Attitudes to Programmatic Advertising - IAB Slovakia · Attitudes to Programmatic Advertising...

Attitudes to Programmatic Advertising REPORT

November 2017

CONTENT

IAB Europe Attitudes to Programmatic Advertising Report

3

4

6

7

12

18

21

Executive Summary

Introduction

Methodology & Participants

Attitudes to Programmatic Advertising

Current Adoption & Strategies

Measurement & Data Strategy

The Future of Programmatic Investment

EXECUTIVE SUMMARY

The third annual IAB Europe Attitudes to Programmatic report highlights four key findings:

Quality of advertising and transparency of fees are bottlenecks to investment

The business impacts of programmatic advertising beyond efficiencies are being realised

In-house strategies are becoming more prevalent

Investments in programmatic are set to continue to increase Better campaign reporting and control on the buy-side and improved inventory control on the sell-side are now cited more frequently as business impacts than lower media costs and trading efficiencies It is also worth noting that whilst programmatic is most likely to be used for display and mobile campaigns, video is not far behind in terms of adoption. Indeed, programmatic video revenues increased by 155% in 2016 emphasising it as a key growth area. In 2017 brand safety and fraud increased as barriers to investment for all stakeholder groups whilst viewability decreased as a barrier. Transparency of fees in the delivery chain is also a concern for advertisers and in response to IAB Europe formed its Transparency Working Group. The Working Group published a Transparency Guide with questions for stakeholders to ask of their supply chain partners in relation to fees. The guide also covers data and inventory source to address all key elements of programmatic trading. The study shows that programmatic strategies are evolving and in-house operations becoming more prevalent. For example, a quarter of advertisers are now using an in-house model compared to just 16% in 2016, and the number of advertisers outsourcing to an agency has decreased. The number of agencies and publishers with in-house programmatic operations has also increased. Looking forward to 2018, the majority of respondents state that they plan to further increase their programmatic trading activity.

EXECUTIVE SUMMARY


1 2 3 4

https://www.iabeurope.eu/research-thought-leadership/programmatic/iab-europe-report-european-programmatic-market-sizing-2016/


https://www.iabeurope.eu/research-thought-leadership/programmatic/iab-europe-transparency-guide/

INTRODUCTION

Digital is now the largest advertising medium in Europe, driven by video, mobile , improvements in ad quality, social media and the emergence of native advertising and programmatic advertising which continues to help marketers to better reach and engage relevant audiences in a real-time environment. Now a €41.9bn market, digital advertising leads TV by over €7bn. Half of European display ad revenue is now traded programmatically and the programmatic advertising market has reached a market value of more than €8bn. Programmatic is now a key imperative for advertisers, agencies and publishers alike. In order to understand the status of programmatic adoption across Europe, and the way in which it is being used for strategic competitive advantage on both the buy-side and sell-side of the digital advertising industry, IAB Europe’s Programmatic Trading Committee developed the Attitudes to Programmatic Advertising survey in 2015. Now in its third year, the 2017 report shows how attitudes, adoption and strategies are evolving. The survey asked about the following areas: • How much programmatic is used for different formats (display, mobile and video) • Drivers and barriers to programmatic investment • Operational models used for programmatic • Measurement and data strategy • The future of programmatic investment The report forms part of a comprehensive programme of pan-European educational and guidance outputs published by the IAB Europe Programmatic Trading Committee. Other outputs that may be of interest: • Transparency Guide • Programmatic Mobile White Paper • Key considerations for buy-side and sell-side programmatic strategies • Using Data Effectively in Programmatic White Paper


https://www.iabeurope.eu/research-thought-leadership/resources/iab-europe-report-adex-benchmark-2016-the-definitive-guide-to-europes-online-advertising-market/








http://www.iabeurope.eu/research-thought-leadership/iab-europe-attitudes-towards-programmatic-advertising-report/

https://www.iabeurope.eu/membership/committees/

https://www.iabeurope.eu/research-thought-leadership/programmatic/iab-europe-transparency-guide/

https://www.iabeurope.eu/research-thought-leadership/iab-europe-white-paper-programmatic-mobile/

https://www.iabeurope.eu/research-thought-leadership/iab-europe-infographics-key-considerations-for-buy-side-or-sell-side-programmatic-strategies/

https://www.iabeurope.eu/research-thought-leadership/programmatic/iab-europe-white-paper-using-data-effectively-in-programmatic/

The respondents were from some of the largest advertising and media organisations, including but not limited to:


