IAB report on Programmatic Trading The Netherlands 2012 - 2013€¦ · and in-app advertising grows to a 12% share of programmatic display revenue. Embedded is by far the most traded

IAB report on Programmatic Trading The Netherlands 2012 - 2013

March 2014

IAB report on Programmatic trading The Netherlands 2012 - 2013 2

Introduction and summary


With input from Publishers, Trading Desks, Ad Networks, Platform Solutions, Data Providers and Agencies, this study will focus on the latest programmatic trends within the Dutch online advertising ecosystem.

Worldwide the Netherlands is one of the most developed countries in which online advertising is traded via automated channels. The shift from traditional/manual trading to programmatic brings new business opportunities and the need for adjusted strategies. For this rapidly changing market IAB Netherlands & Deloitte presents it's first Programmatic Trading study.

Introduction

We are proud to present the first programmatic study in the Netherlands. Thanks to the participation of the main Dutch players in the programmatic ecosystem from both sell side and buy side and the support of the IAB Automated Trading Taskforce, we were able to collect valuable insights on spend, volumes,prices, campaign objectives and data enrichment.

Roel van RijsewijkDeloitte | Deloitte Digital


Our methodology

Publication

Estimation

Conversation

Validation

Collection

Missing participants’ data estimated based on previous figures, desk research, expert opinions, industry databases and mathematical modeling

Deloitte collects data coveringa representative sample of the market

Final findings cross-referenced and validated with respondents

Final findings presented to the IAB and industry participants

Initial findings verified with industry experts, media buyers, and selected publishers

Survey methodology• Ourcurrentprogrammatic

survey is based on 16 participating companies

• Figuresareadjustedfordouble counting, based on information provided by the survey participants

• Thefiguresaredrawnupon the basis of company declarations and have not been verified by Deloitte


Executive summary

Programmatic traded display advertising represents a market of 103mEUR in the Netherlands in 2013.

Programmatic trading has increased with an overall growth rate of +35.5% in 2013 and has shown an impressive +45.2% growth in the second half of 2013.

Prices and volumes of programmatic sold inventory increased in 2013.

Mobile inventory grows fast in programmatic exchanges; mobile website and in-app advertising grows to a 12% share of programmatic display revenue.

Embedded is by far the most traded format in programmatic. However in 2013 we have seen an increase in interruptive and video formats linked to the growth of programmatic branding.


Results


Note:Figureexcludessearchandclassifieds,directories&listings;figureincludesestimaterevenue

fromFacebookExchangeandAdEchange.

Source: Survey respondents, Deloitte analysis

Online display advertising revenue for programmatic grows with +35.5% in 2013

Programmatic spend

The number of impressions sold via programmatic exchanges and platforms has an average of 13 Billion impressions per month between 2012 - 2013. The second half of 2013 shows considerable better growth resulting in a total spend of programmatic of 103 m€ in 2013.

"Looking back at 2013 we can definitely conclude that the programmatic market is maturing in The Netherlands. Higher cpm prices, quality inventory, better knowledge and willingness to experiment within publishers has result in bringing programmatic to the next level."

Boudewijn van Ewijk MediaScience | Co-founder

“Real time programmatic trading is entering the “traditional” offline media. Radio is the first medium where, on a limited scale, this is possible already, television will follow later this year. This means that radio and television can be purchased the same way as online media in the nearby future. A development we believe is irreversible.”

Arthur HoogendijkTheMediaExchange|CEO

H134

H142

H242

H261

2012 2013

Programmatic traded Display revenue (m€)

+23.5%

+45.2%

103

76

+35.5%


RTB is most used as programmatic method in the Netherlands; programmatic spend shows similar seasonality as the total online display market

Programmatic spend per exchange method

H1 2012: 34m€

RTB 96% Open Auction, 4% Private Auction

H2 2012: 42m€ H1 2013: 42m€ H2 2013: 61m€

Non-RTB (Fixed Price) 99% Unreserved inventory, 1% Reserved inventory

0

5

10

15

Programmatic revenue RTB and Non-RTB (m€)

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan

6 6 6 6 6 6

5 5 55

7 7 7 7

8888

7

8

10

14

15

10



Volume of programmatic sold inventory has increased with 10% in 2013

Programmatic volumes

2012: 148 Billion 2013: 163 Billion

11 11 10

11 12 13 13 13 13

13 14 14

15

12 13 12 14 13 13

14 13

15 15 14

0

5

10

15

20

Programmatic traded impressions per month (Billions)

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan



Average eCPM prices for RTB are higher than non-RTB and increasing in share of revenue.

