REPORT

2018

ATTITUDES TO
PROGRAMMATIC
ADVERTISING
Contents

Executive Summary 3

1. Introduction 7

2. Methodology and Participants 9

3. Current Adoption and Strategies 11

4. Attitudes to Programmatic Advertising 23

5. Measurement and Data Strategy 30

6. Future of Programmatic Trading 36

7. With Thanks 37

8. About IAB Europe and Contact 38

Attitudes to Programmatic Advertising Report 2018 2

 EXECUTIVE SUMMARY

The fourth annual IAB Europe Attitudes to Programmatic report highlights

four key findings:
1. Programmatic in-housing continues to increase and is now the favoured
model for advertisers
2. Whilst programmatic trading is becoming the norm for most
stakeholders, issues such as ad fraud remain key barriers to increasing
investment
3. Private marketplaces are the dominant trading mechanism used for
programmatic
4. Investments in programmatic are set to continue to increase

Advertisers continue to demand transparency, greater control, access to

quality environments and inventory and are developing in-house strategies
to achieve these. According to the research, in-house is now the favoured
advertiser model with nearly 40% executing their programmatic trading via
in-house operations. It also remains the primary model for publishers (50%
now have an in-house model) and agencies (62% now have an in-house
trading desk).

The amount of display, mobile and video inventory that agencies and
publishers trade programmatically has continued to increase whilst the level
of investment from advertisers has seen weaker growth.

Attitudes to Programmatic Advertising Report 2018 3

However, more than 90% of all stakeholder groups state that they think their
programmatic investment will increase over the next 12 months.

In spite of the positive outlook, there are potential warning signs that could
impact growth in the future. The research highlights that advertisers,
agencies and publishers all see challenges around recruiting people with the
right skill-set as well as providing relevant training to drive their businesses
forward. Not having access to the necessary resources could slow down
programmatic adoption. Increased demand for relevant personnel could
also drive up salaries which has an impact on the cost structures for all
stakeholders. For the UK, Brexit will affect the flow of workers into the
country which again will put pressure on the ability to attract programmatic
expertise going forward.

A major opportunity for programmatic growth is to tap into brand budgets

that are currently being invested in other channels, particularly TV. While
positive developments have been implemented in the last 12-18 months to
make programmatic more attractive to advertisers, there is still work to be
done to realise this potential in the future.

The research highlights the ongoing challenges around campaign

measurement for advertisers and a focus on sales KPIs for evaluating
programmatic investment. This suggests that brand-specific metrics
important to advertisers are still not being adequately addressed in a digital
environment such as programmatic that has traditionally been direct-
response led.

Attitudes to Programmatic Advertising Report 2018 4

Increasing the confidence of advertisers in programmatic by addressing their
requirements remains a key focus for the industry to ensure continued
growth.

Another area to focus on in the future is transaction models and strategies.

Private marketplaces are being used by the majority of stakeholders.
Automated guaranteed is also making progress, utilised by agencies looking
to secure more inventory at locked-in pricing, while being less of a focus for
advertisers and publishers. As quality inventory increases in demand and
becomes harder to identify in a world of auctions, headers, and exchanges, a
need to safely procure inventory and guarantee its delivery is emerging.

Attitudes to Programmatic Advertising Report 2018 5

“ In its fourth year, the IAB Europe Attitudes to Programmatic Advertising
research demonstrates how automated buying is quickly becoming the
mainstream way to buy digital advertising. Investment levels continue to
rise, and more advertisers than ever are becoming directly engaged in the
process - moving to new ways of buying and working with partners on
hybrid models to give them more understanding and control over their
spend in this channel, as we see in the growth of private marketplaces.
There are still challenges facing the industry, among them GDPR which of
course was heavily prevalent on people's minds as the survey was in field,
with the need for greater transparency still top of mind for many as
progress is made with initiatives like ads.txt and the IAB Europe
Transparency and Consent Framework to provide the groundwork for
consumer consent for publishers. Talent is also highlighted as a key
challenge, with the changing role of programmatic buying and selling
within brands, agencies and publishers putting greater demand on
marketers and planners to understand the process and benefits of
programmatic more readily as bigger, brand-led advertising is brought
together with the capabilities of the algorithms and analytics within
platforms to drive greater ROI.

Simon Halstead,
Chair, IAB Europe Programmatic Trading Committee
and Head of Open Demand, International, Oath

Attitudes to Programmatic Advertising Report 2018 6

 1. INTRODUCTION

In order to understand the status of programmatic adoption across Europe,

and the way in which it is being used for strategic competitive advantage on
both the buy-side and sell-side of the digital advertising industry, IAB
Europe’s Programmatic Trading Committee developed the Attitudes to
Programmatic Advertising survey in 2015. Now in its fourth year, the 2018
report shows how attitudes, adoption and strategies are evolving.

