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THE PROGRAMMATIC ECONOMYPublisher views and attitudes towards programmatic advertising in the Netherlands

Commissioned by

Key findings from a qualitative-based FaR Partners study commissioned by Improve Digital

April 2014

All rights reserved


Across Europe, and indeed worldwide, the digital advertising market is rapidly becoming moreautomated, more data driven and interconnected.

The Netherlands has been at the forefront of this change, and is currently one of the mostdeveloped countries in the world in terms of programmatic adoption.

But what are the current attitudes of publishers towards this opportunity and what are thebarriers to doing things differently? Are they adapting and if so how?

Improve Digital asked media consultancy FaR Partners to conduct a qualitative‐based researchstudy in the Netherlands to provide a market wide view of Programmatic Buying and Real TimeAdvertising trading from a publisher point of view, as we feel it’s incredibly important tounderstand the views of our customers and the market as a whole.

FaR Partners conducted the qualitative research through their publisher panels. Marketbenchmarks and insights are aggregated, evaluated and summarised in this report.

We hope that you find the results of this survey informative, and thanks again to the main Dutchpublishers who took the time to participate. We look forward to your participation in the future.

The Programmatic Economy

FOREWORD

Joelle FrijtersCEOImprove Digital


STUDY METHODOLOGY

Panel Interview Setting

The study is comprised of face to face interviewsas the topic is both complex in nature and is yetto have firmly established standards and marketterminology.

All interviews were conducted confidentially toensure the panellists felt comfortable and weretransparent with their feedback, viewpoint andapproach. The results were then aggregatedin order to provide a market wide view.

This approach has enabled FaR to deliver arelevant study that provides a unique insight intothe current state and attitudes towardsprogrammatic in the Dutch market, from thepublisher perspective.

The FaR publisher panel was developed inconjunction with Improve Digital and iscomprised of major publishers across all of therepresentative sectors in the Dutch market.

The publisher panel came from a representativesample across key verticals such as printpublishers, sales networks, telco‘s, broadcast andutility sites. Their feedback is gathered via faceto face interviews and through online surveys.

Panel questions combine both quantitative andqualitative approaches in order to deliver marketbenchmarks and insights. When aggregated,these deliver a clear representation of themarket overview, or attitudes to a particular areaor discipline.



EXECUTIVE SUMMARY


All publishers require control –which can be achieved bytransparent reporting,bid management tools and PrivateMarketplaces (PMPs).

Some publishers feel wary ofprogrammatic and need to learnhow to use it for their particularpurposes – education piece abouthigher yield opportunities withinprogrammatic needed to accessthese accounts.

Cost savings, ease of technicalintegration and sales/techsupport are important parts of theSSP offering, alongside revenueand yield.

Data is currently being appendedby half of the market, but only verybasic demographic data.Further focus on complex data useis needed to create a bigger scaleof programmatic.

In order for programmatic to growthere needs to be technicalcapabilities in SSPs to sell a widervariety of High Impact Formats, aswell as video andmobile.

The Dutch market shows very highuse of programmatic advertisingand is advanced and confidentthat programmatic will continue togrow as an important part of thepublishers strategy.


PROGRAMMATIC ADVERTISING IS KEY PART OF STRATEGY

The Dutch market has embraced programmaticadvertising, both in adoption and in terms of itsattitudes, more so than anywhere else in Europe.

Currently 89% of the panel sell between 51% and100% of their inventory programmatically, which isextremely high.

Programmatic is very much seen as strategic in theDutch market, even those who see it as tacticalpredict that it will become strategic for them in thenear future.

The vast majority still do some direct sales, butthere is an emergence of a purely programmaticelement, with SSPs and Hybrid solutions the mostcommon in the market at the moment.

“The fact that programmatic is efficient, and everybody benefits

from it is what’s driving the market. For us it’s easier to run our

sales operation, for buyers it’s easier to buy impressions. It’s both cost and time efficient, everybody

should be getting the right prices.”

