IAB Europe Virtual Programmatic Day H2 2018 Slides

1. VIRTUAL
PROGRAMMATIC
DAY
H2 2018
#IABEUVPD 14 November 2018

2. Clementina Piazza
Programmatic Director EMEA,
Integral Ad Science
Welcome

3. #IABEUVPD
Today’s agenda
10.35-11.10 (CET)
09.35-10.10 (GMT)
The Size and Growth of Programmatic in Europe
11.10-11.50 (CET)
10.10-10.50 (GMT)
Attitudes to Programmatic Advertising
11.50-12.05 (CET)
10.50-11.05 (GMT)
Transparency and Trust in Digital Advertising – where are we now?
12.05-12.35 (CET)
11.05-11.35 (GMT)
GDPR 6 Months on – the Impact on the Programmatic Advertising Ecosystem
12.35-12.40 (CET)
11.35-11.40 (GMT)
Summary and close

4. Daniel Knapp
Executive Director TMT
IHS Markit
The Size and Growth of
Programmatic in Europe

5. Advertising spend that is generated through transactional or workflow automation mechanisms embedded in an infrastructure
that relies on a set of rules applied by software and algorithms that draw on data, commonly known as ‘ad tech’. Following the
IAB’s proposed taxonomy, ‘programmatic’ here is an aggregate category that is composed of four discrete transactional models,
each of which we consider a sub-set:
1. Automated Guaranteed
2. Unreserved Fixed Rate
3. Invitation-Only Auction
4. Open Auction.
Advertising spend is recognised as ‘programmatic’ whenever any of those mechanisms applies, irrespective of the inventory
owner’s awareness of their involvement. This means that revenue is also considered programmatic if inventory that is originally
sold to an intermediary through non-programmatic means (e.g. agency bulk buying) is re-sold to an end-buyer
programmatically. Revenue is recognized as programmatic irrespective of whether the inventory owner acts directly or indirectly
via an intermediary.
Market totals and definitions adhere to the IAB Europe Adex Benchmark, our annual study of overall digital ad spend, in order to
ensure like-for-like comparability. All spend is recorded as gross (after discounts, before agency commission).
Data includes spend in Europe both on local/national media owner properties, and on global players like Facebook and Google.
DEFININGPROGRAMMATIC
#IABEUVPD

6. Market coverage
Source: IAB Europe & IHS Markit
• Austria
• Belgium
• Belarus
• Bulgaria
• Czech Republic
• Croatia
• Denmark
• Finland
• France
• Germany
• Greece
• Hungary
• Ireland
• Italy
• Netherlands
• Norway
• Poland
• Russia
• Romania
• Serbia
• Slovakia
• Slovenia
• Spain
• Sweden
• Switzerland
• Turkey
• UK

7. 2,263
3,881
6,607
9,426
11,984
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2013 2014 2015 2016 2017
Europe: Programmatic Ad Spend (€m)
European programmatic advertising is a €12bn market
Source: IAB Europe & IHS Markit

8. Growth still double-digit but slowing as programmatic
rapidly matures
Source: IAB Europe & IHS Markit
71.5% 70.3%
42.7%
27.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2013 2014 2015 2016 2017
Europe: Programmatic Ad Spend YoY Growth

9. Traditional vs programmatic ad spend
Source: IAB Europe & IHS Markit
20.7%
30.8%
44.8%
56.0%
62.0%
79.3%
69.2%
55.2%
44.0%
38.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017
Europe: Digital Ad Spend by Transaction Mechanism
programmatic traditional

10. Programmatic direct attracts the most programmatic spend
Source: IAB Europe & IHS Markit
8.0%
13.8%
22.3%
28.9% 33.0%12.7%
17.0%
22.5%
27.1%
28.9%
79.3%
69.2%
55.2%
44.0%
38.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017
Europe: Digital Ad Spend by Transaction Mechanism - Detail
programmatic direct programmatic indirect non-programmatic