The survey attracted respondents who command significant volumes of

advertising supply and demand. Over 75% of the respondents across
advertisers, agencies and publishers manage annual advertising budgets of
€1m or above and 5% manage budgets above €151m.

The survey asked about the following areas:

• How much programmatic is used for different formats (display, mobile and
video)
• Drivers and barriers to programmatic investment
• Operational models used for programmatic
• Measurement and data strategy
• The future of programmatic investment

Attitudes to Programmatic Advertising Report 2018 7

The report forms part of a comprehensive programme of pan-European
educational and guidance outputs published by the IAB Europe
Programmatic Trading Committee. Other outputs that may be of interest:
• Transparency Guide
• Header Bidding and Auction Dynamics White Paper
• Programmatic Mobile White Paper
• Key considerations for buy-side and sell-side programmatic strategies
• Using Data Effectively in Programmatic White Paper V2.0 with GDPR
updates

The previous versions of the Attitudes to Programmatic report can be

accessed via the following links:
• 2017
• 2016
• 2015

Attitudes to Programmatic Advertising Report 2018 8

 2. METHODOLOGY AND
PARTICIPANTS
An online survey was used with the help of the national IAB network to
ensure a representative sample across European markets. The survey
received approximately 550 respondents between May and June 2018.

The responses came from advertisers, agencies and publishers in 31 markets

and respondents with both pan-European and Global remits.

IAB Europe also segmented the markets according to their region:

• Western Europe: UK, France, Germany, Belgium, Switzerland,
Netherlands, Austria, Ireland
• Northern Europe: Norway, Sweden, Denmark, Finland
• Southern Europe: Spain, Italy, Portugal, Greece
• Central and Eastern Europe: Belarus, Bulgaria, Croatia, Czech Republic,
Hungary, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey,
Ukraine

IAB Europe members can access the full data set with region breakouts by
contacting Marie-Clare Puffett (contact details at the back of this report).

Attitudes to Programmatic Advertising Report 2018 9

FIGURE 1 – Breakdown of respondents

65

100
Local remit
Advertisers - 75 Pan-European remit
Agencies - 273
Global remit
Publishers - 175

635

Attitudes to Programmatic Advertising Report 2018 10

 3. CURRENT ADOPTION
AND STRATEGIES
Advertising budgets
The results indicate that investment in digital is increasing. For advertisers,
29% invest more than 61% of their advertising budget in digital, this is up
from 17% in 2017. However, advertisers lag behind other industry
stakeholders as 50% of agencies invest more than 61% in digital and 44% of
publishers.

Furthermore, advertisers who spend above 81% of their budget on digital

doubled since 2017 (9% to 18%). Both agency groups and publishers also
saw an increase in the amount of advertising budgets going to digital, 25%
and 11% respectively now allocate more than 81% to digital. This increase in
budgets being allocated to digital indicates that there is potential for further
growth in programmatic trading. Indeed, the European Programmatic
Market Sizing 2017 Report highlights that two thirds of display ad spend is
now traded programmatically.

Adoption of programmatic trading

For agencies, programmatic trading of inventory has become the norm as
they seek efficiencies for their investment.
However, the concerns that brands have around programmatic and fraud are
reflected in these figures as the proportion of display, mobile and video
bought programmatically fell compared with 2017. Ads.txt, an industry
initiative introduced to combat ad fraud is seeing high adoption.
Attitudes to Programmatic Advertising Report 2018 11
FIGURE 2 – Percentage of stakeholders that use programmatic to buy /
sell more than 41% of their display, mobile video inventory
60% 57%
54% 55%
52%
50%
44%
42% 41% 41% 41%
40%
34% 33%
32% 32%
30%
28%
30% 26% 25%

20%
15%

10%

0%
Advertisers Agencies Publishers Advertisers Agencies Publishers Advertisers Agencies Publishers
Display Mobile Video

2017 2018

The number of agencies trading the majority (61-80%) of their video, display
and mobile budgets via programmatic buying has almost doubled since 2017
(video: 21% to 39%; mobile: 18% to 39%; display: 19-39%).

For publishers the majority (61-80%) of their mobile and video inventory sold
programmatically also doubled since 2017 whilst display saw a lower
increase (video: 8% to 20%; mobile: 28% to 39%; display: 10%-16%).

39% of agency respondents stated that the majority of (>81%) of digital

advertising traded manually is purchased in-house. This does not indicate
greater volumes of inventory is going to non-programmatic executions, but
that there has been a reduction in third party buying arms such as ad
networks.

Attitudes to Programmatic Advertising Report 2018 12

Both the increase of programmatic buying and tighter scrutiny on supply

“
chain management could have led to this.

