THE PROGRAMMATIC ECONOMY
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1 THE PROGRAMMATIC ECONOMY Publisher views and attitudes towards programmatic advertising in the Netherlands Key findings from a qualitative-based FaR Partners study commissioned by Improve Digital April 2014 Commissioned by All rights reserved
2 FOREWORD Across Europe, and indeed worldwide, the digital advertising market is rapidly becoming more automated, more data driven and interconnected. The Netherlands has been at the forefront of this change, and is currently one of the most developed countries in the world in terms of programmatic adoption. But what are the current attitudes of publishers towards this opportunity and what are the barriers to doing things differently? Are they adapting and if so how? Improve Digital asked media consultancy FaR Partners to conduct a qualitative based research study in the Netherlands to provide a market wide view of Programmatic Buying and Real Time Advertising trading from a publisher point of view, as we feel it s incredibly important to understand the views of our customers and the market as a whole. FaR Partners conducted the qualitative research through their publisher panels. Market benchmarks and insights are aggregated, evaluated and summarised in this report. We hope that you find the results of this survey informative, and thanks again to the main Dutch publishers who took the time to participate. We look forward to your participation in the future. Joelle Frijters CEO Improve Digital
3 STUDY METHODOLOGY Panel The FaR publisher panel was developed in conjunction with Improve Digital and is comprised of major publishers across all of the representative sectors in the Dutch market. The publisher panel came from a representative sample across key verticals such as print publishers, sales networks, telco s, broadcast and utility sites. Their feedback is gathered via face to face interviews and through online surveys. Panel questions combine both quantitative and qualitative approaches in order to deliver market benchmarks and insights. When aggregated, these deliver a clear representation of the market overview, or attitudes to a particular area or discipline. Interview Setting Thestudyiscomprisedoffacetofaceinterviews as the topic is both complex in nature and is yet to have firmly established standards and market terminology. All interviews were conducted confidentially to ensure the panellists felt comfortable and were transparent with their feedback, viewpoint and approach. The results were then aggregated in order to provide a market wide view. This approach has enabled FaR to deliver a relevant study that provides a unique insight into the current state and attitudes towards programmatic in the Dutch market, from the publisher perspective.
4 EXECUTIVE SUMMARY The Dutch market shows very high use of programmatic advertising and is advanced and confident that programmatic will continue to grow as an important part of the publishers strategy. In order for programmatic to grow there needs to be technical capabilities in SSPs to sell a wider variety of High Impact Formats, as well as video and mobile. All publishers require control which can be achieved by transparent reporting, bid management tools and Private Marketplaces (PMPs). Cost savings, ease of technical integration and sales/tech support are important parts of the SSP offering, alongside revenue and yield. Some publishers feel wary of programmatic and need to learn how to use it for their particular purposes education piece about higher yield opportunities within programmatic needed to access these accounts. Data is currently being appended by half of the market, but only very basic demographic data. Further focus on complex data use is needed to create a bigger scale of programmatic.
5 PROGRAMMATIC ADVERTISING IS KEY PART OF STRATEGY The Dutch market has embraced programmatic advertising, both in adoption and in terms of its attitudes, more so than anywhere else in Europe. Currently 89% of the panel sell between 51% and 100% of their inventory programmatically, which is extremely high. Programmatic is very much seen as strategic in the Dutch market, even those who see it as tactical predict that it will become strategic for them in the near future. The vast majority still do some direct sales, but there is an emergence of a purely programmatic element, with SSPs and Hybrid solutions the most common in the market at the moment. The fact that programmatic is efficient, and everybody benefits from it is what s driving the market. For us it s easier to run our sales operation, for buyers it s easier to buy impressions. It s both cost and time efficient, everybody should be getting the right prices. Trading Manager, Online Publisher The vast majority of publishers still do some direct sales, but there is an emergence of a purely programmatic element 100% It s more of a technical issue than strategic, for example, we can t sell the homepage programmatically. Head of Automated Trading, Publisher 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Split between direct sell/programmatic Complete programmatic management of all sales It s not a tool to monetise remnant anymore, it s an integral part of our total sales strategy. Digital Trading Director, Publisher
6 KEY DRIVERS ARE STANDARD AND HIGH IMPACT FORMATS The Dutch market is mature to the extent that the majority of panellists stated that they sell all digital inventory, as opposed to merely nonguaranteed inventory, programmatically. Inventory from all our sites as well as large partner networks is sold programmatically. Head of Digital Trading, Digital Network Unlike other less mature markets, some High Impact Formats are sold programmatically as commonly as standard formats in the Netherlands. Video, mobile and tablet are also catching up. What inventory is currently selected for programmatic? Guaranteed 78% Non- Guaranteed 22% Which types of digital inventory do you sell programmatically? Where possible we ve integrated rich media. Not all formats are sold programmatically yet, mainly billboards, but we re working on it. Trading Director, Publisher 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% I see programmatic as a way of buying, not specific to particular formats. Trading Manager, Publisher 0% Standard display High impact display Video Mobile Tablet
7 NEED FOR FOCUS ON COMPLEX DATA CAPABILITIES Data is another big focus as 56% append it to their programmatic sell now, but a further 33% are collecting data and expect to append it in the future. We ve started looking into data capabilities, sometimes advertisers will approach us about it and if they pay more we ll do it, but we haven t been proactive in it. Trading Director, Publisher Currently the majority of publishers only append basic data including age, gender and sociodemographic. In order to charge higher prices, publishers and SSPs need to focus on appending more complex demographic data to their sells, selling more high impact formats and being totally transparent in their bid reporting to encourage confidence. The market needs to increase kinds of data used in this way, and develop data capabilities to help publishers collect and use it more easily. What data is currently added to your programmatic inventory? AGE INTEREST 3% INTENT 18% GENDER 24% 28% SOCIO DEMOGRAPHIC 21% RETARGETING 6% We append limited audience information, basically just basic demographic data. Head of Automated Trading, Publisher