Price development RTB and Non-RTB

0.52 0.58 0.58

0.69

0.45 0.45 0.49

0.58

69%

31%

77%

23%

76%

24%

78%

22%

Share of revenue

eCPM

RTB Non-RTB

H1 2012 H2 2012 H1 2013 H2 2013



Programmatic advertising increases share in the display market; figure excludes Google and Facebook

Manual vs programmatic

Shar

e pr

ogra

mm

atic

Dis

play

adv

ertis

ing

spen

d (m

€)

Display advertising spend split into Manual and Programmatic trade

0%

10%

20%

30%

40%

0

10

20

30

40

Programmatic Manual Share Programmatic

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan

2012 2013

Source: Survey respondents, Ad spend 2013, Deloitte analysis,


Embedded is most popular format in programmatic. Video, interruptive and textlinks gain share in 2013.

Programmatic formats

10% 10%

57% 53%

10% 7%

11% 16%

12% 14%

84% 80%

6% 7%

9% 11%

1% 2%

Programmatic display Total display market

2012 2013 2012 2013

Video

Interruptive

Textlinks

Embedded

Other

"It is surprising how much discussion there still is about the branding effect of online advertising. Yes, brand activation via banner advertising remains complex. In 2013, publishers acknowledged this and acted on it by offering new, innovative propositions, more video and larger interruptive formats. Now the ball is in the court of the advertiser and the creative- and media agencies to increase the digital share of branding campaigns."

Jeroen VerkoostDePersgroep|ChiefDigitalOfficer

Note:Embeddedformats(banners,buttons,skyscrapersetc),Interruptiveformats(richmedia,overthepage,pagetake-overetc),Tekstlinks(incl.AdSense),Video(pre-/mid-/postroll)andOtheruncategorizeddisplayadvertising

Source: Survey respondents, Ad spend 2013, Deloitte analysis,


The share of programmatic traded Mobile & In-app advertising has increased significantly in 2013

Programmatic media

"MobileautomatedtradinghastheuniquepositionofusingGEOdatatotargetonaudiences, context or point of sale. A challenge for mobile RTB is the fragmentation in unique identifiers that make it harder to use the unique set of mobile data in the most efficient way. However more and more publishers and SSP's are using standardizeduniqueID'sandin2014mobileautomatedtradingwillreachitsfullpotential"

Diederick UbelsMobileProfessionals|Co-Founder&GeneralManager

Formats share of revenue (%)

Mediums2013

88%

6% 6%

Mediums2012

96%

3%

1%

In-appMobile Website/browser



Buyers indicate that programmatic has been increasingly used for branding campaigns in 2013

Performance vs Branding

Buyers

Campaign marketing objective

Branding Performance Undisclosed

Sellers

2012 2013

1%

16%

83%

61%

2%

37%

58%

1%

41%

1%

8%

91%

Note: Analysis is based on a limited number of data points


"Insights and real time optimisation is a striking feature of programmatic branding, delivering our advertisers maximum relevance and on target advertising"

Gerard MoussaultMediabrands | Head of Cadreon


Blended eCPM prices in 2013 have been higher for almost all months in respect to 2012 especially near year end when demand is high; total programmatic revenue has been highly correlated to the average eCPM price

Programmatic revenue vs eCPM prices

0

5

10

15

20

- 0.50 1.00 1.50

2013 2012

-

0.50

1.00

1.50

Programmatic price development Programmatic revenue vs eCPM Prices

average eCPM

Prog

ram

mat

ic r

even

ue p

er m

onth

(m€)

aver

age

eCPM

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

Jan


Respondents indicate that for most impressions no data is used

Data enrichment

“We see more campaigns starting with target group analysis which results in employing only the most effective data segments to reach the specified audience.ThistrendoptimizesROIandgoes hand in hand with more overall investments in analytic capacity. “

Eelco Boers Mark&Mini|Managingpartner

Share of Programmatic impressions enriched by data in 2013

First party data

Second party data*

1%

7%

42%

Third party data

*Second party data is first party data directly from the source (publisher).

Note: Analysis is based on a limited number of data points



List of participants Respondents

1


Definitions

Programmatic Programmatic is a holistic approach through which media buyers and sellers may alignorganizationalprocesseswithautomationtechnologyinsupportofongoing,channel-agnostic customer engagement.