The programmatic buying of digital inventory still plays a

significant role in our client’s media mix. Some of our clients are
aiming to invest between 50%-70% of their digital media dollars
into programmatic. And this year we have seen a welcoming shift
towards a focus of transparency, better measurement and quality
over quantity.
Ina Arens,
Head of Programmatic Worldwide,
MediaCom

Programmatic native advertising

IAB Europe asked about the percentage of programmatic trading budgets
that are invested in native advertising for the first time this year. Whilst it has
seen an increase in popularity, the amount of investment via programmatic
is low. This could be due to the fact that these are unique formats which
have low demand outside of social channels.

45% of advertisers and publishers and 67% of agencies said that less than
20% of their programmatic trading budget is invested in native
advertising. 37% of publishers, 21% of advertisers and 13% of agencies said
that 0% of their programmatic budget was allocated to native advertising.

Attitudes to Programmatic Advertising Report 2018 13

Transaction types
Whilst advertiser investment in private marketplaces (PMPs) is relatively low
with just 24% investing more than 41% of their display inventory, 19% for
mobile and 13% for video, it is still the most dominant transaction
mechanism amongst advertisers. Advertiser concerns over transparency and
control mean that the use of PMPs will likely increase as they allow them
greater control over where their ads appear. Despite it’s reported growth
automated guaranteed is used less than open auctions by advertisers. Less
than 20% of digital advertising is purchased via this route for the three
formats, (display 60% purchased less than 20%, 57% for mobile and 60% for
video).

For agencies, there is also a preference for PMP driven buying. For display,
nearly half of agencies (48%) are buying more than 41% of their display
inventory via a PMP, 44% for mobile and 51% for video. Again, this may be
driven by the need to ensure safe environments for advertiser clients. The
use of open auctions is fairly similar across the three formats. 31% of
agencies are using the open market to purchase 41%+ of display inventory,
for mobile it is 35% and video 27% being purchased.

As display is the most mature of the formats, publishers are comfortable

trading these programmatically. 52% of them trade 41%+ of their display
inventory and 53% trade 41%+ of their mobile inventory via an open
auction compared with 32% and 22% respectively via a PMP.

Attitudes to Programmatic Advertising Report 2018 14

However, when it comes to video, which is of higher value, only 19% of
publishers trade 41%+ and 62% trade less than 20% of their video inventory
via an open auction. PMPs are the preferred method for video, 37% of
publishers sell more than 41% of their inventory via this route as they seek
more direct agreed upfront deals. As with advertisers the adoption of
automated guaranteed on the sell-side is low with 83% of publishers trading
less than 20% of their display inventory in this manner.

FIGURE 3 – Percentage of stakeholders that use programmatic to buy /

sell more than 41% of their display, mobile video inventory
45%

40% 39%
38%
36%
35% 33%
30%
30% 29%
28%
26% 26%
25% 25% 25%
25% 24% 24% 24%
21%
20% 19%
18% 18%

15% 13%
11%
10% 8% 8% 8%
6%
5% 5%
5%

0%
Agencies

Agencies

Agencies

Agencies

Agencies

Agencies

Agencies

Agencies

Agencies
Publishers

Publishers

Publishers

Publishers

Publishers

Publishers

Publishers

Publishers

Publishers
Advertisers

Advertisers

Advertisers

Advertisers

Advertisers

Advertisers

Advertisers

Advertisers

Advertisers

Automated Private Open Automated Private Open Automated Private Open

Guaranteed Marketplace Auction Guaranteed Marketplace Auction Guaranteed Marketplace Auction

Display Mobile Video

Attitudes to Programmatic Advertising Report 2018 15

Operational models
2018 is the first year that we have seen in-house strategy become the
favoured advertiser model (2018 = 38% v 2017 = 23% and 35% outsourcing to
an agency) for programmatic trading. It also remains the primary model for
publishers (50% now have an in-house model) and agencies (62% now have

“
an in-house trading desk).

Advertisers today are looking to get the greatest possible efficiency,

effectiveness, transparency, and flexibility in the way they manage
their media investments. As this IAB Europe report clearly shows,
Programmatic advertising forms a crucial part of the transformation
for large brands to future-proof their media operations in response to
the ongoing digitization of the media ecosystem. Although there are
still many problems to solve and challenges to face, the report also
highlights that advertisers who decide to take more control of the
programmatic value chain can enhance the benefits they gain.
With the implementation of our new Media Operating Model
(MOM), we at Deutsche Telekom are doing exactly that: increasing
active guardianship and control over our paid media placements and
outcomes, including in the area of programmatic media. Positioned as
a hybrid model, one of the cornerstones of our model include the
strengthening the company's internal competence to ensure media-
neutral media strategy, planning & buying.