Trading Manager, Online Publisher


The vast majority of publishers still do some direct sales, but there is an emergence of a purely programmatic element

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Split between directsell/programmatic

Complete programmaticmanagement of all sales

“It’s not a tool to monetise remnant anymore, it’s an integral part of our total sales strategy.”

Digital Trading Director, Publisher

“It’s more of a technical issue than strategic, for example, we can’t sell the homepage programmatically.”

Head of Automated Trading, Publisher


KEY DRIVERS ARE STANDARD AND HIGH IMPACT FORMATS

The Dutch market is mature to the extent thatthe majority of panellists stated that they sell alldigital inventory, as opposed to merely non‐guaranteed inventory, programmatically.

“Inventory from all our sites as well as largepartner networks is sold programmatically.”Head of Digital Trading, Digital Network

Unlike other less mature markets, some HighImpact Formats are sold programmatically ascommonly as standard formats in theNetherlands.

Video, mobile and tablet are also catching up.


Which types of digital inventory do you sell programmatically?

“Where possible we’ve integrated rich media. Not all formats are sold programmatically yet, mainly billboards, but we’re working on it.”

Trading Director, Publisher

“I see programmatic as a way of buying, not specific to particular formats.”

Trading Manager, Publisher

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Standarddisplay

Highimpactdisplay

Video Mobile Tablet

What inventory is currently selected for programmatic?

Non-Guaranteed

22%

Guaranteed78%


NEED FOR FOCUS ON COMPLEX DATA CAPABILITIES

Data is another big focus as 56% append it to theirprogrammatic sell now, but a further 33% arecollecting data and expect to append it in the future.

Currently the majority of publishers only appendbasic data including age, gender and socio‐demographic.

In order to charge higher prices, publishers and SSPsneed to focus on appending more complexdemographic data to their sells, selling more highimpact formats and being totally transparent in theirbid reporting to encourage confidence.

The market needs to increase kinds of data used inthis way, and develop data capabilities to helppublishers collect and use it more easily.


“We’ve started looking into data capabilities, sometimes advertisers will approach us about it and if they pay more we’ll do it, but we haven’t been proactive in it.”

Trading Director, Publisher

What data is currently added to your programmatic inventory?

“We append limited audience information, basically just basic demographic data.”Head of Automated Trading, Publisher

28%24%

21%18%

6%3%

AGE

GENDER SOCIO‐DEMOGRAPHIC

INTENT

RETARGETINGINTEREST


FURTHER EDUCATION IN THE MARKET IS NEEDED

Smaller publishers, and those with a moretraditional media background, are behind in takingup programmatic because of lack of resources andunderstanding.

In order to improve programmatic adoption withinpublishers, the market needs more programmaticeducation in order to make decisions. The smallercompanies need guidance as they adoptprogrammatic strategically, and the largercompanies need mass education.

The elements holding the market back are thepublisher’s fear of cannibalisation as well as lack ofskill in both the buy and sell side. However, themarket expects these will be naturally overcome asthe market further matures.


What's lacking within your organisation to adopt programmatic in an optimal manner?

“As a newspaper it’s been hard for us to adjust, so we need the help. We don’t have the resources to bring it in-house because our sales team is small, but that’s the same reason why we will eventually benefit from it: we won’t need a huge sales team if we’re trading programmatically.”

Digital Trading Manager, Publisher

“Resource was always the problem until recently. The main problem now is that the company is large and the masses, including most sales people, still don’t really understand it.”

Head of Digital Trading, Digital Network

“It’s mainly just skills and knowledge about how we can best implement it for our publishers.”

Publisher, Publisher


The vast majority of publishers in the Netherlands(89%) have a desire to manage their programmaticstrategies in‐house, because control is extremelyimportant to them. This also suggests a high level ofconfidence and skills in the market.

The key features Dutch publishers require, includingPrivate Exchange capabilities and Bid Managementtools, amount to a high level of control – hence thestrong desire to bring management of programmaticin‐house.

Technical integration and support rank alongsiderevenue and yield upside as key factors in choosing aprogrammatic partner.


