD NON-PROGRAMMATIC % % Just over half of digital video ad spend outside the walled gardens of social media was transacted programmatically in The programmatic* share worldwide should rise above 60% in % PROGRAMMATIC % Source: PubMatic calculations based on Zenith and Magna Global estimates; *excludes search and social media 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 29

31 TOP 5 PROGRAMMATIC* VIDEO AD SPEND MARKETS WORLDWIDE $ billions and % YOY change Automation technology is only beginning to gain traction for video monetization and robust double-digit growth rates remain commonplace even in the US. Brazil will be the fastest-growing market in this group, rising 54% to approach $1 billion in Billions $11 $10 $9 +30% YOY CHANGE $10.05 $8 $7 $7.76 $6 $5 $4 $3 $2 $1 $0 US $ % YOY CHANGE CHINA $3.36 $1.32 JAPAN +34% YOY CHANGE $1.77 $ % YOY CHANGE +54% UK $1.76 $0.65 BRAZIL YOY CHANGE $1.00 Source: Magna Global; PubMatic calculations; *excludes social media PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 30

32 MAJOR PROGRAMMATIC* VIDEO AD SPEND MARKETS WORLDWIDE $ millions and % YOY change Indonesia will see programmatic video ad spend double in 2019, making it the fastest-growing market for the format in the world. India and Hong Kong are projected to expand more than 50% YOY during the same period. Millions $900 $800 $ % $600 $500 $400 $300 $ % +39% +31% +24% +105% +30% +47% +39% +52% +21% +20% +54% $100 $0 AUSTRALIA FRANCE GERMANY ITALY Source: PricewaterhouseCoopers, emarketer, PubMatic calculations CANADA INDONESIA MEXICO ARGENTINA SPAIN HONG KONG SAR NETHERLANDS SWEDEN INDIA 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 31

33 PRIVATE MARKETPLACES

34 PROJECTED US PRIVATE MARKETPLACE DIGITAL DISPLAY AD SPEND Billions $15 $12 $8.99 $11.04 $12.85 $9 $6.81 $6 18.5% 19.3% 19.4% 19.6% US private marketplaces (PMPs) will continue to grow at double digit rates through 2020 as buyers and sellers of digital impressions seek more control over their transactions. $3 $ PMP ad spend % of total programmatic display ad spend Source: emarketer 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 33

35 PROJECTED SHARE OF US PROGRAMMATIC* DIGITAL DISPLAY AD SPEND, BY TRANSACTION METHOD OPEN EXCHANGE % % More than half of all US programmatic digital display ad spend will be transacted by private marketplaces by % PRIVATE MARKETPLACE % Source: emarketer; *excludes programmatic direct 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 34

36 PROJECTED US PRIVATE MARKETPLACE AD SPEND SHARE, BY DEVICE Billions $14 $12 $10 $8 $6 58.0% 62.0% 67.0% $4 56.0% Mobile will account for over two-thirds of all US PMP ad spend by However, it will continue to trail the share the device achieves of overall programmatic ad spend. $2 $0 44.0% % 2018 Desktop 38.0% 2019 Mobile 33.0% 2020 Source: emarketer; *excludes programmatic direct 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 35

37 [ MONETIZED MOBILE PRIVATE MARKETPLACE VOLUME, BY PLATFORM 15% APP IN-APP 36% 85% 64% +244% YOY CHANGE +41% MOBILE PMP VOLUME YOY CHANGE Globally, the expansion of mobile private marketplace volume has been fueled by has been fueled by growth within in-app environments. Q [ WWW Q % YOY CHANGE MOBILE WEB Source: PubMatic 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 36

38 HEADER BIDDING

39 HEADER BIDDING ADOPTION July % SITES IN HBIX (TOP 1,000 SITES THAT DO PROGRAMMATIC ADVERTISING) Over three-quarters of publishers that have embraced programmatic advertising have have adopted header bidding. However, the technology remains in the early stages among the majority of the Alexa Top 3, % ALEXA TOP 3,000 SITES Source: Adzerk 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 38

40 SHARE OF MONETIZED HEADER BIDDING VOLUME WORLDWIDE, BY DEVICE 19% MOBILE 81% 72% +95% YOY CHANGE 28% +18% YOY CHANGE Header bidding is considered a mature browser technology, including both desktops and the mobile web. Q Q % YOY CHANGE DESKTOP Source: PubMatic 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 39

41 MONETIZED IN-APP HEADER BIDDING VOLUME WORLDWIDE +452% QoQ CHANGE +86% QoQ CHANGE Triple-digit quarterly growth rates have been the norm in the early days of in-app header bidding adoption in Expect further gains in 2019 as current SDK drawbacks are addressed with server-toserver setups. Q % QoQ CHANGE Q Q Q Source: PubMatic 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 40

42 MAIN FACTORS PREVENTING APP PUBLISHERS IN NORTH AMERICA FROM USING IN-APP HEADER BIDDING For in-app header bidding adoption to become widespread, ad tech providers must ensure the technology is understood by publishers. Limited understanding of technology Implementation issue 23% Few programmtic deals/mostly direct deals Difficulty scaling PMP deals Latency 11% 11% Compatibility issues 10% 14% 31% Source: InMobi 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 41