11. Programmatic drives the video ad market in Europe, which is
now programmatic-first
Source: IAB Europe & IHS Markit
236 477
931
2,374
3,907
1,392
1,793
2,204
1,536
1,365
0
1,000
2,000
3,000
4,000
5,000
6,000
2013 2014 2015 2016 2017
Video: Programmatic vs Traditional Ad Spend (€m)
video programmatic video traditional

12. 1/3 of programmatic ad spend is video
Source: IAB Europe & IHS Markit
10.4%
89.6%
2013
video non-video
32.6%
67.4%
2017
video non-video

13. Programmatic video is a €4bn market, growing 4.5x faster
than banner in 2017
Source: IAB Europe & IHS Markit
102.2%
95.3%
155.1%
64.6%67.9% 66.8%
24.2%
14.5%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2014 2015 2016 2017
YoY Growth in Programmatic: Video vs
Banner
video banner
236 477 931
2,374
3,907
2,027
3,404
5,676
7,052
8,077
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2013 2014 2015 2016 2017
Programmatic Spend: Video vs Banner
video banner

14. Programmatic dominates the mobile ad market
Source: IAB Europe & IHS Markit
281 754
2,355
4,422
6,776
1,075
1,582
1,405
1,343
1,356
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2013 2014 2015 2016 2017
Mobile: programmatic vs traditional ad spend(€m)
mobile programmatic mobile traditional

15. Rapid change: more than half of programmatic spend is
now mobile
Source: IAB Europe & IHS Markit
12.4%
87.6%
2013
mobile desktop
56.5%
43.5%
2017
mobile desktop

16. €6.7bn of programmatic spend is mobile, desktop growth
nearly flat
Source: IAB Europe & IHS Markit
168.9%
212.2%
87.8%
53.2%57.7%
36.0%
17.7%
4.1%0%
50%
100%
150%
200%
250%
2014 2015 2016 2017
YoY growth in programmatic: mobile vs
desktop
mobile desktop
281 754
2,355
4,422
6,776
1,982
3,126
4,252
5,004
5,208
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2013 2014 2015 2016 2017
Programmatic spend: mobile vs desktop
mobile desktop

17. Programmatic trends between Western and Central &
Eastern Europe
Source: IAB Europe & IHS Markit
94.5% 92.5% 93.0% 92.5% 90.2%
5.5% 7.5% 7.0% 7.5% 9.8%
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 2017
Share of programmatic by region
WE CEE
24.0%
65.0%
0%
20%
40%
60%
80%
100%
120%
140%
2014 2015 2016 2017
Growth of programmatic by region
WE CEE

18. #IABEUVPD
PANEL The Size and Growth of Programmatic in Europe
MODERATOR
Clementina Piazza
Programmatic Director
EMEA
Integral Ad Science
Daniel Knapp
Executive Director
TMT,
IHS Markit
James Prudhomme
Head of International,
Index Exchange
Joanna Burton
VP European Strategy,
SpotX
Simon Halstead
Chair, IAB Europe
Programmatic Trading
Committee and Head
of Open Demand
International, Oath
Bill Krumperman
Senior Business Adviso,
Marketplaces
Advertising Platform,
Schibsted

19. David Goddard
Vice President, Global Programmatic
Strategy, BBC
Attitudes to Programmatic
Advertising

20. AREWEATA
TURNINGPOINT?@iabeurope
Marketing Week, Sept 2017
Digiday, Jan 2018
AdWeek, Feb 2018
Econsultancy, Oct 2016
#IABEUVPD

21. Supply chain transparency
• Advertisers – 35%
• Agencies – 56%
• Publishers - 41%
Increased / granular control of media
• Advertisers – 24%
• Agencies – 50%
• Publishers - 34%
Brand safety
• Advertisers – 24%
• Agencies – 49%
Fraud
• Advertisers – 30%
• Agencies – 32%
Hiring people with the right skill set
• Advertisers – 32%
• Agencies – 29%
• Publishers - 46%
@iabeurope
AREWEATA
TURNINGPOINT?
#IABEUVPD

