IAB report on Programmatic Trading The Netherlands 2012

IAB report on Programmatic Trading
The Netherlands 2012 - 2013
March 2014
Introduction and
summary
IAB report on Programmatic trading The Netherlands 2012 - 2013
2
Introduction
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.
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.
IAB report on Programmatic trading The Netherlands 2012 - 2013
Roel van Rijsewijk
Deloitte | Deloitte Digital
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.
3
Our methodology
Collection
Estimation
Conversation
Deloitte collects data coveringa representative sample of the market
Missing participants’ data estimated based on previous figures, desk research,
expert opinions, industry databases and mathematical modeling
Initial findings verified with industry experts, media buyers, and selected publishers
Validation
Final findings cross-referenced and validated with respondents
Publication
Final findings presented to the IAB and industry participants
IAB report on Programmatic trading The Netherlands 2012 - 2013
Survey methodology
• Our current programmatic
survey is based on 16
participating companies
• Figures are adjusted for
double counting, based on
information provided by
the survey participants
• The figures are drawn up
on the basis of company
declarations and have not
been verified by Deloitte
4
Executive summary
Programmatic traded display advertising represents a
market of 103mEUR in the Netherlands in 2013.
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.
Mobile inventory grows fast in
programmatic exchanges; mobile website
and in-app advertising grows to a 12%
share of programmatic display revenue.
IAB report on Programmatic trading The Netherlands 2012 - 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.
5
Results
IAB report on Programmatic trading The Netherlands 2012 - 2013
6
Programmatic spend
Online display advertising revenue for programmatic grows with +35.5% in 2013
Programmatic traded Display revenue (m€)
+35.5%
103
76
H2
42
+45.2%
H2
61
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
H1
34
+23.5%
2012
H1
42
2013
“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 Hoogendijk
The Media Exchange | CEO
Note: Figure excludes search and classifieds, directories & listings; figure includes estimate revenue
from Facebook Exchange and Ad Echange.
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
7
Programmatic spend per exchange method
RTB is most used as programmatic method in the Netherlands; programmatic spend
shows similar seasonality as the total online display market
Programmatic revenue RTB and Non-RTB (m€)
15
15
14
10
10
10
8
7
6
5
5
5
Feb
Mar
Apr
5
6
8
7
7
6
6
8
8
7
6
RTB
96% Open Auction,
4% Private Auction
8
7
6
5
Non-RTB (Fixed Price)
99% Unreserved inventory,
1% Reserved inventory
0
Dec
Nov
Oct
Sept
Aug
July
H1 2013: 42m€
June
May
Apr
Mar
Feb
Jan
H2 2012: 42m€
Dec
Nov
Oct
Sept
Aug
July
June
May
Jan
H1 2012: 34m€
H2 2013: 61m€
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
8
Programmatic volumes
Volume of programmatic sold inventory has increased with 10% in 2013
Programmatic traded impressions per month (Billions)
20
12
13
12
13
12
13
13
July
11
13
14
June
10
13
15
15
Apr
11
13
14
Mar
11
13
14
Feb
15
14
15
14
13
10
5
0
Dec
Nov
Oct
Sept
Aug
May
Jan
Dec
Nov
Oct
Sept
Aug
July
June
May
Apr
Mar
Feb
Jan
2012: 148 Billion
2013: 163 Billion
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
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Price development RTB and Non-RTB
Average eCPM prices for RTB are higher than non-RTB and increasing in share of
revenue.
0.69
0.45
0.58
0.58
0.58
0.52
0.49
0.45
eCPM
23%
31%
Share of
revenue
H2 2012
H1 2012
69%
RTB
22%
24%
H1 2013
77%
H2 2013
76%
78%
Non-RTB
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
10
Manual vs programmatic
Programmatic advertising increases share in the display market; figure excludes
Google and Facebook
40
40%
30
30%
20
20%
10
10%
0
0%
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
Share programmatic
Display advertising spend (m€)
Display advertising spend split into Manual and Programmatic trade
2013
Programmatic
Manual
Share Programmatic
Source: Survey respondents, Ad spend 2013, Deloitte analysis,
IAB report on Programmatic trading The Netherlands 2012 - 2013
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Programmatic formats
Embedded is most popular format in programmatic. Video, interruptive and textlinks
gain share in 2013.