Gerhard Louw, Head of International Media

Management and Digital Transformation,
Deutsche Telekom

Attitudes to Programmatic Advertising Report 2018 16

FIGURE 4 – Operational models by stakeholder
Advertisers
50% 46%
38%
40% 35%

30% 23%
20% 14% 16%
9% 9% 8%
10%
3%
0% 0%
0%
Utilisation of a Outsourced to Outsourced to a Hybrid model Outsourced to In-house
consultancy an independent DSP (more than one an agency operations
trading desk of the above)

2017 2018

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

60% Publishers 50%

50% 44%
40%
40%
29%
30%
20% 13%
8% 9% 8%
10%
0%
Outsourced to a third- Outsourced to an SSP Hybrid model (more In-house operations
party network than one of the above)

2017 2018

Attitudes to Programmatic Advertising Report 2018 17

In-housing programmatic trading
Two thirds of agencies (62%) and two thirds of publishers (63%) that don’t
currently have an in-house model are considering bringing programmatic in-
house in the next 12 months. For advertisers it is a lower figure with 43%
considering in-house.

The majority of these advertisers (56%) and publishers (71%) believe they
have sufficient budgets to invest in staff and technologies to support in-
housing while for agencies it’s less than half (42%). However the same
amount of agencies are unsure or still evaluating and 17% of agencies
actually said they don’t have the required budgets.

In-house drivers
Regardless of whether or not a stakeholder has an in-house model already or
is considering one over the next 12 months there is a similar theme in the
drivers for in-house in each stakeholder group.

Publishers are driven by the need for efficiencies as well as the ability to gain
a greater share of budgets through better monetisation and using data more
effectively to drive up the value of inventory.

Agencies are driven by control, reducing costs to help with profitability and
access to use data and insight to enable better campaign targeting and more
effective campaigns.

Attitudes to Programmatic Advertising Report 2018 18

 For advertisers, control is also key. Control on where their ads run remains a
priority and a key driver for bringing programmatic in-house. A backlash
against the lack of transparency and hidden fees could be reflected in the
desire to reduce agency costs and have better control of overall costs. The
ongoing importance of first party data is highlighted as advertisers seek
greater control of their data too. Integrating with other marketing teams is
also a key reason for programmatic in-housing amongst advertisers.

FIGURE 5 – Top 3 in-house drivers cited by stakeholders with an in-

house strategy

Advertisers Agencies Publishers

Increase efficiency by
Integrate programmatic with
managing inventory Better monetisation of
other in-house teams like 62% 61% 79%
previously managed by inventory
CRM, customer service etc.
ad networks

Benefit from a more

Keep first party data under Better ability to access
46% 56% efficient sales and ad 44%
control audience insight
operations process

Increase operational control Deliver brand campaigns Gain greater transparency

38% 55% 38%
/ Reduce operational control at scale more effectively and control of operations

Attitudes to Programmatic Advertising Report 2018 19

FIGURE 6 – Top 3 in-house drivers cited by stakeholders considering an
in-house strategy in the next 12 months

Advertisers Agencies Publishers

Gain greater transparency Increase operational Better monetisation of

56% 75% 81%
on where campaigns run control inventory

Benefit from a more

Better ability to access
Reduce agency costs 56% 54% efficient sales and ad 52%
audience insight
operations process

Better integration of
Better understanding
audience data into
of the consumer
Keep first party data under trading processes /
44% pathway / Better 46% 43%
control Better integration of
understanding of the
audience data into
consumer pathway
trading processes

In-house barriers and challenges

While budgets may be in place, in-housing brings greater pressure on finding
people with the right skills and experiences to support this strategy.
Difficulty in hiring people with the right skills and training people adequately
is a recurring theme amongst stakeholders whether they already have an in-
house strategy, are considering developing one or are not looking into in-
housing just yet.

A significant number of advertisers (56%), agencies (71%) and publishers

(48%) that don’t currently have an in-house strategy have all cited
challenges around recruiting people with the right skill sets as the key barrier
to not bringing programmatic in-house so far.

Attitudes to Programmatic Advertising Report 2018 20

 More than half of agencies (58%) and advertisers (58%) are also finding
difficulties in training people, adding to the pressure on recruitment.

Further, for stakeholders that don’t have an in-house strategy and are not
currently considering one, difficulty in hiring people with the right skill set
was cited as one of the key reasons for this. Demand across all stakeholders
may also impact wage levels, increasing cost structures in the future which
will affect the budget considerations.

For advertisers with an in-house operational model in place, measurement

has increased as a challenge, perhaps reflecting the needs of brands for
measurement that reflects brand metrics rather than the traditional direct
response metrics.