DESIRE TO MANAGE PROGRAMMATIC IN‐HOUSE

What are the key SSP features that you require? “What’s most

important are the technical integrations they facilitate. Support is also key. We’re very proactive and we ask a lot of questions so we need proactive help and support to find the correct solutions.”

MD, Specialist Digital Network

“Transparency is key, and a proactive way of working with new products like private dealing rooms.”

MD, Specialist Digital Network

Relative importance of the reasons to work with a programmatic partner

Rank Features

1Private exchange capability

2Bid managementtools

3 Bid reporting

4Brand protection tools

5Interface ease of use

6 Data plug‐in

Rank Reasons

1 Revenue

2Ease of technicalintegration

3 Yield upside

4Technical/ Sales support

5 Product features

6 Cost

“We do everything in-house, itwas never even a choice to dootherwise. We want the mostcontrol over our own network.”



FUTURE: PROGRAMMATIC TRADING ON ALL SCREENS

“In five years our sales force will be more like a marketing agency working with brands on bigger partnerships. Everything else will be RTB”


The Dutch market is advanced and confident thatprogrammatic will continue to grow.

Over a third of panellists currently get over half oftheir revenue from programmatic trading, and threequarters expect the same to be true in 12 months’time. This reflects maturity in the market now, andconfidence in its future.

Furthermore, there is expectation among publishersthat the vast majority of standard formats will be soldprogrammatically within five years, and thatexpectation is almost as high for High ImpactFormats.

Interestingly the market also expects very highproportions of their mobile, tablet and video to besold programmatically within five years, althoughthey are not at that point yet.


82%

82%

83%

83%

84%

84%

85%

85%

86%

86%

87%

Mobile Tablet Video

Percentage of your company's digital media being traded programmatically in 5 years’ time

“Everyone’s talking about mobile but no one has come up with a business model for it yet. There are yield, targeting and reporting issues. We’ve got to crack it because lots of publishers are seeing their inventory disappear onto mobile.”

MD, Digital Network

“It’s hard to predict video but if it works like standard and HIF formats it should reach high levels in 5 years’ time.”


In order for it to grow there needs to betechnical capabilities in SSPs to sell a widervariety of High Impact Formats, as well as video,mobile and tablet.


ELEMENTS NEEDED FOR FURTHER MARKET DEVELOPMENT


Increased mobile and video tech andcapabilities within SSPs.

More High Impact Formats available throughprogrammatic.

Further market education needed, especiallywithin less advanced publishers.

Strategy using more complex data is needed toincrease the amount and types of dataappended to programmatic sales.

Transparent reporting and more advanced bid tools to drive yield and a sense of control for publishers.

“Media agencies and sales houses see challenges around users’ privacy. Agencies will need to get used to new workflows, and acquire new skills and people.”

Trading Manager, Publisher

“Everyone’s talking about mobile but no one’s come up with a

business model for it yet. There are yield, targeting and reporting

issues. We’ve got to crack it because lots of publishers are

seeing their inventory disappear onto mobile.”

MD, Digital Network


Improve Digital is Europe’s leading real time supplyside platform . Founded in 2008, and now part ofPubliGroupe, Improve Digital focuses on providingpremium publishers with the technology and toolsset to monetise their inventory and audiences in aprogrammatic fashion.

With local teams located in NL, UK, DE and ES,Improve Digital powers the real time advertisingrevenue for over 100 publishers.

Improve Digital offers integrated audience and datasolutions, yield management and optimisation, fullpricing control, data protection, and Private MarketPlace access to all major DSPs and agency tradingdesks.

ABOUT FAR PARTNERS

FaR Partners is a commercial consultancy formedia companies operating on the sell side.FaR provides unique client benchmarks andmarket wide studies that help enable FaR tooptimise a clients media assets and also todevelop new revenue streams in market.

Founded in 2007 FaR helps clients across Europebuild digital media businesses, assess andbenchmark media markets and formulate thecommercial and business plans that help clientsto grow their operation.

ABOUT IMPROVE DIGITAL

For further information please contact:Angela Pellaupessy

Key Account [email protected]

+31 – 202 620 277

Bastiaan SpaansVP Business Development

[email protected]+31 – 202 620 277

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