METHODOLOGY & PARTICIPANTS

An online survey was used with the help of the national IAB network to ensure a representative sample across European markets. The survey received approximately 700 respondents between June and August 2017. The responses came from advertisers, agencies and publishers in 31 markets and respondents with both pan-European and Global remits. IAB Europe also segmented the markets according to their region: • Western Europe: UK, France, Germany,

Belgium, Switzerland, Netherlands, Austria, Ireland

• Northern Europe: Norway, Sweden, Denmark, Finland

• Southern Europe: Spain, Italy, Portugal, Greece

• Central and Eastern Europe: Belarus, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine

IAB Europe members can access the full data set with region breakouts by contacting Marie-Clare Puffett (contact details at the back of this report).

Global remit (109)

Pan-European remit (86)

Local remit (478)

Advertisers 92 Agencies 332

Publishers 243

FIGURE 1

Breakdown of respondents


ATTITUDES TO PROGRAMMATIC ADVERTISING

Targeting efficiencies driving buy-side adoption Gaining efficiencies stood out as a key reason for the industry to invest in programmatic in 2015 and 2016, and this motivation still dominates in 2017. Efficiencies does not just mean access to inventory at a lower cost though, lowering the cost of media has actually reduced as a driver between 2016 and 2017 for both advertisers and agencies. In fact, three quarters of advertisers and agencies cite targeting efficiencies as a key driver for programmatic investment. Programmatic video advertising investments increased by 155% in 2016. Unsurprisingly then, 49% of advertisers cite being able to engage with their audiences via programmatic video as a key driver to further investment. Publishers still face challenges around providing the supply to match demand. As video demand outstrips supply, this gives rise to video ads outside of in-stream. Buyers and sellers need to be mindful of the impact on user experience. The IAB Tech Lab LEAN Ads Program can be followed to enhance user experience. The European Video Ad Formats Landscape Report published by IAB Europe can also be referenced for further insight into the a video ad formats landscape across Europe, including the current usage for brand advertising campaigns, trends and technological specifications.

Programmatic continues to be an increasingly important part of the BBC advertising business. The growth of automated guaranteed in programmatic advertising has enabled publishers, agencies and advertisers to avoid billing issues, reconciliation and creative delivery challenges which can plague direct reservations. This has all led to greater efficiencies and control.

David Goddard Global Head of Programmatic Trading, BBC Worldwide



https://www.iab.com/iab-tech-lab-solutions/

FIGURE 2

Programmatic drivers by stakeholder 2016-17

Client demand is key to publisher adoption Market dynamics and the growth of demand in programmatic advertising is driving sell-side adoption. On the sell-side nearly three quarters of publishers are investing in programmatic due to client demand and half of publishers are hoping to gain competitive advantage.

Advertiser Agency Publisher

2016 2017 2016 2017 2016 2017

Lower cost of media 53% 22% 41% 28% N/A N/A

Targeting efficiencies 76% 71% 78% 75% N/A N/A

Change in data strategy to increase data quality

30% 43% 52% 46% 37% 55%

Maximising media value

N/A N/A N/A N/A 55% 37%

Trading / operational efficiencies

29% 29% 55% 60% 49% 34%

Gain competitive advantage

26% 29% 45% 38% 44% 48%

Making premium inventory available at scale

N/A N/A N/A N/A 44% 37%

Delivery of brand advertising campaigns at scale to target audience

49% 40% 45% 44% N/A N/A

Gaining access to premium inventory at scale

21% 23% 30% 28% N/A N/A

Delivering audiences via programmatic mobile

N/A N/A

N/A 30% 25%

Reaching audiences via programmatic mobile

30% 26% 41% 35% N/A N/A

Increased engagement via programmatic video

19% 49% 23% 21% 15% 21%

Agency recommendation

17% N/A N/A N/A N/A

Client demand N/A N/A 29% 29% 60% 71%

Increased granular control of media / inventory

23% 48% 37% 41% 27% 29%


Brand safety, fraud and transparency are bottlenecks to investment In 2017 brand safety and fraud increased as a barrier to investment for all stakeholders. This is echoed in the IAB Europe Digital Measurement Priorities Report which highlights that brand safety and invalid traffic are key to determining the quality of the digital advertising environment. Viewability is now less of a barrier suggesting more viewable ad formats are being made available and education has increased. 40% of advertisers also cite transparency of fees as a key barrier to programmatic investment.

Success in programmatic demands the right expertise For the past two years, expertise and hiring people with the right skillset has remained a barrier to investing in programmatic suggesting that stakeholders have some way to go in finding people with the right skills and implementing training programs.