Types of programmatic transactionsWithin programmatic we define 2 groups of programmatic transactions through RTB (Real Time Bidding) and Non-RTB.

RTB Available impressions are traded on a instant and individual basis to the highest bidder in an auction. Within the RTB auction model two types of programmatic transactions are defined:

“Open Auction” InanOpenAuctionapublisherwillgenerallyallowanyandallbuyerstoparticipatein accessing their inventory through this tactic. Usually there is no direct relationship with the buyer. Publishers may choose to use Blocklists and floor pricing* to prevent advertisersfromgainingaccess.Ontheadvertisersidetheyareoftenunawareofwhat publisher they are buying on. DSP’s usually present a list of exchanges/SSPs to the buyer that they automatically opt into. Buyers may not know or care that they are buying a publisher’s inventory. Because of this, publishers can participate in the OpenAuctiononablindbasis.

“Private Auction” ThisauctiontypeisverysimilartoanOpenAuctionexceptapublisherrestrictsparticipation to select buyers/advertisers via Whitelist/Blocklist. A publisher may

choosetonotparticipateinanOpenAuctionandonlyrunaPrivateAuction.Itisimportant to note that a Private Auction is an auction and buyers will be expected to bid on inventory. A publisher may choose to expose different information such as transparency or data, through the use of Deal IDs or Line Items to add value to this select group of buyers while participating in this tactic.

Non-RTBImpressionsarepre-negotiatedandpre-soldinonepackagedeal.Onavailability,the impressions are served to the buyer. Within the Non-RTB model two types of programmatic transactions are defined:

“Reserved Fixed Rate” This type of transaction most closely mirrors a traditional digital direct sale. The deal is negotiated directly between buyer and seller, the inventory and pricing are guaranteed, and the campaign runs at the same priority as other direct deals in the ad server. The programmatic element of the transaction that differentiates it fromatraditionaldirectsaleistheautomationoftheRFPandcampaigntraffickingprocess. Negotiation through to fulfillment can be, should the publisher desire, completed within the technology platform providing the automated reserve functionality.

“Unreserved Fixed Rate” Transactions that fall into this category exist within an exchange environment, but havepre-negotiated,fixedpricing(CPM,CPC,etc.)Typically,UnreservedFixedRatedealssitatahigherprioritythantheOpenand/orInvitation-OnlyAuction.Adealof this type typically is necessitated by advertiser demand for a more predictable offering within the exchange space.

*Publishers are able to set a rate below which they are not willing to sell the inventory or exclude certain

buyers. This option is only really relevant for auction based transactions.

Source: IAB Programmatic US, Winterberry group


Methodology

Programmatic market

• 16companiesreportedtheirdatabasedonthequestionnaire• Thefiguresaredrawnuponthebasisofsitedeclarationandhavenotbeen

verified• Whereverneededwehaveusedtoolssuchasregressionanalysistomake

estimations regarding issues like total advertising spend• Basedontheinformationprovidedbysurveyparticipants,figureshavebeen

adjusted for double counting• Duetolimitedavailabilityofcompanydatawehadtoestimatethemarketsize

forsoldinventoryonDoubleClickAdExchangeandFacebookExchangebasedon market data, media agencies and programmatic inventory buyers feedback

• Googleregulationsforbidcommentingonourmarketestimates


Nathalie la VergeIAB NederlandTel: +31 (0)85 401 0802Email: [email protected]

Dutch IAB research includes the IAB / Deloitte Ad Spend Study, all IAB commissioned research and assisting IAB members with their research projects. Also responsible for shaping the IAB knowledge base so that it meets members' needs moving forward

Roel van RijsewijkDeloitte | Deloitte DigitalTel: +31 (0)6 52 615 087Email: [email protected]

Roel van Rijsewijk is a Partner with the Risk Services practice from Deloitte with more than 10 years of experience in risk consulting for companies in the Technology,Media&Telecommunications(TMT)industry.RoelleadsoneofDeloitte’s main innovation projects on ethics and trust in a digital world

Jorrit SlootDeloitte | Deloitte Risk ServicesTel: +31 (0)6 82 019 387Email: [email protected]

JorritSlootisadataanalystwithintheDeloitteRiskServicespracticeandspecializedin datamodelling and mathematical, quantitative data analyses.

Forquestionsconcerningthisresearchfeelfreetocontact:

Contact details

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Documents

IAB report on Programmatic Trading The Netherlands 2012 - 2013€¦ · and in-app advertising grows to a 12% share of programmatic display revenue. Embedded is by far the most traded