FIGURE 7 – Top 3 challenges cited by stakeholders with an in-house

strategy

Advertisers Agencies Publishers

Hiring people with the Assessing and vetting

Campaign measurement 62% 78% 50%
right skill set technology partners

Assessing and vetting Assessing and vetting Training people

46% 66% 44%
technology partners technology partners adequately

Campaign Hiring people with the

Data quality 46% 47% 41%
measurement right skill set

Attitudes to Programmatic Advertising Report 2018 21

FIGURE 8 – Top 3 barriers cited by stakeholders considering an in-
house strategy in the next 12 months

Advertisers Agencies Publishers

Difficulty in hiring Difficulty in keeping up

Difficulty in hiring people
56% people with the right 71% with changing 62%
with the right skill set
skill set technology

Difficulty in hiring
Difficulties in training Difficulties in training
44% 58% people with the right 48%
people adequately people adequately
skill set

Difficulty in
understanding the
Difficulty in understanding
Investment technology
the technology 33% 58% 43%
constraints requirements / Inability
requirements
to change current

“
budget structures

P&G Turkey initiated its programmatic investments in the past 12 months

via its own DSP and DMP. This process has been a steep learning curve
with two key learnings. Firstly, although open auction / real-time
bidding provides lower CPMs, reaching premium publishers via this
mechanism is still a challenge as publishers prioritise PMPs. Secondly,
having the right team with the necessary skillsets is crucial not only
during the set-up but also during the operational stages. As the IAB
Europe research highlights, hiring the right skills is still a key challenge
in programmatic trading. Our current solution involves a team of
programmatic experts and data scientists within our media agency
partner.
Esra Erdoğan,
P&G TCAU Media Group Manager,
P&G Turkey

Attitudes to Programmatic Advertising Report 2018 22

 4. ATTITUDES TO
PROGRAMMATIC ADVERTISING
Drivers of programmatic investment
For all three stakeholder groups, data comes out as a key driver for
considering investing in or increasing their programmatic investment. They
all see the value that can be delivered by releasing data to drive more
effective campaigns.

For the buy-side, both advertisers and agencies, campaign effectiveness is

key with targeting the number one driver and data is key to enabling
effective and efficient targeting. Lowering the cost of media has grown in
importance amongst advertisers. The increase in video investment moving
to programmatic channels may have had a hand in inflating this figure as
eCPMs in programmatic appear to be on the rise. The desire to bring down
the cost of media is also reflected in advertisers interest and move to in-
housing programmatic.

Publishers are focused on driving greater revenue from their inventory and
again data plays a role here. Client demand continues to be a key driver for
more than half of (54%) publishers to enable inventory to be monetised via
programmatic transactions. Gaining competitive advantage saw the biggest
drop, which is unsurprising as programmatic trading is becoming the norm
to trade digital inventory.

Attitudes to Programmatic Advertising Report 2018 23

FIGURE 9 – Drivers of programmatic investment by stakeholder 2016-
2018
Advertiser Agency Publisher

2016 2017 2018 2016 2017 2018 2016 2017 2018

Lower cost of
media 53% 22% 38% 41% 28% 29% N/A N/A N/A
Targeting
efficiencies 76% 71% 68% 78% 75% 73% N/A N/A N/A
Better use of data
(new for 2018) N/A N/A 62% N/A N/A 72% N/A N/A 42%
Maximising media
value N/A N/A N/A N/A N/A N/A 55% 37% 34%
Trading /
operational 29% 29% 35% 55% 60% 42% 49% 34% 30%
efficiencies

Gain competitive
advantage 26% 29% 24% 45% 38% 46% 44% 48% 30%
Increased value of
inventory (new fo
2018 N/A N/A N/A N/A N/A N/A N/A N/A 51%

Delivery of brand
advertising
campaigns at 49% 40% 27% 45% 44% 36% N/A N/A N/A
scale to target
audience
Gaining access to
premium
inventory at scale 21% 23% 19% 30% 28% 24% N/A N/A N/A

Delivering
audiences via
programmatic N/A N/A N/A N/A N/A N/A 30% 25% 20%
mobile
Reaching
audiences via
programmatic 30% 26% 35% 41% 35% 27% N/A N/A N/A
mobile
Increased
engagement via
programmatic 19% 49% 24% 23% 21% 20% 15% 21% 15%
video

Agency
recommendation 17% 14% N/A N/A N/A N/A N/A N/A

Client demand
N/A N/A N/A 29% 29% 24% 60% 71% 54%
Increased
granular control of 23% 48% 24% 37% 41% 50% 27% 29% 34%
media / inventory