43 INVENTORY AND AD QUALITY

44 QUALITY MATTERS TO DIGITAL AD BUYERS AND SELLERS WHAT IS AD QUALITY? Ad quality covers anything from advertiser category mapping to malicious creatives. LEADING CHALLENGES OF ADDRESSING AD QUALITY ISSUES It's difficult to track down bad actors in the supply chain +59% WHAT IS INVENTORY QUALITY? Inventory quality covers anything from domain spoofing to viewability to fraudulent arbitrage. MAJOR CHALLENGES OF PROGRAMMATIC BUYING Lack of transparency around media buys +78% Ad tech solutions don t scan every ad for issues +41% Brand safety +59% Demand partners don t do enough to resolve issues +34% Partners don t respond when issues arise +33% Ad tech solutions don t block bad ads +30% Technological capabilities of third-party technology Accessing quality data +54% +52% Lack of education/understanding +52% Source: AdLightening, ExchangeWire 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 43

45 PROPORTIONAL WASTED AD SPEND DUE TO COMMON FRAUD TACTICS IN % CLICK INJECTION FRAUD 42.3% APP INSTALL FARMS OR SDK SPOOFING As in-app ad spend balloons, challenges remain ahead. An estimated $25.8 billion worth of ad spend was wasted globally in 2018, including 42.3% linked to app install farms or SDK spoofing. 27.3% CLICK SPAM & AD STACKING Source: Juniper Research 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 44

46 3 MYTHS ABOUT INVENTORY QUALITY IN DIGITAL ADVERTISING QUALITY IS A 100% SOLVABLE PROBLEM FRAUD DETECTION TECH ALONE WILL PROTECT ME RISK ACROSS EVERY SSP IS THE SAME The most common, and maybe most damaging of myths, is that quality management can be solved completely. In reality, as soon as the industry comes up with one solution, bad actors find a way to circumvent the system. The goal is to use all tools available to you to be as close to 100 percent solved as possible. Third-party fraud detection is now considered table stakes for any large player, buyer or seller, in the digital ecosystem. Though fraud detection vendors play an important role in helping to identify and avoid invalid traffic (IVT), not every vendor measures quality the same way so reports may vary widely for the same inventory. Deep dive investigations will uncover other signals that support one report or another. Unlike something like open marketplace RTB protocol, there s no IAB-standardized and clear way to solve for quality. This means each SSP is left to their own devices to decide for themselves how to solve for this. Some may only partner with a third-party detection vendor, others only use their own tools, and some take a hybrid approach PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 45

47 DIGITAL AD VIEWABILITY RATES WORLDWIDE, BY PLATFORM, FORMAT AND PURCHASE METHOD Consumers are watching more video content and moving their viewing habits to multiple screens and devices. The engaging format remains the most viewable across devices. On the other hand, mobile display viewability remains essentially a toss-up as just over 50% of banners actually in view across apps and the mobile web in H DESKTOP DISPLAY DESKTOP VIDEO MOBILE WEB DISPLAY MOBILE WEB VIDEO MOBILE APP DISPLAY Publisher direct 63.7% 61.2% 72.4% 64.3% 54.5% 51.8% 71.5% 65.2% 53.2% 53.7% Programmatic Source: Integral Ad Science 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 46

48 DESKTOP DISPLAY VIEWABILITY RATE IN SELECT COUNTRIES Among major digital advertising markets in Europe and the Americas, viewability* rates have improved most in the United Kingdom and France. Germany remains the leading market in the category, with more than two-thirds of desktop display ads in view in H % 67.0% 48.0% 63.4% 51.8% 62.1% 53.6% 59.9% 50.1% 55.0% 47.4% 40.8% GERMANY UK FRANCE US SPAIN ITALY Source: Integral Ad Science; *per MRC standard H H PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 47

49 DESKTOP DISPLAY AD FRAUD RATE IN SELECT COUNTRIES Roughly half of all programmatic ad spend worldwide is still devoted to the US market. At such scale, it is hardly surprising that fraudsters target this market more aggressively than any other. US-led initiatives such as TAG certification and ads.txt appeared to have a positive impact however, with ad fraud rates in the US market dropping 10% YOY in H % 1.8% 0.7% 0.7% 0.8% 0.5% 0.5% 0.2% 0.4% 0.1% 0.5% 0.4% GERMANY UK FRANCE US SPAIN ITALY H H Source: Integral Ad Science 2018 PUBMATIC, INC. ALL RIGHTS RESERVED 2019 GLOBAL DIGITAL AD TRENDS / 48

50 About PubMatic PubMatic is a publisher-focused sell-side platform for an open digital media future. Featuring leading omni-channel revenue automation technology for publishers and enterprise-grade programmatic tools for media buyers, PubMatic s publisher-first approach enables advertisers to access premium inventory at scale. Processing over 12 trillion advertiser bids per month, PubMatic has created a global infrastructure to drive publisher monetization and control over their ad inventory. Since 2006, PubMatic s focus on data and technology innovation has fueled the rise of the programmatic industry as a whole. Headquartered in Redwood City, California, PubMatic operates 13 offices and six data centers worldwide. PubMatic is a registered trademark of PubMatic, Inc. Other trademarks are the property of their respective owners. PUBMATIC CONTACT Press Contact: BLAST PR pubmatic@blastpr.com Sales Contacts: JEFFREY HIRSCH Chief Marketing Officer and Head of US Publisher Development jeffrey.hirsch@pubmatic.com CRAIG CHINN VP, Chief Customer Success Officer craig.chinn@pubmatic.com KYLE DOZEMAN VP, Advertiser Solutions, US kyle.dozeman@pubmatic.com BILL SWANSON Chief Revenue Officer, EMEA bill.swanson@pubmatic.com JASON BARNES Chief Revenue Officer, APAC jason.barnes@pubmatic.com 2018 PUBMATIC, INC. ALL RIGHTS RESERVED