attitudes towards programmatic advertising - a deep dive into buy-side attitudes and adoption
TRANSCRIPT
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Attitudes towards Programmatic Advertising
September 2016
A deep dive into buy-side attitudes and adoption
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CONTENT
Introduction
Summary
Programmatic is mainstream
Drivers, Barriers and Business Impacts
Current Adoption and Strategies
Measurement and Data Strategy
Future of Programmatic
Contact
The following report provides further insight into the buy-side (advertisers and agencies) attitudes and
current adoption of programmatic advertising following the full report publication. The additional
data in this report includes a breakdown of advertiser and agency respondents by regions as listed
below:
Central and Eastern Europe: Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Serbia, Slovakia, Slovenia, Turkey
Northern Europe: Norway, Sweden, Denmark, Finland
Southern Europe: Spain, Italy, Portugal , Greece
Western Europe: UK, France, Germany, Belgium, Switzerland, Netherlands, Austria, Ireland
INTRODUCTION
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Programmatic is mainstream – majority of all buy-side stakeholders are investing in programmatic
Programmatic is increasingly seen as a strategic component of media planning and not longer just a place for remnant inventory
Programmatic strategies evolve as market mature and buy-side stakeholders are experimenting with hybrid and in-house models, however clients outsourcing to an agency still dominates
Buy-side stakeholders view skills and training as a key barrier to programmatic investment
The future of programmatic looks bright – the majority of buy-side stakeholders plan to increase their investment over the next 12 months
SUMMARY
PROGRAMMATIC IS MAINSTREAM
PROGRAMMATIC IS MAINSTREAM
The survey highlights that programmatic is now mainstream - all buy-side stakeholders surveyed are investing in digital and now most are also deploying some form of programmatic advertising - 87% of advertisers, 93% of agencies.
Whilst almost everyone is investing in programmatic now the majority of buying and selling is still manual. Over two thirds of agencies state that more than 20% of this digital advertising is traded via manual processes.
ADVERTISERS DOING PROGRAMMATIC
87%
13%
Total Europe
Not doing programmatic
Doing programmatic
71%
29%
Western Europe
65%
35%
Central & Eastern Europe
99%
1%
Northern Europe
85%
15%
Southern Europe
AGENCIES DOING PROGRAMMATIC
93%
8%
Total Europe
Not doing programmatic
Doing programmatic
93%
7%
Western Europe
94%
6%
Central & Eastern Europe
93%
7%
Northern Europe
83%
17%
Southern Europe
PROGRAMMATIC DRIVERS, BARRIERS AND BUSINESS
IMPACTS
EFFICIENCY AND COST ARE DOMINANT IN
DRIVING BUY-SIDE ADOPTION
Gaining efficiencies stood out as a key motivation for the industry to invest in programmatic in 2015, this driver is still dominant in 2016 particularly for buy-side stakeholders. Advertisers and agencies seek targeting efficiencies, agencies also want to gain trading and operational efficiencies.
Mobile wasn’t factored highly in 2015, however now almost a third of advertisers and over 40% of agencies are investing in programmatic to reach mobile audiences. Programmatic video is also considered highly by advertisers in Western Europe and is creeping onto the agenda of those in CEE markets.
Delivery of brand advertising campaigns at scale is also important to advertisers, especially in the Northern and Western European markets.
