In the increasingly complex landscape of digital advertising, today’s leading brands are embracing programmatic advertising to foster a more comprehensive customer-centric model—one where brand and performance budgets and strategies converge. But what does this convergence imply for media budgets, partner selections, and technology investments?
A recent State of the Industry report, sponsored by PubMatic, delves into how marketers are refining their performance marketing strategies amid unprecedented challenges related to addressability and shifts in consumer behavior. Notably, 82% of brands surveyed are moving away from viewing the marketing funnel as a traditional linear model, which has significant implications for the future of media.
Marketers Expanding Performance Campaigns Across the Open Web
As performance marketers broaden their campaigns across the open web, they are discovering enhanced flexibility, control, and quality in their media opportunities, resulting in improved ROI compared to walled gardens. Currently, performance budgets are allocated more toward the open web than walled gardens, with 37% versus 31%, respectively. Additionally, the research indicates that the distinction between performance and branding budgets is becoming less clear, suggesting that performance initiatives—especially on the open web—may be even better funded than these figures suggest.
Brands are focusing on building their performance marketing mix on the open web, prioritizing connected TV and OTT as their primary channels, along with contextual targeting as their leading strategy. This trend underscores the continued transformation of channels traditionally viewed as branding into the realm of performance marketing.
The reasons behind the growth of performance marketing on the open web are numerous: Beyond the rich creative possibilities, the open web is currently a hub of significant innovation in privacy-first, ID-agnostic targeting. Additionally, it allows brands to reduce their reliance on walled-garden platforms and the associated risks. On the open web, brands can distinguish themselves with high-quality, relevant content while simultaneously supporting premium publishers and outlets.
Brands Deepening Investments in Technology and Platforms
As brands shift focus to the open web, they are also intensifying their investments in technology and platforms to enhance their performance marketing success. PubMatic’s research indicates that brands are planning a slight decrease in labor allocation for performance marketing, reallocating budgets to bolster technology investments, which is a top-five priority for 2024 and 2025.
Nearly half (49%) of brand respondents indicated that spending on technology and platforms would account for 41% or more of their performance marketing budget in 2024. This figure is expected to rise next year, with 55% stating that technology investment will make up 41% or more of their performance budget, marking a 6-point increase.
SSPs Play a Larger Role in Performance Marketing
As brands increase their investments in performance technology and platforms, the growth is not uniform across all areas of advertising technology.
Kyle Dozeman, Chief Revenue Officer, Americas at PubMatic, notes in the research report that SSPs are taking on a more significant role in the shift toward performance marketing on the open web due to their enhanced inventory access, improved data utilization, advanced targeting and optimization capabilities, as well as greater transparency and control.
Given that investment in new and emerging platforms (e.g., commerce media) is a top goal for brands in 2025, marketers will be seeking experienced ad tech partners to facilitate these transitions. Integrated, omnichannel partners with proven records of innovation on the open web will be essential in this context.
Overall, PubMatic’s research highlights a crucial truth: today’s leading brands are concentrating on ROI, efficiency, and sales—not merely clicks and arbitrary conversions. This focus is evident in their merging of brand and performance budgets to align with consumer behaviors, as well as their growing emphasis on the flexibility and power of open web strategies. For brands that continue to adapt to these shifts, a promising future awaits—one where a flattened funnel and smarter investments in technology and the open web not only yield performance gains but also establish true market leadership.
