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Programmatic video spend to hit €2bn

Programmatic video advertising will grow five-fold to hit €2bn across Europe in the next five years as media owners, including traditional broadcasters and publishers, seek to improve their monetisation strategies, according to research.

SpotX, a supply-side platform (SSP) that is majority-owned by Europe’s largest broadcaster RTL, has forecast that media spend on programmatic video advertising will grow from €375m this year to hit €2bn in 2020, based on a qualitative study from analyst firm IHS.

The SSP, which recently rebranded from SpotXchange, has also claimed that the UK currently generates over a third of all programmatic video spend across the continent where almost a quarter (23 per cent) of all digital video ads there are bought in such a fashion, with a market value of €135m.

This makes it the biggest market for programmatic video with its market value estimated to hit €602m by 2020. Other leading markets for programmatic video include the Netherlands, where programmatic accounts for 34 per cent of total video spend, and France 19 per cent of digital video ads are traded in such a fashion.

Mike Sheehan, SpotX, CEO, said the European programmatic video ad market was worth €22m in 2012, and had grown exponentially since due to media owners from the traditional publishing and broadcasting sectors looking beyond display advertising to better monetise their inventory.

Daniel Knapp, IHS, senior director of advertising research, said the UK is the leading market for programmatic video ad spend in the region, adding that media owners there are particularly keen to trade their premium inventory in such a fashion, as opposed to manually selling them directly to advertisers.

He added: “We expect the UK to slowly close the gap to the US, where programmatic video will exceed 60 per cent of the video market by 2019, compared to 2020 in the UK.

“In the UK we have seen strong initiatives from some broadcasters building a data and programmatic business. The majority of growth in the next five years will come from broadcasters’ video catch-up inventory moving to programmatic trading.”

The study, entitled ‘Video Goes Programmatic: Forecasting the European Online Video Advertising Landscape’, reflects media owners embracing such technologies, as well as alternative trading models to the traditional direct-selling, and auctioning models.

This includes ‘programmatic direct’ deals where media owners trade inventory with advertisers in an automated fashion via private market places (PMPs). Last week, SpotX that PMP’s account for over 40 per cent of the impressions managed on its platform during the first half of 2015. This equated to a growth rate of 112 per cent from a year earlier, with mobile video spend growing 800 per cent in the 12 months to Q2 2015.

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