22. 0%
9% 9%
14%
46%
23%
0%
3%
8%
16%
35%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Utilisation of a
consultancy
Outsourced to an
independent
trading desk
Outsourced to a
DSP
Hybrid model
(more than one of
the above)
Outsourced to an
agency
In-house
operations
2017 2018
EVOLUTIONOF
PARTNERSHIPS
Advertisers
@iabeurope
#IABEUVPD

23. 9%
12%
26%
54%
6%
9%
24%
62%
0%
10%
20%
30%
40%
50%
60%
70%
Outsourced to an
independent trading desk
Outsourced to a DSP Hybrid model (more than
one of the above)
In-house agency trading
desk
2017 2018
Agencies
@iabeurope
EVOLUTIONOF
PARTNERSHIPS
#IABEUVPD

24. 8% 8%
40%
44%
9%
13%
29%
50%
0%
10%
20%
30%
40%
50%
60%
Outsourced to a third-party
network
Outsourced to an SSP Hybrid model (more than
one of the above)
In-house operations
2017 2018
Publishers
EVOLUTIONOF
PARTNERSHIPS@iabeurope
#IABEUVPD

25. Advertisers Agencies Publishers
Gain greater transparency
on where campaigns run
56%
Increase operational
control
75%
Better monetisation of
inventory
81%
Reduce agency costs 56%
Better ability to access
audience insight
54%
Benefit from a more
efficient sales and ad
operations process
52%
Keep first party data under
control
44%
Better understanding
of the consumer
pathway
46%
Better integration of
audience data into
trading processes
43%
DRIVENBY…@iabeurope
#IABEUVPD

26. METRICSCONTINUE
TOEVOLVE
Advertisers Agencies Publishers
Sales KPIs 48% Sales KPIs 63% Cost per mille (CPM) 48%
Brand awareness 29% Targeting accuracy 38% Brand awareness 32%
Purchase intent / Cost per mille
(CPM) / Viewability
26% Reach and frequency 27% Sales KPIs / Viewability 29%
@iabeurope

27. DATA,DATA,DATA…
79%
84%
81%
70%
82%
84%
72%
79%
73%
43%
50%
42%
48%
53%
66%
27%
31%
27%
44%
69%
52%
69%
77%
87%
40%
46% 45%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2016 2017 2018 2016 2017 2018
Advertiser Agency Publisher
First party data Second party data Third party data
Type of audience data used
@iabeurope

28. THEFUTURE…
90%+
of advertisers, agencies and
publishers expect their
programmatic investment
to increase over the next 12
months.
@iabeurope

29. #IABEUVPD
PANEL Attitudes to Programmatic Advertising
MODERATOR
David Goddard
Vice President Global
Programmatic
Strategy, BBC
Ash Grant
Display Lead,
HSBC
Rick Jones
Senior Vice President,
Global Revenue
Development, Adform
Sandra Yassaka
Vice President,
Demand Products
and Partnerships,
Improve Digital
Ed Weatherall
VP Partnership
Markets EMEA,
Sizmek
Lisa Kalyuzhny
Director Advertiser
Solutions, PubMatic

30. Oliver Gertz
Managing Director Interaction, EMEA
Mediacom Worldwide
Transparency and Trust in
Digital Advertising
Where are we now?

31. #IABEUVPD
What does Transparency mean?
Understand
Outcomes
Understand,
where my
Money & Data
goes
Where does my ad appear?
Is it viewable, brand-safe
and fraud-free?
What impact does it have?
Reporting
How does the ecosystem function?
How do intermediaries earn money?
Who is using my data for which purpose?
Ad
Verification Measure-
ment

32. #IABEUVPD
Where does the advertisers’ money go?
Brand
Agency
DSP
SSP
Publisher
“Only 40ct in the $
reach the consumer”
WFA, 2014
WFA, 2014: https://www.wfanet.org/app/uploads/2017/04/programmatic.pdf

33. #IABEUVPD
The IAB Europe Transparency Guide
https://prezi.com/view/mYGLuF1JP2CUgJu7bFBZ/

