Annual Attitudes to Programmatic Advertising report has been published – read the most interesting findings here
IAB Europe’s annual Attitudes to Programmatic Advertising Report is a comprehensive analysis of the European programmatic landscape, covering strategies and adoption trends, drivers of and barriers to growth, and forecasts for the future for 31 markets. If you are working on programmatic, we recommend that you read this report. To make it easier, we’ve put together the key findings here:
- 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
Investment in programmatic trading for display has continued to increase, with advertiser investments focused on video. The outlook is also positive with the majority of all stakeholders 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 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 and 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.
Key business impacts
Similarly to last year, for the buy side, the core impact of programmatic trading continues to be more effective campaigns. Better targeting, less wastage, access to media at a lower rate and greater campaign flexibility were the key reasons cited by advertisers and agencies. These efficiencies were also representative of the responses from the ad tech vendors. For publishers, while efficiencies were the number one impact of programmatic investment, it was also helping them achieve a greater return on their inventory by helping them increase the value of their media.
In-house models continue to increase amongst publishers but remain stagnant across buy-side stakeholders. 65% of publishers now have an in-house model compared to 50% in 2018 and 66% of agencies have an in-house trading desk compared to 62% in 2018. Whilst the number of advertisers with an in-house model hasn’t increased since 2018 (38% in 2019 and in 2018), the number of with inhouse operations is now higher than the number that outsource to an agency (24%). Therefore 2019 has really been about the emergence and development of hybrid models. 21% (up from 16% in 2018) of advertisers now have a hybrid model.
With the implementation of GDPR and concerns around data control, it is perhaps not surprising to see that of all audience data types, first-party is the principal source used by the majority of stakeholders and this has remained stable since 2016. There has been a slight increase in the use of third-party data amongst advertisers with 63% using it in 2019 vs. 52% in 2018.
With the rise in advertiser investment in programmatic, it’s surprising more have not been taking advantage of industry initiatives designed to help improve the supply path of inventory and reduce auction arbitrage. Only 6% of advertisers and 26% of agencies are buying more than 81% of verified ads.txt verified, this is despite a significant percentage of both buy-side stakeholders that are concerned with the levels of fraud and brand safety (see section 4). Amongst publishers, ads.txt adoption is much higher with 56% of them selling more than 81% of their inventory with an ads.txt file attached. This suggests that the ads.txt inventory exists but more buyer education and awareness is needed.
GDPR and consent
For the first time IAB Europe asked stakeholders about the percentage of inventory bought that uses a consent management platform (CMP) to gain consent. 38% of publishers stated that 81% or more of their inventory is being bought via a CMP, and 17% of buyers stated that they are buying 81% of inventory with consent being passed. This data was collected before ICO, CNIL and other regulatory bodies released their stance on GDPR. There is likely to be a sharp rise in the percentage of inventory that is being bought and sold with a consent signal following these.
Future of programmatic
The key growth areas identified across advertisers, agencies, publishers and ad tech, seem to suggest there is a differing of opinion on the readiness across Europe for new format adoption. Advertisers are seeing DOOH (digital out of home) as the largest growth opportunity over the next 12 months, with the other three groups all seeing the greatest opportunities across Audio and Connected TV, where there has arguably been greater traction for programmatic already. It’s worth noting that outside of programmatic buying, DOOH is tipped to be one of the fastest growing areas of investment for advertisers, with non-digital OOH expected to be one of the only growth areas amongst ‘traditional’ media in the UK according to eMarketer.
Source: IAB EUROPE: Attitudes to Programmatic Advertising -report. You can find the full report here.