FIGURE 3

Programmatic barriers by stakeholder 2016-17

Advertiser Agency Publisher 2016 2017 2016 2017 2016 2017

Hiring people with the right skill set

31% 43% 42% 52% 46% 46%

Training people adequately

21% 34% 35% 42% 40% 37%

Cost of technology 20% 42% 35% 29% 37% 48%

Cost of data 19% 26% 23% 20% 18% 20%

Quality of data 37% 34% 45% 53% 27% 27%

Transparency of fees (advertiser only option)

New for 2017 40% N/A N/A N/A N/A

Selecting and setting up the right technology

27% 26% 29% 22% 40% 37%

Having a clear understanding of the impact of programmatic trading on total revenue

31% 23% 31% 30% 42% 43%

Brand safety 30% 37% 40% 44% 23% 33%

Fraud 26% 46% 45% 40% 25% 33%

Viewability 30% 14% 37% 30% 24% 22%

Creative optimisation 17% 9% 17% 15% 11% 10%

Campaign performance

New for 2017 11% N/A 18% N/A 14%

Campaign measurement and reporting

27% 20% 17% 2% 19% 16%


https://www.iabeurope.eu/research-thought-leadership/programmatic/iab-europe-report-digital-measurement-priorities/

Costs are causing concern Costs, particularly for technology, are cited as a barrier to investment by nearly half of publishers and more than 40% of advertisers. A quarter of advertisers also note that the cost of data is a barrier.

Impacts of programmatic trading beyond efficiencies are realised Advertisers are realising the impacts of programmatic trading beyond cost efficiencies. Faster campaign setup and better campaign reporting are now cited as key business impacts by advertisers, for example.

FIGURE 4

Key business impacts of programmatic investment cited by advertisers

33%

56%

47%

34%

29%

60%

63%

31%

46%

49%

Faster campaign set up and go live

Reduced media wastage through greatercampaign control and targeting

Lower media unit costs (CPM/CPA)

Greater campaign flexibility

Better campaign reporting

2017 2016FIGURE 5

Key business impacts of programmatic investment cited by agencies

44%

72%

48%

58%

42%

42%

75%

40%

60%

31%

Faster campaign set up and go live

Reduced media wastage through greatercampaign control and targeting

Lower media unit costs (CPM/CPA)


Better campaign reporting

2017 2016


FIGURE 6

Key business impacts of programmatic investment cited by publishers

42%

68%

42%

46%

62%

46%

Increased media value (CPM)

Increased trading efficiencies

Increased control of inventory

2017 2016


CURRENT ADOPTION & STRATEGIES

Programmatic is mainstream across formats The majority of stakeholders surveyed are investing in digital and most are also deploying some form of programmatic advertising for their display, mobile and video campaigns. Programmatic is most likely to be used for display and mobile campaigns. Video is not far behind, however, as more than three quarters of advertisers and agencies are using programmatic for trading video campaigns.

Percentage of stakeholders using programmatic for their display campaigns

Not doing programmatic

Doing programmatic

FIGURE 7

92%

8%

89%

11%

88%

12%

Advertisers Agencies Publishers


90%

10%

82%

18%

89%

11%

Percentage of stakeholders using programmatic for their mobile campaigns

FIGURE 8


Doing programmatic


In-house operations are becoming more prevalent The 2016 report highlighted that there was a clear evolution of strategies as markets mature; the 2017 research demonstrates that in-house strategies are becoming more prevalent amongst all stakeholders as demonstrated in the following graphs. It is also clear that the number of advertisers using an agency is decreasing.

71%

29%

Percentage of stakeholders using programmatic for their video campaigns


Doing programmatic

FIGURE 9


79%

21%

77%

23%

63%

3% 1%

16% 16%

46%

9% 9%

23% 14%

0%10%20%30%40%50%60%70%80%90%

100%

Outsourced to anagency

Outsourced to anindependenttrading desk

Outsourced to aDSP

In-houseoperations

Hybrid model(more than one of

the above)

2016 2017

Advertiser operational models

FIGURE 10


Agency operational models

FIGURE 11

Publisher operational models

FIGURE 12

11% 14%

48%

27%

9% 12%

54%

26%

0%10%20%30%40%50%60%70%80%90%

100%

Outsourced to anindependent trading desk

Outsourced to a DSP In-house agency tradingdesk

Hybrid model (more thanone of the above)

2016 2017

9% 17%

40% 34%

8% 8%

44% 40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Outsourced to a third-party network

Outsourced to an SSP In-house operations Hybrid model (more thanone of the above)

2016 2017


Agencies are driving the move to in-house IAB Europe wanted to understand whether those stakeholders who do not currently have an in-house model are considering one and the drivers for doing so. The research shows that three quarters of agencies who do not have an in-house model currently are considering one, as they migrate away from I/O media buying. 56% of publishers and 46% of advertisers that don’t already have an in-house strategy state that they are planning to develop one in the next 12 months. The drivers for taking programmatic in-house are related to increasing control of data and operations and better monetisation of inventory and the key challenges are linked to hiring people with the right skills and training.


