x A deep dive into buy-side attitudes and adoption

Transcription

1 Attitudes towards Programmatic Advertising x A deep dive into buy-side attitudes and adoption September 2016

2 CONTENT Introduction Summary Programmatic is mainstream x Drivers, Barriers and Business Impacts Current Adoption and Strategies Measurement and Data Strategy Future of Programmatic Contact

3 INTRODUCTION 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

4 SUMMARY 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 x 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

5 PROGRAMMATIC IS MAINSTREAM

6 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 2 of this digital advertising is traded via manual processes.

7 ADVERTISERS DOING PROGRAMMATIC Western Europe Central & Eastern Europe Total Europe 13% 29% 35% 71% 65% 87% Northern Europe 1% Southern Europe 15% Doing programmatic Not doing programmatic 99% 85%

8 AGENCIES DOING PROGRAMMATIC Total Europe Western Europe 7% Central & Eastern Europe 6% 8% 93% 94% 93% Northern Europe 7% Southern Europe 17% Doing programmatic Not doing programmatic 93% 83%

9 PROGRAMMATIC DRIVERS, BARRIERS AND BUSINESS IMPACTS

10 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 4 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.

11 PROGRAMMATIC DRIVERS - ADVERTISERS % 64% 76% 74% 71% 67% 82% 67% % 33% 27% Lower cost of media Targeting efficiencies 43% 29% 3 26% 21% 9% Trading efficiencies 5 36% Change in data strategy to increase data quality 26% 16% 33% 29% 27% Gain competitive advantage 49% 37% 57% 45% Delivery of brand advertising campaigns at scale to target audience 22% 14% 27% 3 21% 29% 45% 5% Gaining access to premium inventory at scale Reaching audiences via programmatic mobile 36% 23% 19% 16% 16% 9% Increased engagement via programmatic video 33% 14% Increased granular control of media Total CEE NE WE SE

12 PROGRAMMATIC DRIVERS - AGENCIES % 82% 77% 77% 75% 79% 7 64% % 45% 41% 36% 36% 55% 54% 55% 54% 52% 51% 52% 52% 43% 57% 55% 5 49% 45% 45% 44% 39% 36% 27% 49% 41% 37% 35% 3 29% 29% 27% 21% 21% 27% 23% 16% 14% 14% 38% 29% 29% 29% 24% 37% 34% 53% 18% 1 Lower cost of media Targeting efficiencies Trading efficiencies Change in data strategy to increase data quality Gain competitivedelivery of brand advantage 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

13 STRATEGIC DRIVERS ARE REALISED AS MARKETS MATURE 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 (7 of advertisers in markets new to programmatic want to lower the cost of media; 5 in advanced markets; 37% of advertisers in markets new to programmatic want to scale their brand campaigns; 5 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). 5 55% 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

14 SUCCESS IN PROGRAMMATIC DEMANDS THE RIGHT EXPERTISE Skills and hiring people with the right skillset are still key barriers to investing in programmatic suggesting that stakeholders have some way to go in finding people with the right skills and implementing training programs. Buy-side stakeholders are also concerned with many of the industry s hot topics: data quality; fraud; brand safety and viewability, particularly those in Northern Europe. Agencies perceive fraud as a higher risk than do 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 suggesting they want to see improvements in this area.

15 KEY BARRIERS TO PROGRAMMATIC INVESTMENT - ADVERTISERS % 31% 33% 26% 26% 21% 21% 21% 2 21% 18% 19% 18% 14% 9% 11% Hiring people with the right skill set 37% 32% 57% 36% Training people adequately Cost of technology Cost of data Quality of data Selecting and setting up the right technology 36% 31% 33% 33% 33% 3 27% 29% 26% 27% 26% 27% 27% 26% 21% 21% 21% 16% 18% Having a clear understanding of the impact of programmatic trading on total revenue Total CEE NE WE SE 36% 3 29% 26% 33% 17% 21% 11% 9% Brand safety Fraud Viewability Creative optimisation 27% 26% 43% 27% Campaign measurement and reporting

16 KEY BARRIERS TO PROGRAMMATIC INVESTMENT - AGENCIES % 43% 38% 32% 42% 41% 35% 33% 35% 35% 36% 29% 25% 21% 37% 23% 18% 18% 14% 57% 49% 45% 47% 25% 33% 32% 29% 29% 29% 5 43% 31% 3 25% 53% 4 39% 36% 36% 57% 51% 45% 44% 43% 43% 4 41% 36% 32% 25% 25% 21% 17% 18% 17% 19% 21% 16% 16% 1 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

17 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. Advertisers Agencies Reduced media wastage through greater campaign control and targeting Lower media unit costs (CPM/CPA) 33% 56% 44% 72% Greater campaign flexibility 29% 42% Better campaign reporting 34% 47% 58% 48% Faster campaign set up and go live

18 CURRENT ADOPTION & STRATEGIES

19 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.