Attitudes to Programmatic Advertising Report 2018 24

“ Efficiency is definitely one of the key drivers of programmatic buying
adoption, however it goes beyond simply a better ‘cost per’ metric. We
have seen clients adopt programmatic buying in ways that work the
best for their brands. There is no one size fits all solution.
From our agency point of view, the key here is to help our clients
intelligently and selectively leverage the capability that programmatic
has to offer, while keeping the clients business objective at its core. It’s
this flexibility that really contributes towards the adoption we have seen
to date.
Yu-Hsuan Lin (SAM)
Head of Programmatic,
Zenith

Attitudes to Programmatic Advertising Report 2018 25

Barriers to programmatic investment
For advertisers, adequate training is a growing concern and has risen in
importance since last year, while hiring has decreased in importance.
Interestingly, brands still need convincing of the financial benefit that
programmatic can deliver for them with the impact on total revenues cited
as their joint second barrier. This may well feed into advertiser concerns
around fraud, brand safety and transparency which could cause them to
question programmatic as a solution for brand campaigns.

A consistent theme across all stakeholders is around supply chain

transparency as the industry tackles this issue and looks to deliver greater
transparency and confidence in programmatic. One of the key industry
initiatives to address these concerns is the IAB Europe Transparency Guide
which provides questions for each stakeholder category to be asked at
different stages of the supply chain.

Agency concerns around brand safety reflect the concerns of their advertiser
clients and they still see data quality as a barrier, although this fell compared
with 2017.

Cost and transparency are important to publishers but recruiting the right
people still remains the number one challenge in 2018.

With the GDPR coming into force in May, it may have been expected that
concerns around data protection may have been a barrier. However, this
concern comes relatively low down the list for all three stakeholders groups.

Attitudes to Programmatic Advertising Report 2018 26

FIGURE 10 – Barriers to programmatic investment by stakeholder
2016-2018
Advertiser Agency Publisher

2016 2017 2018 2016 2017 2018 2016 2017 2018

Hiring people
with the right 31% 43% 32% 42% 52% 29% 46% 46% 46%
skill set
Training people
21% 34% 38% 35% 42% 25% 40% 37% 38%
adequately
Cost of
20% 42% 35% 35% 29% 29% 37% 48% 39%
technology

Cost of data 19% 26% 16% 23% 20% 20% 18% 20% 17%

Quality of data 37% 34% 27% 45% 53% 38% 27% 27% 32%
Data protection
concerns (new N/A N/A 24% N/A N/A 24% N/A N/A 30%
for 2018)
Supply chain
transparency N/A N/A 35% N/A N/A 56% N/A N/A 41%
(new for 2018)

Selecting and
setting up the 27% 26% 11% 29% 22% 32% 40% 37% 31%
right technology
Having a clear
understanding
of the impact of
programmatic
31% 23% 35% 31% 30% 25% 42% 43% 32%
trading on total
revenue

Brand safety 30% 37% 24% 40% 44% 49% 23% 33% 27%

Fraud 26% 46% 30% 45% 40% 32% 25% 33% 27%

Viewability 30% 14% 24% 37% 30% 24% 24% 22% 17%

Creative
17% 9% 11% 17% 15% 10% 11% 10% 4%
optimisation
Campaign
N/A 11% 19% N/A 18% 17% N/A 14% 18%
performance
Campaign
measurement 27% 20% 27% 17% 2% 33% 19% 16% 11%
and reporting

Attitudes to Programmatic Advertising Report 2018 27

The survey results demonstrate that whilst many of the barriers are shared
across Europe, there are some differences in the level of impact of these
barriers. In Western Europe supply chain transparency is a barrier to more
than 50% of advertisers and agencies, whereas in Southern Europe it is cited
by less than 20% of advertisers as a barrier. Almost two thirds (62%) of
agencies in CEE also share this concern. In Northern Europe the majority of
advertisers (80%) have data protection concerns, whilst in WE and CEE this is
reduced to a third of advertisers.

Another key difference is the skills and training concern. 80% of advertisers
in Northern Europe; 50% of advertisers and agencies and 40% of publishers
in Southern Europe are concerned about training people adequately, but
less than a third of advertisers and agencies in Western Europe and CEE
share this concern. Half of publishers in CEE see the cost of technology as a
barrier but less see hiring and training as a barrier.

Attitudes to Programmatic Advertising Report 2018 28

“ Programmatic digital buying has witnessed another year of increased
investment and growth, coupled with industry challenges, that have
encouraged key publishers and tech partners to pull together in
order to overcome. I believe that the IAB Europe Attitudes to
Programmatic survey is quickly becoming a crucial piece of research,
benchmarking not only how the industry have dealt with previous
challenges, but also a useful barometer for the year ahead.
Overcoming barriers will allow the programmatic ad industry as a
whole to maximise ROI and look forward to continued growth into
2019. David Goddard,
Global Head of Programmatic Trading,
BBC

Key business impacts of programmatic investment

For the buy-side, the data shows us that programmatic is helping to drive
more effective campaigns and efficient use of budgets by reducing wastage,
enabling better targeting, reducing costs and introducing greater campaign
control and flexibility.