8 FURTHER EDUCATION IN THE MARKET IS NEEDED Smaller publishers, and those with a more traditional media background, are behind in taking up programmatic because of lack of resources and understanding. As a newspaper it s been hard for us to adjust, so we need the help. We don t have the resources to bring it in-house because our sales team is small, but that s the same reason why we will eventually benefit from it: we won t need a huge sales team if we re trading programmatically. Digital Trading Manager, Publisher In order to improve programmatic adoption within publishers, the market needs more programmatic education in order to make decisions. The smaller companies need guidance as they adopt programmatic strategically, and the larger companies need mass education. The elements holding the market back are the publisher s fear of cannibalisation as well as lack of skill in both the buy and sell side. However, the market expects these will be naturally overcome as the market further matures. What's lacking within your organisation to adopt programmatic in an optimal manner? It s mainly just skills and knowledge about how we can best implement it for our publishers. Publisher, Publisher Resource was always the problem until recently. The main problem now is that the company is large and the masses, including most sales people, still don t really understand it. Head of Digital Trading, Digital Network
9 DESIRE TO MANAGE PROGRAMMATIC IN HOUSE The vast majority of publishers in the Netherlands (89%) have a desire to manage their programmatic strategies in house, because control is extremely important to them. This also suggests a high level of confidence and skills in the market. The key features Dutch publishers require, including Private Exchange capabilities and Bid Management tools, amount to a high level of control hence the strong desire to bring management of programmatic in house. Technical integration and support rank alongside revenue and yield upside as key factors in choosing a programmatic partner. We do everything in-house, it was never even a choice to do otherwise. We want the most control over our own network. Digital Trading Director, Publisher Transparency is key, and a proactive way of working with new products like private dealing rooms. MD, Specialist Digital Network What are the key SSP features that you require? Rank 1 2 Features Private exchange capability Bid management tools 3 Bid reporting 4 5 Brand protection tools Interface ease of use Relative importance of the reasons to work with a programmatic partner Rank Reasons 1 Revenue 2 Ease of technical integration 3 Yield upside 4 Technical/ Sales support 5 Product features What s most important are the technical integrations they facilitate. Support is also key. We re very proactive and we ask a lot of questions so we need proactive help and support to find the correct solutions. MD, Specialist Digital Network 6 Data plug in 6 Cost
10 FUTURE: PROGRAMMATIC TRADING ON ALL SCREENS The Dutch market is advanced and confident that programmatic will continue to grow. Over a third of panellists currently get over half of their revenue from programmatic trading, and three quartersexpectthesametobetruein12months time.thisreflectsmaturityinthemarketnow,and confidence in its future. Furthermore, there is expectation among publishers that the vast majority of standard formats will be sold programmatically within five years, and that expectation is almost as high for High Impact Formats. Interestingly the market also expects very high proportions of their mobile, tablet and video to be sold programmatically within five years, although they are not at that point yet. In five years our sales force will be more like a marketing agency working with brands on bigger partnerships. Everything else will be RTB Digital Trading Director, Publisher In order for it to grow there needs to be technical capabilities in SSPs to sell a wider variety of High Impact Formats, as well as video, mobile and tablet. It s hard to predict video but if it works like standard and HIF formats it should reach high levels in 5 years time. Digital Trading Director, Publisher Percentage of your company's digital media being traded programmatically in 5 years time 87% 86% 86% 85% 85% 84% 84% 83% 83% 82% Everyone s talking about mobile but no one has come up with a business model for it yet. There are yield, targeting and reporting issues. We ve got to crack it because lots of publishers are seeing their inventory disappear onto mobile. MD, Digital Network 82% Mobile Tablet Video
11 ELEMENTS NEEDED FOR FURTHER MARKET DEVELOPMENT Increased mobile and video tech and capabilities within SSPs. More High Impact Formats available through programmatic. Further market education needed, especially within less advanced publishers. Strategy using more complex data is needed to increase the amount and types of data appended to programmatic sales. Transparent reporting and more advanced bid tools to drive yield and a sense of control for publishers. Media agencies and sales houses see challenges around users privacy. Agencies will need to get used to new workflows, and acquire new skills and people. Trading Manager, Publisher Everyone s talking about mobile but no one s come up with a business model for it yet. There are yield, targeting and reporting issues. We ve got to crack it because lots of publishers are seeing their inventory disappear onto mobile. MD, Digital Network
12 ABOUT IMPROVE DIGITAL ABOUT FAR PARTNERS Improve Digital is Europe s leading real time supply side platform. Founded in 2008, and now part of PubliGroupe, Improve Digital focuses on providing premium publishers with the technology and tools set to monetise their inventory and audiences in a programmatic fashion. With local teams located in NL, UK, DE and ES, ImproveDigitalpowerstherealtimeadvertising revenue for over 100 publishers. Improve Digital offers integrated audience and data solutions, yield management and optimisation, full pricing control, data protection, and Private Market Place access to all major DSPs and agency trading desks. FaR Partners is a commercial consultancy for media companies operating on the sell side. FaR provides unique client benchmarks and market wide studies that help enable FaR to optimise a clients media assets and also to develop new revenue streams in market. Founded in 2007 FaR helps clients across Europe build digital media businesses, assess and benchmark media markets and formulate the commercial and business plans that help clients to grow their operation. For further information please contact: Angela Pellaupessy Key Account Manager a.pellaupessy@improvedigital.com Bastiaan Spaans VP Business Development b.spaans@improvedigital.com
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