34. #IABEUVPD
Transparency is based on asking questions
Data
Cost /
fees
Inventor
y
Sources
https://prezi.com/view/mYGLuF1JP2CUgJu7bFBZ/

35. #IABEUVPD
Advertisers ask: “Where does €100 of my spend go?”
100.000 €
-12.000 € -.6000 €
-8.000 €
-6.000 €
-15.000 €
-59.000 €
Advertiser
Agency
Ad…
DSP
SSP
Data
Publisher
Ideal Setup
Buy side:
~20%
Sell side:
~80%
~10%~15%
~10%
Source: Market evaluation by Oliver Gertz
• Data is a “working”
ingredient, just like media,
and monetised by publishers
• Cost basis for many % fees is
not the €100 client budget
• ~80% of the budget is
reaching the sell-side
• There is no “ad-tech tax”
• Advertisers use agencies and
DSPs if they add more value
than they cost
• Publishers use SSPs and data
market-places to earn more

36. #IABEUVPD
Does Blockchain bring value chain transparency?
My definition of Blockchain:
distributed and encrypted ledger
to document all transactions between
parties that don’t know or trust each other

37. #IABEUVPD
Does Blockchain bring value chain transparency?
Brand
If you believe the programmatic market is and will be a black-box:
You see many intermediaries that may not be trusted: Blockchain may be solution
Transparency & Trust through direct relationships
Agency
DSP
SSP
Brand Publisher
Publisher
If you believe that the value chain should be as short as possible between trusted partners:
Vendor
1
Vendor
2
Vendor
3
Vendor
4
Vendor
…
Vendor
n

38. #IABEUVPD
IAB drives Industry Standards
Ads.txt RTB 3.0 Ads.cert
Bad actors are not able to insert themselves into the value chain for much longer

39. #IABEUVPD
Understand Costs to recognise Value
Understanding costs in the value
chain is important.
More important is to understand
the Value created for Advertisers
& Publishers

40. #IABEUVPD
From cheaper impressions to the Quality Impression
Quality CPM =
COST
Quality Impressions
viewable
& ad fraud free
& brand safe
ad fraud free
viewable brand safe
QUALITY

41. #IABEUVPD
Premium inventory may have lower Quality CPM
100
118
141
168
At least 50% At least 55% At least 65% At least 70%
Ad viewability has non-linear effect
on sales lift
Impact of Viewability on Index of Sales Lift
Source: Using Data to Drive Solutions to IVT, Viewability and Ad Blocking, Comscore,
July 27, 2016
124
100
Open Exchange Premium Deals
Index QCPM
Quality measured: 100% in view for >5s OR 80% >30s AND Fraud Free AND Brand Safe
Source: GroupM Newsworks, Quality Media Study across 84 campaigns, June 2018.
Premium Inventory has
24% lower QCPM

42. #IABEUVPD
Focus on cost per Outcome
Cost per
Impression
Cost per
Engagement
Cost per
Action
Cost per
Business
Outcome

43. #IABEUVPD
Transparency means asking questions
Understand
Outcomes
Understand,
where my
Money & Data
goes
IAB Europe Brand Advertising Framework
IAB Europe Transparency Guide
IAB Europe Transparency and Consent Framework
Continue the dialogue: Oliver.Gertz@Mediacom.com

44. #IABEUVPD
PANEL GDPR 6 Months on – the Impact on the
Programmatic Advertising Ecosystem
MODERATOR
Lindsay Rowntree
Head of Content,
Exchange Wire
Andrew Buckman
Managing Director
EMEA, Sublime
Yu-Hsuan Lin (SAM)
Head of
Programmatic,
Zenith UK
Thomas Adhumeau
Senior Associate
General Counsel,
Commercial &
Privacy, AppNexus
Nicola Rovario
Head of EMEA Data
Protection and Privacy
Specialists, Google

45. Clementina Piazza
Programmatic Director EMEA,
Integral Ad Science
Summary & Close

46. Get involved
Marie-Clare Puffett
Business Programmes Manager
puffett@iabeurope.eu
@iabeurope
/iab-europe
www.iabeurope.eu