For publishers, programmatic is helping to build revenues as CPMs rise while

the greater trading efficiencies they are experiencing affect costs to support
their bottom line.

Attitudes to Programmatic Advertising Report 2018 29

 5. MEASUREMENT AND
DATA STRATEGY
The number of buy-side stakeholders using the same success metrics for
programmatically traded display campaigns as those traded non-
programmatically has increased since 2017: more than 80% of agencies are
now using the same metrics. Doing so has certainly contributed to reinforce
that notion of programmatic as an automated way of transacting digital
media, rather than a synonym for a lower-quality ecosystem.

KPIs used to evaluate programmatic campaigns

There are no surprises in seeing alignment between advertisers and agencies
when it comes to considering sales trends as a core metric in evaluating
programmatic display campaigns. The same applies for publishers’ choice of
CPMs. To put it in other terms, it should be no surprise that a business’ core
focus is to monitor success or lack thereof based on fluctuation of income.

In that regard it is promising to see an alignment between advertisers and

publishers in associating the same high value to viewable impressions and
the correlation they have with providing a baseline for an ad-exposure to be
effective and thus highly valued. Overall, there is a strong correlation
between the responses of advertisers and publishers, compared to 2017.
This is a testimony of the efforts publishers have put in place in addressing
advertiser’s needs and requirements, executing more closely on them.

Attitudes to Programmatic Advertising Report 2018 30

 When it comes to agencies, there has been a strong shift compared to 2017
from viewability in favour of sales KPIs. If we think of agencies as those
executing on an advertiser’s strategy, such change of perspective could be
interpreted with the level of maturity achieved by the market on this aspect.
By pushing the definition of viewability further, they can better align with
advertiser’s needs, evolving the notion of effectiveness to be tailored around
each brand’s specific goals.

If in 2017 we had seen a shift away from the click to more branding metrics
for the evaluation of programmatic display campaigns, in 2018 the element
that transpires across the board is a consolidation of an approach that
focuses back on core business objectives and seeks to operate on metrics
that can prove to be consistent proxies for them.

FIGURE 11 – Top 3 metrics used by stakeholder

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

26% Reach and frequency 27% Sales KPIs / Viewability 29%
mille (CPM) / Viewability

Attitudes to Programmatic Advertising Report 2018 31

Type of audience data used
With the implementation of GDPR and concerns around data control, it is
perhaps not surprising to see that of all audience data types, first party is the
principal source used by all stakeholders and this has remained stagnant
since 2016.

While publishers and advertisers leverage first-party data more, agencies are
currently utilising a greater mix of first, second and third party data,
something we also saw in the 2017 report. This trend continues in the
responses to the question of what type of data they are planning to leverage
in the future: agencies are looking to slightly increase their leverage of first
party data, while relying slightly less on third party data. The real uptake for
agencies, however, can be seen in utilising second party data sold by
publishers. 73% of respondents of agencies in Southern Europe are planning
to leverage second party data. This is up from 55% of currently leveraged
second party data.

With GDPR in full swing since 25 May of this year, this is not a surprising
trend. There is a general concern around data control but also data
modelling and therefore the accuracy of data that can be bought
programmatically. This has led to a general re-thinking of how our industry
leverages various data sources. We might see a slow move away from
modelled data towards verified data and contextual data.

Attitudes to Programmatic Advertising Report 2018 32

FIGURE 12 – Type of audience data used by stakeholder 2016-18

100%

90% 87%
84% 82% 84%
79% 81% 79%
80% 77%
72% 73%
69% 70% 69%
70% 66%

60% 53%
50% 52%
48% 46%
50% 44% 45%
43% 42% 40%
40%
31%
30% 27% 27%

20% 14%
6% 7% 8%
10% 5% 3% 3% 3% 2%
0%
2016 2017 2018 2016 2017 2018 2016 2017 2018
Advertiser Agency Publisher

First party data Second party data Third party data None

Data sources used

DMPs are considered the primary source of data, across all three categories
of respondents and especially for agencies, whilst the use of DSPs as a data
source amongst buy-side stakeholders has decreased. Likewise, own
platforms and properties are generally confirmed as a strong source of data.
Furthermore, advertisers and agencies in particular leverage own
partnerships as solid data sources. Out of the three stakeholder groups,
agencies are mostly taking advantage of data providers for enhancing their
campaigns.