PROGRAMMATIC DRIVERS - ADVERTISERS
53%
76%
29% 30%26%
49%
22%
30%
19%23%
68%
74%
26%21%
16%
37%
5%
21%
16% 16%
33%
67%
0% 0%
33%
67%
0% 0% 0%
33%
64%
71%
43%
50%
29%
57%
14%
29%
36%
14%
27%
82%
9%
36%
27%
45%
27%
45%
9%
0%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lower cost of
media
Targeting
efficiencies
Trading
efficiencies
Change in data
strategy to
increase data
quality
Gain competitive
advantage
Delivery of brand
advertising
campaigns at
scale to target
audience
Gaining access to
premium
inventory at scale
Reaching
audiences via
programmatic
mobile
Increased
engagement via
programmatic
video
Increased granular
control of media
Total CEE NE WE SE
PROGRAMMATIC DRIVERS - AGENCIES
41%
77%
55%52%
45% 45%
30%
41%
23%
29%
37%
45%
77%
52% 52%55%
44%
27%
37%
16%
38%34%
36%
86%
79%
43%
57%
50%
21% 21%
14%
29%
64%
45%
82%
51%55%
27%
49%
35%
49%
27%24%
53%
36%
75%
54% 54%
39%36%
29% 29%
14%
29%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lower cost of
mediaTargeting
efficienciesTrading
efficienciesChange in data
strategy to
increase data
quality
Gain competitive
advantageDelivery of brand
advertising
campaigns at
scale to target
audience
Gaining access
to premium
inventory at
scale
Reaching
audiences via
programmatic
mobile
Increased
engagement via
programmatic
video
Client demand Increased
granular control
of media
Total CEE NE WE SE
50%
of advertisers in mature programmatic markets want to scale their brand campaigns
of agencies in mature programmatic markets want to increase their granular control of media
Advertisers enter programmatic with the objective of lowering the cost of media but those in more mature markets are realising more strategic benefits such as delivering relevant ads to relevant audiences by scaling their brand advertising campaigns (70% of advertisers in markets new to programmatic want to lower the cost of media; 50% in advanced markets; 37% of advertisers in markets new to programmatic want to scale their brand campaigns; 50% in advanced markets).
A similar story prevails amongst agencies, they start with the objective of wanting to lower media costs and then go on to realise other drivers such as increased control of media. Agencies in markets new to programmatic also particularly feel the need to invest in programmatic due to client demand suggesting clients are driving the uptake in those markets (37% in markets new to programmatic; 21% in advanced markets).
55%
STRATEGIC DRIVERS ARE REALISED AS MARKETS MATURE
SUCCESS IN PROGRAMMATIC DEMANDS THE
RIGHT EXPERTISE
Skills and hiring people with the right skillset are still key barriers to investing in programmatic suggestingthat stakeholders have some way to go in finding people with the right skills and implementing trainingprograms.
Buy-side stakeholders are also concerned with many of the industry’s hot topics: data quality; fraud; brandsafety and viewability, particularly those in Northern Europe. Agencies perceive fraud as a higher risk thando advertisers and so this may be why they are taking more proactive steps with data (see section 6)
Advertisers in Western Europe perceive with campaign measurement and reporting as a barrier suggestingthey want to see improvements in this area.
KEY BARRIERS TO PROGRAMMATIC INVESTMENT -
ADVERTISERS
31%
21% 20% 19%
37%
27%31% 30%
26%30%
17%
27%
37%
26% 26%
11%
32%
26% 26%21%
16%
26%
11%
26%
33%
0% 0% 0% 0% 0%
33% 33% 33%
100%
33%
0%
21% 21% 21%
14%
57%
29%
21% 21%
36%
29%
21%
43%
9%
18%
0%
18%
36%
27% 27% 27%
18%
36%
9%
27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Hiring people
with the right
skill set
Training
people
adequately
Cost of
technology
Cost of data Quality of data Selecting and
setting up the
right
technology
Having a clear
understanding
of the impact
of
programmatic
trading on total
revenue
Brand safety Fraud Viewability Creative
optimisation
Campaign
measurement
and reporting
Total CEE NE WE SE
KEY BARRIERS TO PROGRAMMATIC INVESTMENT -
AGENCIES
42%
35% 35%
23%
45%
29% 31%
40%45%
36%
17% 17%
38%33%
42%37%
49%
33%30%
36%
44%40%
18% 19%
50%
21%
36%
14%
57%
29%
50%
36%
57%
43%
21% 21%
43%
35%
41%
18%
47%
29%25%
53% 51%
41%
16% 16%
32%
25%29%
18%
25%
32%
43%39%
43%
32%
25% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Hiring people
with the right
skill set
Training
people
adequately
Cost of
technology
Cost of data Quality of data Selecting and
setting up the
right
technology
Having a clear
understanding
of the impact
of
programmatic
trading on
total revenue
Brand safety Fraud Viewability Creative
optimisation
Campaign
measurement
and reporting
Total CEE NE WE SE
REDUCTION OF MEDIA WASTAGE TRUMPS UNIT COST REDUCTION AS A KEY BUSINESS IMPACT
In 2016 IAB Europe asked the respondents about the business impacts realised from programmatic for the first time. Both advertisers and agencies cited reduced media wastage through greater campaign control and targeting as the top impact.