20 CLEAR EVOLUTION OF ADVERTISER PROGRAMMATIC STRATYEGY AS MARKETS MATURE Outsourced to an independent trading desk New markets, 11%; Middevelopments markets ; Advanced markets Outsourced to a DSP New markets, ; Middevelopments markets 6%; Advanced markets Outsourced to an agency New markets, 63%; Middevelopments markets 83%; Advanced markets 5 Outsourced to an agency Hybrid (a combination of any of the aforementioned strategies) New markets, 11%; Middevelopments markets 6%; Advanced markets 4 In-house New markets, 16%; Middevelopments markets ; Advanced markets 1 Markets new to programmatic Advanced programmatic markets

21 OPERATIONAL MODELS - ADVERTISERS % % 63% 64% 67% % Outsourced to an agency 3% 11% 1% Outsourced to an independent trading desk 9% 16% 16% 16% 14% 11% 21% Outsourced to a DSP In-house operations Hybrid model (more than one of the above) Total CEE NE WE SE

22 OPERATIONAL MODELS - AGENCIES % 57% 53% 48% 48% % 27% 24% 21% 21% 22% 19% 2 11% 14% 14% 12% 11% 4% 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

23 OPERATIONAL MODELS ARE CHANGING IAB Europe wanted to understand whether those stakeholders who do not currently have an in-house model are considering 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 migrate away from I/O media buying. Advertisers continue to rely on their agencies; three quarters of advertisers who do not currently have an in-house model are not considering one, this has increased from 54% in Interestingly though, those that are considering in-house are most likely doing so to reduce agency costs. However in-house is more likely to be considered by advertisers in advanced markets; 67% of advertisers in advanced markets are considering an in-house model but only 12% of those in markets new to programmatic share this view.

24 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

25 MEASUREMENT AND DATA STRATEGY

26 PROGRAMMATIC IS A KEY ELEMENT OF MEDIA PLANNING The majority 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. 75% 7 Advertisers Agencies use the same success metrics for programmatically traded display campaigns as those traded non-programmatically

27 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 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.

28 KEY ADVERTISING METRICS - ADVERTISERS % % 11% 7% Advertising recall 5 43% 33% 37% 36% 33% Brand awareness 16% 11% Brand familiarity 37% 33% 29% 21% 22% 14% 14% 16% 11% 1 11% 11% 6% 5% Brand affinity Purchase intent Likelihood to recommend Becoming a fan or follower 6 58% 57% Click on advertisement 41% 11% % Individuals interaction with content or ads (like / sharing / commenting / creating social buzz) 14% 21% 22% 5% 6% 14% Synergies of Touch screen multi-screening metrics such as pinch, swipe, expand 5 37% 37% 36% 56% Uplift in direct site visits 21% 17% 11% 33% Uplift in search behaviours Total CEE NE WE SE

29 KEY ADVERTISING METRICS - AGENCIES % % 29% 28% 29% 18% 59% 56% 51% 46% 45% 18% 12% 13% 1 9% 5 29% 28% 27% 2 59% 55% 51% 47% 39% 27% 22% 16% 18% 1 12% 14% 9% 9% 1 67% 62% 64% 63% 64% 45% 32% 32% 32% 29% 31% 26% 27% 17% 9% 27% 23% 11% 1 7% 51% 44% 37% 18% 3 25% 27% 23% 18% 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 Touch screen multi-screening metrics such as pinch, swipe, expand Uplift in direct site visits Uplift in search behaviours Total CEE NE WE SE

30 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.

31 AUDIENCE DATA USED BY ADVERTISERS First party data 56% 71% 79% 89% 10 Second party data 11% 43% 42% 5 5 Third party data 26% 44% 43% 56% None 5% 7% 11% Total CEE SE WE NE

32 AUDIENCE DATA USED BY AGENCIES First party data 55% 7 68% 73% 82% Second party data 42% 48% % Third party data 58% 64% 69% 83% 91% None 6% 11% Total CEE SE WE NE

33 FUTURE OF PROGRAMMATIC

34 INVESTMENT IN PROGRAMMATIC IS SET TO CONTINUE TO INCREASE 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 9 of all stakeholders cite an increase in the next 12 months. Advertisers Agencies 94% 97% CEE 10 NE 10 WE 79% SE 88% CEE 96% NE 10 WE 10 SE 10 Percentage of stakeholders that cite an increase in programmatic over the next 12 months

35 IAB Europe is the voice of digital business and the leading European-level industry association for the digital advertising ecosystem.

36 THANK YOU For more information on the Attitudes to Programmatic Advertising Research please contact /iab-europe