2020 European Report on Programmatic In-Housing

2020 International Report on Programmatic In-Housing 1


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Executive Summary

  • Programmatic advertising has been on a meteoric rise. Programmatic’s share of digital ad spend worldwide is expected to grow to 68% this year. Europe is already deeply entrenched in programmatic with most European countries’ digital ad spend greater than 80%.
    • Programmatic is poised for additional growth as mobile and digital video usage continues to rise.
  • Brands desire more control over programmatic, and we are seeing a trend towards brands in-housing some or all of this function. The majority of European brands surveyed have moved some function of programmatic buying in-house. Almost a third (31%) of European organizations have completely moved this function in-house, and 43% have partially moved programmatic buying in-house.
    • Almost three-quarters of European organizations have completely or partially moved programmatic in-house, which is more than organizations in either the U.S. or Latin America.
    • In-housing of programmatic allows brands more transparency over the operation, which improves audience reach and increases cost efficiency and campaign effectiveness.
  • Within European brand organizations that have brought their programmatic in-house, most are taking a hybrid approach and partnering with an agency on some elements of the operation.
    • Many organizations are either currently working with or would consider working with a partner on technology infrastructure and campaign analysis/optimization.
    • However, there are some functions, like algorithm creation and KPI (key performance indicator) development, that these organizations prefer to keep in-house.
  • Europe was at the forefront of establishing regulations to protect consumer privacy and data. The General Data Protection Regulation (GDPR) was implemented in the EU in May of 2018 and as a result, Europe has become the gold standard in data privacy regulations.
    • While many European organizations have noted an improvement in data quality and improved consumer trust, there are still questions on how effective GDPR has been. This is likely attributed to the fact that guidelines are nebulous, and without a governance model, most organizations are struggling with what constitutes compliance.
    • There were concerns that regulations would negatively impact consumer trust of brands and limit brand profitability, yet those concerns have been largely unfounded. In fact, an unexpected benefit of regulations is that brands are now working with cleaner data. While regulations have culled down the number of customers who can be targeted, those that remain are more relevant and interested, resulting in a more effective ad spend.
  • The future of the regulatory environment continues to evolve, but the anticipated limit or disappearance of cookies and third-party data magnifies the need for companies to manage their own first-party data. Thus, the ability to implement effective programmatic advertising hinges on an organization’s ability to obtain and manage their customer’s data.
  • The digital ecosystem is constantly evolving through innovation and technological advancements, which will create new opportunities and needs within programmatic, both for brands and agencies.
  • The COVID-19 pandemic has impacted brands across the world, with many limiting or shutting down operations. As a result, short-term spend on advertising has decreased and/or been repurposed, though it is unclear what impact, if any, this pandemic may have on long-term advertising.
    • Some struggling brands, like those in hospitality or travel, have almost eliminated advertising. Others that are still operating, like grocers, Consumer Packaged Goods (CPGs) and telecommunications, are creating more relevant ads to reflect the current environment.

2020 European Report on Programmatic In-Housing


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