The latest issue of IAB Europe’s Attitudes to Programmatic Advertising (for 2019) reports on the shifting profile of this young discipline. Here’s what you need to know.

The IAB’s research is based on a survey of 536 respondents from across 31 European markets, which took place between May and July 2019. It takes in data from a combination of advertisers (58), agencies (194), publishers (131) and ad tech vendors (153). The full report is available here.

A fast-growing market matures

Programmatic revenues have continued to increase through 2018, with 33% growth posted over the full year to reach €16.7 billion. Over 70% of display and over 50% of video inventory is now traded through programmatic. Social dominates the programmatic space, but even with this massive segment of spend subtracted, non-social revenues grew 26.6% to €5.5 billion.

In-housing now the norm

A majority of publishers (65%) now have an in-house model up from 50% last year. Agencies with trading desks grew six percentage points to 66%.

While the proportion of advertisers with in-house capabilities has remained at 38% in 2018 and 2019, that number is now significantly higher than the number that outsource to an agency (24%).

Notable also is the rise of programmatic consultants to help refine strategy rather than execution. “Where advertisers have previously worked with independent trading desks or DSPs, they are now aligning with consultancies,” the report found. “Advertisers using consultancies for programmatic buying was 0% in 2018, rising to 7% in 2019.”

Brand safety, transparency, and effectiveness remain concerns as talent improves

Over a third (34%) of advertisers cite brand safety as a barrier to investment, a 10 percentage point increase on 2018. And advertiser concern over supply chain transparency has increased to 38%, up from 35% last year.

Meanwhile, brands also seem to be worrying about measurement, with 41% citing ‘having a clear understanding of the impact of programmatic trading on total revenue”.

In contrast, hiring people with the right skillset in programmatic trading has decreased as a barrier for advertisers, from 32% in 2018 to 24% in 2019, although it continues to constitute a significant barrier for other stakeholder groups.

The prize is now data, not cost savings

For buyers, just as in 2018, data remains a key driver for investment in programmatic, along with the ultimate use of that data – targeting efficiencies.

However, for what has traditionally been a performance medium, buy-side stakeholders are beginning to recognise programmatic as a means of delivering brand building messages at scale, with 55% of advertisers citing this in 2019, up from 27% in 2018. The IAB suggests this may reflect the increase and ease of video inventory accessibility as well as more premium inventory being traded programmatically.

That said, the top three metrics used by advertisers remain focused on programmatic’s performance chops. Exactly half of advertisers look for sales KPIs, followed by purchase intent (25%), and brand awareness (21%). It is the second consecutive year that both advertisers’ and agencies’ core focus for programmatic campaigns has been sales KPIs, which have supserseded viewability’s top spot.

Ads.txt is big with publishers, but buyers aren’t yet buying

The establishment of ads.txt has been one of the industry’s major initiatives to improve the quality of inventory, creating a public record of authorised exchanges of a publisher’s inventory and making it much harder to sell counterfeit versions. And yet just 6% of advertisers and 26% of agencies are buying more than 81% of verified ads.txt verified; this is despite a significant percentage of both buy-side stakeholders being concerned with the levels of fraud and brand safety.

Among publishers, adoption is much higher, with 56% of them selling the majority (more than 81%) of their inventory with an ads.txt file attached. This suggests that the ads.txt inventory exists but more buyer education and adoption is required.

Sourced from IAB Europe