1 Keep first party data under control

Increase operational control

Better monetisation of inventory

2 Integrate programmatic with other in-house teams like CRM, customer service etc.

Better understanding of the consumer pathway

Better integration of audience data into trading processes

3 Increase operational control and gain greater transparency on where campaigns run

Better ability to access audience insight

Opportunity to implement more efficient multi-platform advertising strategy

Top 3 drivers of an in-house strategy by stakeholder

FIGURE 13


1 Hiring people with the right skill set

Data quality


2 Training people adequately



3 Campaign optimisation


Data quality

Top 3 challenges of an in-house strategy by stakeholder

FIGURE 14


Stakeholders experience improved performance, flexibility and control

through in-house operations The top 3 business impacts of in-house programmatic operations cited by each stakeholder group were related to performance, flexibility and control.


1 Better use of unique data


Increased media value

2 Better campaign performance through alignment with other activities - e.g. Search, Social

Improved campaign performance through building knowledge in our team

Increased control of inventory

3 Better visibility and control of campaign costs

Reduced media wastage through greater campaign control and targeting

Increased trading and operational efficiencies

Top 3 business impacts of an in-house strategy by stakeholder

FIGURE 15

Our decision to move programmatic buying in-house has given us various benefits in terms of cost-saving, transparency and efficiency, but most importantly, running programmatic in-house means we have many valuable insights into our customers’ behaviour and the opportunity to react to the incoming data, as we receive it. This allows us to keep our campaigns as customer-centric as they can be.

Alexander Pasch Media Strategist, Schneider Electric


More advertisers are prepared for developing an in-house model than in 2016 – in 2016 47% of advertisers had sufficient budget to invest in programmatic advertising technologies, now 67% have the required budget. In 2016 a quarter of advertisers had sufficient budget for the required staff, now nearly 60% are prepared for this, suggesting advertisers have moved programmatic up their agenda and started to implement plans.

67% of advertisers

44% of agencies

59% of publishers

Tech

58% of advertisers

46% of agencies

55% of publishers

Staff

Percentage of respondents that state they have the sufficient budget to invest in programmatic tech and staff for an in-house strategy

FIGURE 16


MEASUREMENT & DATA STRATEGY

Programmatic is a key element of media planning More than two thirds of all stakeholders are using the same success metrics for programmatically traded display campaigns as those traded non-programmatically suggesting it is now an integral element of media planning.

Metrics are becoming more sophisticated In 2016, the click was the most popular metric used for programmatic campaigns but now stakeholders have moved towards brand metrics such as brand awareness and purchase intent as well as quality metrics such as targeting accuracy, brand safety and viewability. As the following table highlights, brand awareness is now being used by nearly twice as many advertisers and advertising recall is being used by more than double the number of agencies and publishers compared to 2016. The number of stakeholders measuring the level of brand safety and fraud has increased three-fold from 2016 to 2017.



2016 2017 2016 2017 2016 2017

Advertising recall 21% 67% 29% 64% 18% 51%

Brand awareness 43% 83% 51% 71% 47% 68%

Brand familiarity 16% 73% 12% 56% 23% 59%

Brand affinity 10% 70% 29% 65% 25% 59%

Purchase intent 37% 80% 47% 77% 29% 33%

Likelihood to recommend

6% 45% 10% 41% 9% 32%

Social media likes New for 2017 33% New for 2017 22% New for 2017 20%

Social media shares New for 2017 43% New for 2017 41% New for 2017 22%

Roll-over or mouse-over advertisement

New for 2017 30% New for 2017 23% New for 2017 20%

Becoming a fan or a follower

14% 35% 16% 22% 4% 59%

Click through rate (CTR)

