LONDON: European spending on programmatic video advertising is forecast to grow five-fold over the next five years as broadcasters build their inventory in this market.

Supply-side platform SpotX has predicted, based on a qualitative study carried out by analyst firm IHS involving 35 interviews with media owners, sales houses, agencies, technology intermediaries, advertisers and industry organisations, that the current figure of €375m will rise to almost €2bn in 2020.

By then, more than half (51.4%) of all video advertising revenue will be generated programmatically, compared to around one fifth (20.3%) today.

The Netherlands is leading the way: already programmatic video accounts for 34% total video spend there and that percentage will rise to 63%. At the other end of the scale, just 3% of video adspend in Poland is now via programmatic, but that will increase to 28% in 2020.

The UK, however, is the single biggest programmatic video market, at €135m, and currently accounts for more than one third (36%) of European programmatic video spend.

Programmatic takes only 23% of such spending in the UK today but it will be on a par with the Netherlands in five years, at 60%.

"In the UK we have seen strong initiatives from some broadcasters building a data and programmatic business," said Daniel Knapp, senior director of advertising research at IHS.

"The majority of growth in the next five years will come from broadcasters' video catch-up inventory moving to programmatic trading," he added.

More generally, SpotX expected that the significant variations in "programmatic maturity" seen in 2015 would narrow as growth in emerging programmatic markets picked up more quickly after 2018.

"Second and third mover markets will benefit from established best practices, technologies, and principles of ecosystem creation developed over time in pioneer markets, it said.

And in smaller markets, "the need for aggregation, large market shares of single companies, and cooperation between large media owners will move ad spend to programmatic mechanisms exponentially rather than incrementally".

Data sourced from SpotX, The Drum; additional content by Warc staff