56%
47%34%
29%
33%
Reduced media wastage through
greater campaign control and
targeting
Lower media unit costs (CPM/CPA)
Greater campaign flexibility
Better campaign reporting
Faster campaign set up and go live
72%
48%
58%
42%
44%
Advertisers Agencies
CURRENT ADOPTION & STRATEGIES
CLEAR EVOLUTION OF ADVERTISER PROGRAMMATIC STRATYEGY AS MARKETS MATURE
The survey showed us that there is a clear evolution of advertiser programmatic strategy as markets mature
Buyers start with an independent specialist perhaps looking for an independent managed service with flexibility and control, then move to an agency or DSP to provide a managed service with media buying expertise and finally in mature markets end up with an agency or hybrid model, but in the main still rely on agencies. More information on these operational models can be found in section 2.2 of the IAB Europe Road to Programmatic white paper.
Despite the challenges to the agency trading desk model, for example advertiser in-house buying, it remains the predominant way in which agencies build the skills to execute programmatic buying effectively, almost a third do have a hybrid model suggesting the trading desks will become part of a wider programmatic strategy. Advertisers in Northern Europe are more likely to experiment with a hybrid model. Agencies are more likely to use a DSP or independent trading desk than advertisers directly.
Outsourced to an
independent trading desk
Outsourced
to a DSP
Outsourced
to an agency
Outsourced
to an agency
Hybrid (a combination of
any of the aforementioned
strategies)
In-house
Markets new to programmatic
Advanced programmatic
markets
New markets, 11%; Mid-developments markets 0%;
Advanced markets 0%
New markets, 0%; Mid-
developments markets 6%;
Advanced markets 0%
New markets, 63%; Mid-
developments markets 83%;
Advanced markets 50%
New markets, 11%; Mid-
developments markets 6%;
Advanced markets 40%
New markets, 16%; Mid-
developments markets 0%;
Advanced markets 10%
CLEAR EVOLUTION OF ADVERTISER PROGRAMMATIC STRATYEGY AS MARKETS MATURE
OPERATIONAL MODELS - ADVERTISERS
Graphs showing operational models by market
63%
3%1%
16% 16%
63%
11%
0%
16%
11%
33%
0% 0% 0%
67%64%
0% 0%
14%
21%
91%
0%
9%
0% 0%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Outsourced to an agency Outsourced to an independent
trading deskOutsourced to a DSP In-house operations Hybrid model (more than one of the
above)
Total CEE NE WE SE
OPERATIONAL MODELS - AGENCIES
11%14%
48%
27%
45%
14%12%
29%
57%
0%
21% 21%
53%
4%
20%24%
48%
19%
11%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
In-house agency trading desk Outsourced to an independent trading desk Outsourced to a DSP Hybrid model (more than one of the above)
Total CEE NE WE SE
IAB Europe wanted to understand whether those stakeholders who do not currently have an in-house model areconsidering one and what were their reasons for doing so or not doing so.
Almost three quarters of agencies who do not currently have an in-house model are considering one, as they migrateaway from I/O media buying.
Advertisers continue to rely on their agencies; three quarters of advertisers who do not currently have an in-housemodel are not considering one, this has increased from 54% in 2015. Interestingly though, those that are consideringin-house are most likely doing so to reduce agency costs. However in-house is more likely to be considered byadvertisers in advanced markets; 67% of advertisers in advanced markets are considering an in-house model but only12% of those in markets new to programmatic share this view.
OPERATIONAL MODELS ARE CHANGING
Bringing programmatic in-house means full control over what happens with our
most valuable good: the data of our customers. Setting up an in-house solution first
and foremost requires education on programmatic, in order to get the various
functions that need to be involved on board. Once the set-up is complete, it is a
great way to foster cross-functional collaboration while providing our customers
with personalised advertising
Henrik Schulte,
Media Strategy Manager EMEA, Schneider Electric
We are migrating programmatic expertise into client teams as programmatic
evolves from point solutions on a plan to the method to execute a consumer
centric communication plan. We still focus on the same questions, of whom do we
want to reach, what do we want to achieve, how do we measure success, which
message and format will resonate and which media placements have the highest
impact – but now we answer those questions in much more granular buying
decisions, based on much more data and leveraging much more sophisticated tools.
Oliver Gertz, Managing Director Interaction, EMEA and
Programmatic Lead Global Clients , Mediacom
MEASUREMENT AND DATA STRATEGY
PROGRAMMATIC IS A KEY ELEMENT OF MEDIA PLANNING
75% 70%
Advertisers Agencies
use the same success metrics for programmatically traded display campaigns as those traded non-programmatically
The majority of all stakeholders are using the same success metrics for programmatically traded displaycampaigns as those traded non-programmatically suggesting it is now an integral element of mediaplanning.
