Algorithms take over the European advertising sector. Programmatic with a 30% growth rate.
The good old days, when companies bought online banners themselves, are "a thing of the past." Today, Programmatic rules, i.e., automated purchasing of advertising space online. This media buying model is developing dynamically in the American and European online advertising market. In its September report, IAB Europe estimates that the programmatic advertising market on the Old Continent is worth over EUR 16 billion. As analysts point out, companies were not frightened by GDPR, thanks to which the result achieved was as much as 33% higher than in 2017.
“Many specialists feared that GDPR would limit the development of the intelligent online advertising market. The new regulations were formulated in a generic way, so market participants had to work out the method of their implementation on their own. This, of course, involved temporary perturbations, but they did not inhibit the dynamically developing market.”- comments Piotr Prajsnar, CEO of Cloud Technologies, specializing in Big Data marketing and data analysis.
As the latest report prepared by IAB specialists shows, the concerns of industry experts were justified, but premature. Data from the European Internet Industry Employers Association’s compilation show that the value of the European programmatic market increased by as much as 33%, reaching EUR 16.7 billion in 2018.
If a banner, then only programmatic
If a banner, then only programmatic
A precise analysis of the report provides interesting information about how Europeans buy advertising space online. It turns out that 70% of display ads are purchased in the programmatic model. This means that only every fourth marketer buys ads in a conventional way.
Does such attachment to tradition have its advantages?
“The rules of the game are changing. Not only are regulations evolving, but so are technologies and society’s attitude. Today’s audience is not the same person as just a few years ago. The avalanche of ads that have appeared online has made our audiences develop what is called banner blindness. Today, in order to reach the audience precisely with a message, marketers are increasingly basing their strategies on data analysis, which is also the foundation of advertising carried out in the programmatic model”- replies the President of Cloud Technologies.
A land of eternal growth
A land of eternal growth
It is pleasing that most stakeholders participating in the IAB Europe study expect growth in programmatic investment of as much as 80% over the next 12 months. What is driving such optimistic forecasts?
“The key arguments are effectiveness, the ability to optimize campaigns, and better control over budget use. It is also transparency, and advertisers are increasingly opting for direct access to media buying platforms” - comments Maciej Sawa, CEO, OnAudience.com from the Cloud Technologies group, which owns one of the world’s largest wholesalers of anonymous data on internet users’ interests.
Marketers around the world are increasingly using programmatic, which is powered by artificial intelligence, to use collected data and deliver more relevant, personalized experiences to their customers. According to the latest Adobe report, as many as 89% of companies realize that personalization is the key to success. Moreover - only 31% of them currently provide the level of personalization they consider necessary. Research also shows that 56% of respondents are unable to process data fast enough, and 51% have problems with organizing, structuring, and integrating data.
IAB estimates coincide with a recent publication by P. G. Zenith, which forecasts that globally 67% of display ads will be carried out this year in the programmatic model, reaching an estimated USD 84.9 billion. The market is constantly developing, and in the case of programmatic sales, AI conducts a kind of dialogue with the audience that is precise and adequate to its expectations.
Summary
The European programmatic advertising market reached a value of EUR 16.7 billion in 2018, growing by 33% year on year, which shows that concerns about the negative impact of GDPR on automated purchasing of advertising space turned out to be premature. As much as 70% of display ads in Europe are already bought in the programmatic model, and industry specialists forecast further growth in investment of as much as 80% over the next 12 months.
An interesting fact is that according to the Adobe report, as many as 89% of companies consider personalization the key to success, but only 31% of them provide its desired level. Global estimates by P. G. Zenith indicate that this year programmatic will already account for 67% of display ads worldwide, which highlights the growing role of artificial intelligence in precisely reaching audiences.
