The research from MTM, commissioned by Ooyala, suggests that the industry is moving into a new phase of growth in programmatic, in which emphasis will shift towards quality, transparency, control, flexibility and collaboration – helping create a new equilibrium between premium publishers, advertisers and agencies.
The report shows that the US and the UK are the most progressive in adopting programmatic, currently trading 25% and 23% of all online video programmatically, respectively. Both countries see a 42% year-over-year (YoY) growth in online video. This is driven largely as both regions see large audience fragmentation and confirm programmatic is an efficient means to attain on-par reach as pre-fragmented TV audiences.
Sweden shows significant promise as it’s seen 59% YoY growth in online video with 12% of it currently sold programmatically. It has the largest growth potential, especially as Swedish audiences evenly split their time between online video consumption and traditional TV, whereas in other countries TV viewing usurps online by nearly double or more in some cases.
Germany is the laggard of the group, only trading 9% programmatically today and having the lowest YoY growth in online video at 28%. Respondents suggest there’s little pressure from the industry for change as limited key players own the majority of premium inventory in the region. Further, there’s notable rejection to adopt real-time bidding (RTB) in order to safeguard traditional models.
While YoY growth of online video in France is close to Germany at 29%, the region has adopted programmatic more rapidly, currently trading 19% of all online video. Though much of the inventory is focused on desktop or remnant, France has very progressive laws and regulations around transparency, as well as a healthy IPTV market, setting the stage for further growth and adoption for programmatic.
Meanwhile, walled-garden inventories from YouTube and Facebook are seen as a major barrier to the growth of programmatic, especially in the US and UK. Respondents see programmatic as a means to have holistic, universal buying capabilities, but restricted access to these inventories force a direct-buy situation, preventing broader adoption.
“It’s evident that programmatic adoption is on a spectrum that varies between regions, yet irrespective of the infancy or maturity of programmatic trading in a given region all executives agree that it is the future of online video advertising,” said Ooyala GM, advertising platforms, Scott Braley. “The report echoes our vision that the market is barrelling towards needing a unified and holistic means to purchase premium inventory from a single location, fully baked with the data insights, reporting and transparency that both the sell-side and buy-side demand.”
The results dovetail with recent research from IHS commissioned by video inventory management platform provider SpotX. That revealed a 38.7% YoY rise in programmatic online video advertising revenues across Europe.