60% 54% 62% 64% 52% 36%

Individuals' interaction with content or ads

32% 62% 32% 42% 14% 48%

Synergies of multi-screening

14% 47% 26% 68% 20% 18%

Touch screen metrics such as pinch, swipe, expand

6% 40% 11% 28% 6% 50%

Uplift in direct site visits

40% 63% 44% 71% 28% 29%

Uplift in search behaviours

18% 57% 25% 49% 6% 38%

Uplift in dwell time New for 2017 56% New for 2017 49% New for 2017 75%

Level of viewability 38% 78% 61% 82% 57% 64%

Completion rates (for video ads)


Length of time an ad is in-view


Targeting accuracy 38% 80% 50% 81% 34% 73%

Cost per mille (CPM) 48% 51% 68% 65% 70% 76%

Level of brand safe, non-fraudulent impressions

19% 73% 36% 79% 22% 75%

Volume of impressions delivered

44% 50% 52% 60% 51% 66%

Sales KPIs 49% 80% 61% 79% 41% 67%

Metrics used for programmatic campaigns by stakeholder 2016-17

FIGURE 17


Use of first party data is increasing The majority of all stakeholders are currently leveraging first party data and this has increased from 2016. The number of advertisers using third party data has increased significantly too demonstrating signs of mature data strategies. Agencies continue to use a mix of data sources.

Second party data is also set to play a more prominent role with nearly three quarters of advertisers (72%) and agencies (71%) planning to use it in the future. Publishers indicate that they will stick with their first party data with a smaller number (45%) planning to use second party data. DMPs and own properties are lead sources for data More than half of advertisers and publishers and three quarters of agencies are using a Data Management Platform (DMP) to source their data. Advertisers and publishers are also just as likely to use their own platform or properties to source their data, demonstrating the importance of first party data for these stakeholders.

79% 84%

70% 82%

72% 79%

43% 50% 48% 53%

27% 31%

44%

69% 69% 77%

40% 46%

5% 3% 6% 3% 14%

7%

0%10%20%30%40%50%60%70%80%90%

100%

2016 2017 2016 2017 2016 2017


First party data Second party data Third party data None

Type of audience data used by stakeholder 2016-17

FIGURE 18

Data sources used by stakeholder 2016-17

FIGURE 19


56% 53% 53% 47%

31% 28% 19%

78%

57% 56% 55%

40% 44% 34%

65%

13%

56%

34%

18% 17% 27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Datamanagement

platform(DMP)

Demand-sideplatform (DSP)

Own platform/ properties

Data provider Ad exchanges Datamarketplace

Supply-sideplatform (SSP)


THE FUTURE OF PROGRAMMATIC INVESTMENT

Investment in programmatic set to continue to increase

Similar to 2016 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; approximately 90% of all stakeholders cite an increase in the next 12 months.

FIGURE 20

Percentage of stakeholders that cite an increase in programmatic over the next 12 months

Advertisers

88%

Agencies

93%

Publishers

88%


Simon Halstead, Chair IAB Europe Programmatic Trading Committee and Head

of Open Demand International, Oath

Tim Jones, Chair, IAB Europe Research

Committee and International Research and Consumer Insight Lead, Oath

Joanna Burton, VP European Strategy, SpotX

IAB Europe would like to thank the following contributors who helped to devise the survey and report:

About the IAB Europe Programmatic Trading Committee

The IAB Europe Programmatic Trading Committee is a multi-stakeholder initiative between publishers, technology platforms, agencies and advertisers to increase their understanding of the programmatic ecosystem and the impact it is having on digital advertising and influence industry initiatives to improve the ecosystem. The Committee is delivering a comprehensive pan-European programme of educational activities. Chair: Simon Halstead, Head of Open Demand International, Oath Vice-Chair: Dino Bongartz, CEO, The ADEX

WITH THANKS


www.iabeurope.eu

ABOUT IAB Europe

@iabeurope

/iab-europe

IAB Europe is the leading European-level industry association for the digital advertising ecosystem. Its mission is to promote the development of this innovative sector and ensure its sustainability by shaping the regulatory environment, demonstrating the value digital advertising brings to Europe’s economy, to consumers and to the market, and developing and facilitating the uptake of harmonised business practices that take account of changing user expectations and enable digital brand advertising to scale in Europe. CONTACT Marie-Clare Puffett [email protected] Business Programmes Manager, IAB Europe

http://www.iabeurope.eu











Attitudes to Programmatic Advertising - IAB Slovakia · Attitudes to Programmatic Advertising...

Documents

Transcript of Attitudes to Programmatic Advertising - IAB Slovakia · Attitudes to Programmatic Advertising...