“The minute anything works in tech….it’s a bubble.” Sound familiar? If you read this month’s Financial Times, you might have recognized this quote from a recent interview with tech pioneer (and AppNexus investor) Marc Andreesen. If you’re in Europe, this quote might also characterize how the programmatic advertising market has been seen across Europe for the past several years. However, it seems we might be finally turning a corner.
2014 saw the penetration of programmatic in markets such as the Netherlands and the UK reach a tipping point. This shift means that programmatic can no longer be perceived as merely a channel, something that can be tested, an activity that can be outsourced, or discussed only inside the board rooms of the large media players across the continent.
Let’s take the UK — one of the largest digital display markets in Europe — as an example: eMarketer recently reported that 2014 saw over $1 billion of programmatic spend, a figure forecast to grow by over 30% into 2015. In the Netherlands – another European leader — programmatic accounts for over 50% of all display!
Europe has always been a patchwork of individual markets, each with its own nuances and quirks, defined by social-economic forces and historical cultural reference points. Each market has embraced programmatic for different reasons – be it commercial opportunity, the ability to innovate and push the envelope, or the functional benefits of increased operational efficiency. There are parts of Europe that will emerge as global leaders in certain areas, such as the mobile landscape in Scandinavia, where geography and seasonal weather conditions have led to one of the most advanced mobile markets anywhere in the world.
AppNexus is fortunate to empower market-leading companies in all of the established and emerging markets across Europe. We will be looking to learn from our partners – about their businesses, competitive environments, and opportunities to innovate and differentiate — and move into 2015 alongside them as their businesses evolve. 2015 will continue to see growth in display advertising all across Europe, and as such we expect businesses to be investing in their internal resources and technical capabilities. This growth and investment promises that 2015 will be another exciting challenge and opportunity for everyone in the region.
Here’s what I see as the major 2015 trends influencing the European programmatic industry:
- Advertiser level participation – There still exists a knowledge gap between the agency and the advertiser. Advertisers want to participate, and growth relies on their grasp of the concepts and opportunities.
- Cross-device – As the mobile opportunity begins to define itself, there is no doubt that consumer behaviour and advertiser demand points to this being a huge growth opportunity.
- Disruption of TV budgets by connected devices – fragmentation of viewing continues (in Sweden in 2014, TV viewing actually declined for the first time ever!) We all need to learn more about where this goes, but 2015 will provide disruption here for sure.
- The rise of the German programmatic market – Germany is still the largest ad-market in Europe (although digital accounts for around 30%), and so far has approached programmatic with a degree of trepidation. The market appears to have learnt a great deal in 2014, and looks ready to step out.
- Privacy legislation/directives – a hot topic in Brussels, and of course a very critical topic for digital advertising overall. We expect guidelines to emerge this year which will help us to shape the direction the European markets will take.