“Video programmatic revenue in Europe has grown from 22m in 2012 to 375m in 2015, and is set to reach 1.967 billion euros by 2020”, according to a new report by IHS titled: “Video Advertising in Europe: The Road to Programmatic Ubiquity.”
This year, programmatic is expected to account for 16.8% of all video ad income in Europe. In 2020, an estimated 51.4% of video ad revenues will be generated programmatically, as reported by the IHS study.
Revenue Generated by Programmatic Video
The share of video revenue generated programmatically differs widely between European markets. The Netherlands takes the top spot with over 34,2% of Video ad revenue being generated programmatically, followed by the UK and France, with 22.8% and 18.6% respectively.
By contrast , markets like Belgium, Austria and Poland currently generate less than 10% of their video ad revenue from programmatic. However, IHS’ report anticipates that growth in emerging programmatic markets will pick up dramatically by 2018, resulting in more uniformity between markets by 2020.
The UK takes the top spot in terms of market size, with a NAR (Net Advertising Revenue) of 135m euros in 2015. All other markets generate below 10m euros. This gap in absolute NAR is attributed to the different sizes of the markets and their internet population, as well as changes in media consumption.
The Dutch Programmatic Video Market
The Netherlands is considered to be a hotbed for innovation in all things digital, and is presently the European leader in programmatic video.
According to IHS’ report, the majority of Dutch broadcasters generate revenue from programmatic video advertising. In 2015, It is expected that 34.2% of all video advertising revenue in the Netherlands will be generated programmatically, and that figure is expected to rise to 63.3% in 2020.
As stated in the report, the rise of programmatic video in the Netherlands “was helped by a market depression in 2012, when the online video advertising market actually declined and budgets moved back to linear tv due to low tv cpm and questions about video advertising efficiencies.“The video advertising CPMs had bottomed out, and publishers embraced programmatic to successfully bring them up again.” The success was underpinned by the strong programmatic literacy in the market and its performance-driven culture.
Outlook for the future
Programmatic advertising is becoming ubiquitous in Europe, but it is unlikely that programmatic video will generate more than 65% of total video advertising revenue in the long-term, since premium direct sell is still the standard in brand advertising.
In terms of absolute size, video will emerge as the largest programmatic category in Europe as it continues to capture a larger part of the advertising budget formerly reserved for traditional TV ads, surpassing banner display.
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