Programmatic trends: video a key driver for growth

Despite the pandemic, programmatic investments have remained stable in Europe as transparency improves, says new research. 

According to a new piece of research, 80 percent of buy- and sell-side stakeholders are predicting an increase in programmatic investment revenues over the next 12 months. The findings appear in the annual study by IAB Europe, the leading European-level industry association for the digital marketing and advertising ecosystem, entitled ‘Attitudes to Programmatic Advertising 2021 Study’

Now in its seventh year, the study has become an industry benchmark of how programmatic advertising attitudes, adoption and strategies are evolving. The responses came from almost 300 advertisers, agencies, publishers and ad tech vendors in 31 markets. More than three quarters of the respondents, who have both pan-European and Global remits, manage annual advertising budgets of €1m or above.

Despite the global COVID-19 pandemic, programmatic advertising investments remained fairly stable, according to the research, with growth occurring in areas such as programmatic video. In programmatic video, Connected TV (CTV) remains key to further investment spurred on by shifting consumer viewing habits. In 2021, 19 percent of advertisers allocated between 21 to 40 percent of their programmatic trading budget in connected TV. 

Greater control for sales teams

Commenting on the growth of CTV, Lisa Kalyuzhny, RVP, Advertiser Solutions, EMEA, PubMatic said: “A lot of CTV transactions occur within curated private marketplaces (PMPs). These premium, private, curated environments give publisher sales teams greater control as to how they structure deals and provide buyers with the assurance that their campaigns are running against brand-safe content. 

“Furthermore, PMP deals give marketers and publishers the opportunity to see the true value exchange for their investment,” she continued, “and tailor their programmatic strategy and partnership to meet campaign and business goals.”

In terms of investment drivers, ‘better use of data’ still prevails as a key accelerator across both the buy and sell-side for all stakeholders.

Spend is shifting to programmatic

Anita Caras, Research Director EMEA, Yahoo!, had this to say: “This data underlines that marketing spend is now predominantly shifting to programmatic as many more channels open up to automated, digital forms of advertising. Marketers simply want to know their budgets are being used effectively to positively shift consumers' perceptions of a brand and to drive sales, regardless of whether they buy media programmatically or non-programmatically.”

She continued: “The changes to ways of buying, creative formats as well as the data used to target and measure campaigns, means programmatic is no longer seen as a way to simply buy long-tail, remnant inventory as it has been in the past." 

Gaining access to premium inventory at scale also saw substantial growth as a driver from 20 percent in 2020 to 50 percent in 2021 amongst advertisers. This would appear to highlight the importance of solutions for advertisers that allow them to connect with mass audiences in premium environments and meet campaign objectives.

Supply chain transparency

Looking at the barriers to programmatic adoption, supply chain transparency dropped as the primary concern for advertisers from 60 percent in 2020 to 25 percent in 2021 suggesting that the industry is making significant paths to enhancing transparency on the buy-side. It is not surprising then that the research highlights an increase in the adoption of standards such as App ads.txt, Sellers.json, Buyers.json, Supply Path Object, Demand Path Object, among both agencies and advertisers.  Advertisers are now more concerned about identifying the financial benefits of programmatic, with 46 percent stating that understanding the impact of programmatic trading on total revenue represented a significant barrier.

Commenting on the value of the research and the action being taken to overcome barriers to programmatic investment, David Goddard, VP Business Development, DoubleVerify and Chair, IAB Europe Programmatic Trading Committee, said: “The IAB Europe Attitudes to Programmatic study provides critical insight into the key concerns, opportunities and overall direction of programmatic advertising across Europe. 

“It enables the Programmatic Trading Committee, and the wider industry, to devise strategies based on insight from advertisers, agencies, publishers and ad tech vendors,” he continued. “This year, it is encouraging to see that action has been taken, and, amongst buy-side stakeholders, the concern around supply chain transparency has decreased while the adoption of key industry standards has increased.”  

Brand safety is a barrier to investment

Goddard concluded: “There are still clear concerns, however, that need to be addressed – especially the steep rise in brand safety as a barrier to investment – which highlights that all stakeholders need to continue to collaborate to make our ecosystem stronger, safer and more secure.”

When it comes to the topic of in-housing, the trend saw some decline in 2020 but is back and on the rise again in 2021; 50 percent of advertisers stated they have an in-house model for programmatic trading compared to 20 percent in 2020. This was 68 percent for agencies compared to 50 percent in 2020. This is mainly driven by the desire for increased control of operations, first-party data management and greater transparency on where campaigns run.

The last 18 months have certainly been challenging for the advertising industry. But in spite of that and as the economy recovers, more than 80 percent of all stakeholders predict an increase in their programmatic investments/revenues over the next 12 months.