Programmatic display
1%
6%
9%
Total display market
2%
7%
12%
14%
Video
16%
Interruptive
7%
Textlinks
57%
53%
Embedded
10%
10%
Other
2012
2013
11%
11%
10%
84%
2012
80%
2013
"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 Verkoost
De Persgroep | Chief Digital Officer
Note: Embedded formats (banners, buttons, skyscrapers etc), Interruptive formats (rich media, over the page, page take-over etc), Tekstlinks (incl. AdSense), Video (pre-/mid-/ postroll) and Other uncategorized display advertising
Source: Survey respondents, Ad spend 2013, Deloitte analysis,
IAB report on Programmatic trading The Netherlands 2012 - 2013
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Programmatic media
The share of programmatic traded Mobile & In-app advertising has increased
significantly in 2013
"Mobile automated trading has the unique position of using GEO data to target on
audiences, 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
standardized unique ID's and in 2014 mobile automated trading will reach its full
potential" Formats share of revenue (%)
1%
3%
6% 6%
Mediums
2012
Mediums
2013
96%
Website/browser
Diederick Ubels
Mobile Professionals | Co-Founder & General Manager
Mobile
88%
In-app
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
13
Performance vs Branding
Buyers indicate that programmatic has been increasingly used for branding campaigns
in 2013
Campaign marketing objective
1%
1%
8%
16%
Buyers
91%
83%
1%
58%
Performance
37%
61%
2012
Branding
Gerard Moussault
Mediabrands | Head of Cadreon
2%
41%
Sellers
"Insights and real time optimisation
is a striking feature of programmatic
branding, delivering our advertisers
maximum relevance and on target
advertising"
2013
Undisclosed
Note: Analysis is based on a limited number of data points
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
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Programmatic revenue vs eCPM prices
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 price development
Programmatic revenue vs eCPM Prices
Programmatic revenue per month (m€)
20
average eCPM
1.50
1.00
0.50
-
15
10
5
0
Dec
Nov
Oct
Sept
Aug
July
June
May
Apr
Mar
Feb
Jan
0.50
1.00
1.50
average eCPM
2012
IAB report on Programmatic trading The Netherlands 2012 - 2013
-
2013
15
Data enrichment
Respondents indicate that for most impressions no data is used
“We see more campaigns starting with
target group analysis which results
in employing only the most effective
data segments to reach the specified
audience. This trend optimizes ROI and
goes hand in hand with more overall
investments in analytic capacity. “
Share of Programmatic impressions enriched by data in 2013
Eelco Boers
Mark&Mini | Managing partner
First party data
42%
Second party data*
7%
Third party data
1%
*Second party data is first party data directly from the source (publisher).
Note: Analysis is based on a limited number of data points
Source: Survey respondents, Deloitte analysis
IAB report on Programmatic trading The Netherlands 2012 - 2013
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List of participants
Respondents
1 IAB report on Programmatic trading The Netherlands 2012 - 2013
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Definitions
Programmatic
Programmatic is a holistic approach through which media buyers and sellers may
align organizational processes with automation technology in support of ongoing,
channel-agnostic customer engagement.
Types of programmatic transactions
Within 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”
In an Open Auction a publisher will generally allow any and all buyers to participate
in 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
advertisers from gaining access. On the advertiser side they are often unaware of
what 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
Open Auction on a blind basis.
“Private Auction”
This auction type is very similar to an Open Auction except a publisher restricts
participation to select buyers/advertisers via Whitelist/Blocklist. A publisher may
choose to not participate in an Open Auction and only run a Private Auction. It is
important 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-RTB
Impressions are pre-negotiated and pre-sold in one package deal. On availability,
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
from a traditional direct sale is the automation of the RFP and campaign trafficking
process. 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
have pre-negotiated, fixed pricing (CPM, CPC, etc.) Typically, Unreserved Fixed Rate
deals sit at a higher priority than the Open and/or Invitation-Only Auction. A deal
of 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
IAB report on Programmatic trading The Netherlands 2012 - 2013
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Methodology
Programmatic market
• 16 companies reported their data based on the questionnaire
• The figures are drawn up on the basis of site declaration and have not been
verified
• Wherever needed we have used tools such as regression analysis to make
estimations regarding issues like total advertising spend
• Based on the information provided by survey participants, figures have been
adjusted for double counting
• Due to limited availability of company data we had to estimate the market size
for sold inventory on DoubleClick Ad Exchange and Facebook Exchange based
on market data, media agencies and programmatic inventory buyers feedback
• Google regulations forbid commenting on our market estimates
IAB report on Programmatic trading The Netherlands 2012 - 2013
19
Contact details
For questions concerning this research feel free to contact:
Roel van Rijsewijk
Deloitte | Deloitte Digital
Tel:
+31 (0)6 52 615 087
Email:[email protected]
Nathalie la Verge
IAB Nederland
Tel:
+31 (0)85 401 0802
Email:[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. Roel leads one of
Deloitte’s main innovation projects on ethics and trust in a digital world
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
Jorrit Sloot
Deloitte | Deloitte Risk Services
Tel:
+31 (0)6 82 019 387
Email:[email protected]
Jorrit Sloot is a data analyst within the Deloitte Risk Services practice and specialized
in datamodelling and mathematical, quantitative data analyses.
IAB report on Programmatic trading The Netherlands 2012 - 2013
20
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