IAB Europe, the European industry association for digital marketing and advertising ecosystem launched its annual ‘Attitudes to Programmatic Advertising’ report. Now in its fifth year, the report is the most comprehensive analysis of the European programmatic landscape. The research covers strategies and adoption trends, drivers of, and barriers to growth, as well as forecasts for the future for 31 markets.
The latest research reveals programmatic revenue grew by 33 percent in 2018, topping €16.7bn. More than 70 percent of display and more than 50 percent of video is now traded via programmatic methods. Social media buying dominates programmatic. However, when this medium is removed the market saw impressive growth of 26.6 percent, to a total of €5.5bn.
Programmatic advertising is a system that automates processes and transactions involved purchasing and dynamically placing ads on websites or apps. Programmatic advertising makes it possible to purchase and place ads, including targeted advertising content, in less than a second.
Key findings of programmatic advertising report
Key findings in the ‘Attitudes to Programmatic Advertising’ report include:
- There is a continued push for a quality and safe advertising environment.
- Ads.txt is well established amongst publishers but awareness and adoption on the buy-side is low.
- Talent and skills remain a barrier to investment.
- Supply chain transparency is still an issue.
- The number of advertisers with in-house operations for programmatic is now higher than the number that outsource to an agency.
- Programmatic continues to be a catalyst for delivering brand campaigns at scale.
- In light of GDPR, stakeholders are looking to use more first party data, private marketplaces and contextual targeting.
Positive consumer experience
Announcing the report, Townsend Feehan, CEO, IAB Europe said, “The programmatic industry is experiencing a period of rapid transformation. Programmatic platforms must provide a safe environment for advertisers. A positive experience for consumers and addresses the demands made by new regulation throughout the world.”
Feehan added, “It is encouraging to see the majority of stakeholders expecting an increase in programmatic investments of up to 80 percent over the next 12 months. In particular, we expect digital out-of-home, audio and connected TV to be areas of growth. It is clear however that talent, the low buy-side adoption of ads.txt, and supply chain transparency remain impediments to growth. These are areas we will be addressing with our members.”
A key finding within the report is the buy-side has not yet adopted ads.txt and mobile-specific apps-ads.txt in significant numbers. Only 6 percent of advertisers and 26 percent of agencies are buying the majority of their inventory ads.txt verified.
Amongst publishers, ads.txt adoption is much higher. Fifty-six percent of them selling the majority of their inventory with an ads.txt file attached. This suggests that the ads.txt inventory exists but more buyer education and adoption is required.
A catalyst for change
Commenting on this insight, David Goddard, VP Global Programmatic Strategy, BBC Global News, said, “I hope the release of this year’s ‘Attitudes to Programmatic Advertising’ report will be the catalyst for greater levels of app-ads.txt adoption for publishers. Increasing the volume of inventory that is verified. At the same time increasing buy-side awareness of this simple, yet effective tool to tackle transparency and quality concerns.”
The study also reveals a clear shift to hybrid models for programmatic trading. The number of advertisers with in-house operations overtakes the number outsourcing to an agency. In addition, there was an increase in the number of advertisers using external consultancies. Advertisers using consultancies for programmatic buying grew to 7 percent in 2019, from zero percent reported in 2018. In addition, 52 percent of advertisers cite that they are considering taking programmatic in-house in the next 12 months. Similarly, 50 percent claim they plan to use an external consultancy.
Enterprise Times: What this means for business?
Spending on programmatic advertising continues to increase, with advertiser investments focused on video. The programmatic outlook looks positive with the majority of all business expecting an increase in investments over the next 12 months. The growth is likely to come from areas other than display. Digital out-of-home, audio and connected TV are identified as areas that stakeholders will invest in.
However, there are still challenges that exist and hamper adoption of programmatic trading. Namely, fraud, brand safety and supply chain transparency. Brands want to be able to use programmatic to target a specific audience under safe and premium conditions. The challenge is, these are bespoke to each buyer. Not to mention the controls to deliver on these KPIs are different on every platform. The skills needed to protect the brand through programmatic mediums is even more challenging to find. There is also more market awareness and education needed as the number of buyers buying ads.txt verified inventory is low compared to the number of publishers selling ads.txt inventory.