The value of the open internet is growing in the eyes of advertisers

Artificial intelligence, cookie deprecation, retail media networks, the death and rebirth of TV. Rarely have marketers faced so many changes in such a seemingly short amount of time.

But hidden beneath these shifts are also opportunities. The opportunity to grow audiences through exciting new formats and content. The opportunity to do so while respecting consumer privacy. And perhaps most of all, the opportunity to build an internet that is open and valuable to all.

Amid all this upheaval, a new report shines a sharper light on these changes and opportunities. The Sellers and Publishers Report is a comprehensive biannual look at the drivers of growth on the open internet in recent years, using aggregate digital advertising activity across top publisher destinations on The Trade Desk’s platform.

The report highlights that marketers are placing more value on fast-emerging, premium channels and authenticated opportunities on the open internet, as consumers increasingly choose to spend their time outside of walled gardens’ online properties.

To that end, the report features a top 100 chart – “the best of the open internet” – which ranks the most popular and engaging digital publishers across all digital channels, including on the web, connected TV, and digital audio. The ranking assessment is based on a range of criteria – like advertising quality, reach, decisioned programmatic inventory, supply path efficiency and other factors.

Four major trends emerge from the report, creating a snapshot of how the internet is evolving as consumers’ expectations, and marketers’ needs, change.

In recent years, much of the digital ad market has been transacted within the walled gardens of companies such as Meta and Alphabet, but the tide is turning. In 2022, spend on channels outside of Alphabet- and Meta-owned properties surpassed 50% of total ad spend in the U.S. for the first time since 2014, a trend that has only accelerated since then.

This mimics the digital migration patterns of consumers in the U.S., who spend 59% of their online time on the open internet, and only 41% on walled gardens like Facebook and Google, according to a recent survey conducted by The Trade Desk Intelligence.

The fast growth of mass-market channels such as connected TV (CTV), which now captures the majority of time spent watching digital video, and channels that fill specific niches, such as podcasts, also stands in contrast to the decline seen on linear media.

“Brands and agencies are eager and willing to test new arenas, and the open internet landscape encourages that,” says Jennifer Kohl, chief media officer at VMLY&R.

Not every corner of the open internet is made equally, however. The report underscores the growing importance of premium destinations in the eyes of advertisers, from the CTV ads funding streaming channels like Peacock and Hulu, to the display and native ads powering the reporting of Business Insider and The Wall Street Journal.

For example, the report shows that during the second half of 2023, advertisers were willing to pay 78% more for CTV ad impressions within the top 500 destinations on the open internet than for those outside the top 500, and 11% more for the top display ad impressions.

Indeed, since January 2019, the report shows that advertiser demand for the top destinations on the open internet has grown faster (49% average annual growth rate) than the rest of the overall open internet (25%).

Among premium destinations, CTV and audio appear to be the fastest-growing programmatic channels, each growing to double-digit percentages of overall digital advertising spend in the U.S. since 2019, while mobile and premium video have also notably grown.

While a group of the top destinations does not represent every corner of the open internet, it does incorporate many of the world’s largest and most premium publishers across key channels. It is also an indicator of how advertisers’ channel mixes are evolving in line with consumers’ preferences for premium content.

“Brands are willing and eager to test and learn, and this translates over to platforms,” says Anthony Scarola, VP and programmatic lead at VaynerMedia. “If there are omnichannel or independently owned and operated UIs that are based on performance, brand safety and scale — there is an open-mind mentality.”

To find their audience across the open internet, many advertisers are investing in authenticated opportunities, especially as cookie deprecation in the Chrome browser begins this year.

Data from the report shows that in 2023, marketers were willing to pay 28% more for open and biddable digital audio ad impressions that included Unified ID 2.0 (UID2) than those without it. Similar trends play out across all digital ad channels. This comes as some advertisers report significant performance improvements from UID2 campaigns, with Unilever finding UID2 to be 12 times more effective at reaching its target audience than traditional identifiers for a campaign it ran on Disney.

As major streaming platforms start to embrace UID2, it paves the way for a post-cookie, authenticated open internet that helps advertisers find consumers where they are most engaged.

In 2022, viewers in the U.S. spent more time on streaming TV platforms than traditional cable TV for the first time, with the trend only picking up pace since then. Furthermore, research from The Trade Desk Intelligence indicates that roughly 75% of 25- to 44-year-olds surveyed — a demographic highly coveted by advertisers — increased CTV consumption last year.

Advertisers are adapting to these changing consumer habits. Emarketer anticipated that digital video ad spend during the upfronts and the newfronts would rise more than 32% in 2024 to $16.45 billion. At the same time, many major media companies ensured that programmatic was a central element to their upfront deals. A recent case in point is NBCUniversal, which opened up its Olympics inventory on Peacock, its streaming platform, to programmatic buyers for the first time.

It may not be surprising, then, that a large media agency that spoke anonymously to The Current said they found that advertisers were willing to pay high CPMs to advertise on CTV, pointing out that those CPMs were higher than most Big Tech properties.

The growth of ad-supported streaming plans, and consumers’ increasing appetite for them, looks only set to accelerate the availability of advertising opportunities on premium CTV content.

Likewise, streaming audio, led by companies like Spotify and SiriusXM, is one of the fastest-growing channels on the open internet. According to the IAB’s most recent Internet Advertising Revenue report, digital audio saw over 18.9% year-over-year growth in 2023, outpacing other digital media channels.

Meanwhile, Insider Intelligence predicts that digital audio will account for 20% of all online time. In other words, the channel is growing, which suggests opportunities for advertisers to reach engaged audiences at scale, whether they’re grooving to their favorite artists or listening to podcasts. Indeed, Spotify recently reported that its ad-supported subscriber base is growing faster (28% year over year in Q4 2023) than overall subscribers (23%).

The Trade Desk Intelligence’s Sellers and Publishers Report shines a light on the drivers of open internet advertising growth, and where digital advertising value is shifting, thanks to technology innovations and changing consumer preferences.

The report makes the case that with fast-growing channels such as CTV and digital audio, new approaches to privacy-conscious cross-channel identity, and the availability of authenticated audiences and data, the internet is being replumbed from an advertising perspective.

“The changing privacy and addressability landscape has forced everyone in the industry to look at the open internet with a fresh set of eyes,” says Ryan Lammela, group director of channel activation at Butler/Till. “That has reminded all of us that this huge swath of inventory can be used in all kinds of ways.”

The Current is owned and operated by The Trade Desk, Inc.