BRAND AWARENESS CLOSES IN ON THE CLICK
IAB Europe asked about which advertising effectiveness metrics are used to evaluate programmatically traded display campaigns for the first time in 2016. whilst the results show that click on advertisement is still widely used, brand awareness and purchase intent metrics follow closely behind suggesting maturing measurement strategies.
Agencies in Southern European markets are more likely to use brand metrics than other European regions.
21%
43%
16%
10%
37%
6%
14%
60%
41%
14%
6%
37%
17%
11%
37%
11%
0%
21%
5%
16%
58%
11%
5%0%
37%
11%
0%
50%
100%
0% 0% 0% 0%
100%
50%
0% 0%
50%
0%
7%
36%
0% 0%
29%
14%
0%
57%
50%
21%
14%
36%
21%
33% 33%
11% 11%
33%
11%
22%
67%
44%
22%
0%
56%
33%
0%
20%
40%
60%
80%
100%
120%
Advertising
recall
Brand
awareness
Brand
familiarity
Brand affinity Purchase intent Likelihood to
recommend
Becoming a fan
or follower
Click on
advertisement
Individuals’
interaction
with content or
ads (like /
sharing /
commenting /
creating social
buzz)
Synergies of
multi-screening
Touch screen
metrics such as
pinch, swipe,
expand
Uplift in direct
site visits
Uplift in search
behaviours
Total CEE NE WE SE
KEY ADVERTISING METRICS - ADVERTISERS
29%
51%
12%
29%
47%
10%
16%
62%
32%
26%
11%
44%
25%28%
46%
13%
28%
39%
9% 10%
67%
32% 31%
7%
37%
30%
18%
45%
18%
27%
55%
9%
27%
64%
45%
9%
27%
91%
18%
29%
56%
10%
20%
51%
12%
22%
63%
29%
17%
10%
51%
27%
36%
59%
9%
50%
59%
14%18%
64%
32%27%
23%18%
23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Advertising
recall
Brand
awareness
Brand
familiarity
Brand affinity Purchase intent Likelihood to
recommend
Becoming a fan
or follower
Click on
advertisement
Individuals’
interaction
with content or
ads (like /
sharing /
commenting /
creating social
buzz)
Synergies of
multi-screening
Touch screen
metrics such as
pinch, swipe,
expand
Uplift in direct
site visits
Uplift in search
behaviours
Total CEE NE WE SE
KEY ADVERTISING METRICS - AGENCIES
FIRST PARTY DATA DOMINATES
The majority of all stakeholders are currently leveraging first party data for their programmatic
campaigns. Agencies show signs of more mature data strategy via data integration and on boarding of
third party data whilst advertisers are utilising their first party data.
AUDIENCE DATA USED BY
ADVERTISERS
0%
0%
50%
100%
7%
43%
50%
71%
11%
56%
11%
56%
0%
26%
42%
89%
5%
44%
43%
79%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
None
Third party data
Second party data
First party data
Total CEE SE WE NE
AUDIENCE DATA USED BY AGENCIES
0%
91%
82%
82%
0%
83%
50%
73%
0%
64%
50%
55%
11%
58%
42%
68%
6%
69%
48%
70%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
None
Third party data
Second party data
First party data
Total CEE SE WE NE
FUTURE OF PROGRAMMATIC
Advertisers
94%
Agencies
97%
INVESTMENT IN PROGRAMMATIC IS SET TO
CONTINUE TO INCREASE
Percentage of stakeholders that cite an increase in programmatic over the next 12 months
CEE – 100%NE – 100%WE – 79%SE – 88%
CEE – 96%NE – 100%WE – 100%SE – 100%
Similar to last year programmatic trading revenues and investments are set to increase, regardless of market or stakeholder type. There is little difference in optimism regarding the expected increase of programmatic trading investments and revenues; over 90% of all stakeholders cite an increase in the next 12 months.
IAB Europe is the voice of digital business and the leading European-level industry association
for the digital advertising ecosystem.
@iabeurope
/iab-europe
www.iabeurope.eu
For more information on the Attitudes to Programmatic Advertising Research please contact Marie-Clare:
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