While the U.S. still represents half of the global programmatic marketplace, according to Magna Global’s 2015 global ad spend forecast, plenty of markets in Europe have caught up. However, the uptake of programmatic capabilities is still fragmented, thanks to different cultural and economic norms that still determine the openness of the market.
Trying to figure out where in the world programmatic was being implemented at the fastest rate, the IAB conducted a study with the Winterberry Group that asked publishers and marketers about their programmatic strategies. The U.S.’s dominance in programmatic has meant most of the growth outside the country has occurred in markets with the closest cultural and business ties to the States: Survey respondents said their efforts are mostly invested in Canada, the U.K., Australia and France. In the U.K., more and more video is being bought programmatically — the country is the leader and, according to the IHS, “one or two years ahead” of other European neighbors France, Germany, Italy and Spain.
Magna Global said that programmatic transactions reached the $21 billion mark globally in 2014, up 52 percent from the year prior. Across the world, programmatic spend grew to 42 percent of total display-related spend, up from 33 percent last year.
Here, then, is a breakdown of where the major European markets stand in the programmatic arms race.
Programmatic penetration forecast: 31 percent by 2017
One of the biggest impediments for a quicker programmatic uptake in southern Europe — and, to a lesser extent, Eastern Europe — is “just the way business works,” according to a media agency executive who preferred not to be named. “The agency business in those regions is really run on the basis of kickbacks from media owners.” So, for every euro spent on an owner, the agency gets 25 to 35 percent back. “That’s really the fuel for a lot of agency business.
In these areas, the larger ad economy also plays a part. In Italy, where the ad market is forecasted to decline, both publishers and agencies are more cautious. “If they’re all under pressure to hit numbers and spend is falling, that’s not an environment in which you want to start investing in people and in tech,” said the media exec.
Programmatic penetration forecast: 59 percent
The U.K. has followed the U.S. pretty closely. It lags somewhat behind, according to Adam Heimlich, svp, managing director programmatic at Horizon Media, because of the inordinate power agencies have in the U.K. “There are some very long-standing relationships, and the incumbents have a lot of power,” he said. “But that power is going down, and they can’t really stop the advantages of a growing programmatic market.”
Programmatic penetration forecast: 56 percent
View-through conversions haven’t been widely accepted among French publishers, which slows down display advertising, said Heimlich. According to Carat’s annual ad spend report, advertisers are starting to really embrace programmatic buying in France — and that will lead, this year, to a year-on-year 1.1 percent decrease in display.
Programmatic penetration forecast: 33 percent
One media agency exec said that only a few years ago Germany was the slowest European country in the space. Times have changed. The country doesn’t have the scale of the U.K. or France, but it “has the ambition,” he said. “There is a really strong relationship between publishers and agencies in Germany, and there are a couple of really dominant publisher ecosystems there that have meant that it’s dragged its feet on this a little bit. Those most powerful organizations are always last to embrace programmatic because they don’t feel the need.”
Programmatic penetration forecast: 60 percent
The Netherlands mirrors the U.K. very closely in terms of penetration, but the problem here is scale. According to a study by media consultancy FaR, 89 percent of publishers are selling more than half of their inventory programmatically, making it one of the most developed markets in Europe.