Attitudes to Programmatic Advertising Report 2018 33

FIGURE 13 – Data sources used by stakeholder 2017-18

90% 81%
80% 78%
70% 65% 65%
56%56% 55%
60% 56% 55%
53%
57% 53% 56% 56% 56%58%
52% 47% 44%
50% 46% 48% 44%
40%
40% 39% 34%31% 34%
26%27% 28%
26% 27% 26%
30% 23% 23%22%
19% 18% 17% 19% 18%
20% 15% 18%
13%
10% 2% 0 0 0
0%
Publisher

Publisher

Publisher

Publisher

Publisher

Publisher

Publisher

Publisher
Agency

Agency

Agency

Agency

Agency

Agency

Agency

Agency
Advertiser

Advertiser

Advertiser

Advertiser

Advertiser

Advertiser

Advertiser

Advertiser
Data Demand-side Own platform Data provider Ad exchanges Data Supply-side Advertiser /
management platform (DSP) / properties marketplace platform (SSP) agency /
platform publisher
(DMP) partnership
(new for 2018)

2017 2018

The 2018 data essentially confirms what was observed in the 2017 report
with two key differences to highlight; a drop in the use of third party data by
advertisers and publishers and DSPs decreasing in use as a data source.

Attitudes to Programmatic Advertising Report 2018 34

“ The European data ecosystem has obviously gone through dramatic
changes in 2018. Marketers' goals have stayed the same, however,
and they still know that the relevancy of the audience matters. Great
creative, a viewable ad unit, or a compelling offer will never
overcome the wrong audience. Audience-centric media buys remain
critical for performance, whether the KPI is click, conversions, or other
actions, and the right audience data enables marketers to capitalise
on relevancy.

As the industry has matured, we’ve also seen increased scrutiny and
demand for transparency in many facets of ad tech, including ad units,
open RTB, viewability, etc. As a result, we’ve seen common currencies
emerge, along with improved understanding within the industry,
enabling marketers to make better decisions.

Is it an art or science? We’d argue it’s a bit of both but having

transparent standardised metrics can be the key to guide you.
Ben Geach,
Global Product Strategy Director,
Oracle Data Cloud

Attitudes to Programmatic Advertising Report 2018 35

 6. FUTURE OF
PROGRAMMATIC TRADING
Not surprisingly, the shift to programmatic continues unabated. As was the
case in 2017, we see continued growth and investment in this area from all
stakeholders - if we consider how many sectors of advertising are still not
fully automated (out of home billboards, print, most OTT), we can agree that
there is still plenty of room for growth and augmentation. Indeed, more than
90% of all stakeholder groups state that they think their programmatic
investment will increase over the next 12 months.

It's interesting that compared to 2017, less advertisers think that their
programmatic investment is going to increase by 31% - 50%: the majority
anticipate it will increase by 11% - 30%. Perhaps advertisers perceive a
saturation point in their investment across programmatic display, video and
mobile campaigns. As new channels such as digital out of home and
connected TV grow their programmatic capabilities and offering then this
may see an uplift in future years.

For agencies on the other hand, compared to 2017 there is a big increase in
those who believe spend is going to rise by more than 51%. For publishers,
the majority see their investment being 30% or less, with a decline in those
who believe programmatic investment will increase by more than 51%,
compared to last year.

Attitudes to Programmatic Advertising Report 2018 36

 7. WITH THANKS
IAB Europe would like to thank the following members that helped to
compile this report
David Goddard, Global Head of Programmatic
Trading, BBC

Clementina Piazza, Programmatic Director EMEA,

Integral Ad Science

Ina Arens, Head of Programmatic Worldwide,

MediaCom

Pierre Gauthier, Commercial Director France,

NewBase & Adbase France and Board Member, IAB
France

Olivier Marty, Member, IAB France

Giordano Buttazzo, Ad Tech Manager, IAB Italy

Lisa Kalyuzhny, Director Advertising Solutions,

PubMatic
Roger Williams, VP International Marketing,
PubMatic

Ryan Cook, VP Programmatic and Business

Development EMEA, Teads

Attitudes to Programmatic Advertising Report 2018 37

ABOUT IAB EUROPE
IAB Europe is the leading European-level industry
association for the digital advertising ecosystem. Its
mission is to promote the development of this innovative
sector and ensure its sustainability by shaping the regulatory
environment, demonstrating the value digital advertising
brings to Europe’s economy, to consumers and to the market,
and developing and facilitating the uptake of harmonised
business practices that take account of changing user
expectations and enable digital brand advertising to scale in
Europe.

CONTACT

www.iabeurope.eu

@iabeurope

/iab-europe

Marie-Clare Puffett
puffett@iabeurope.eu