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Rubicon Project Announces Global Research into the Online Advertising Market

64% Of Advertisers And Agencies Increasing Spend On Online Display Advertising; Investment Especially Strong In US, France And The UK.

 Rise Of RTB And Private Marketplaces – Average Of 40% Of Display Advertising Spend Is Traded Through RTB And 19% Of Advertisers Have Established Private Marketplaces

Los Angeles / London / Paris / Hamburg  – 18 September, 2013 – Online advertising is growing around the world according to research conducted by Econsultancy on behalf of The Rubicon Project, Inc., which operates the advertising industry’s largest independent real-time trading platform for digital advertising.  Sixty-four percent of advertisers and media agencies surveyed declared they have increased their spend on display advertising online in the last year.  In the US, 77 percent of advertisers and agencies have increased their investment in display, a figure that rises to 88 percent in France, 63 percent in the UK and 62 percent in the APAC region.

This is the third time that Rubicon Project has commissioned this research from Econsultancy, and display investment has grown with each successive survey up from 58 percent in 2011 and 57 percent in 2009.  In 2009 a quarter of those surveyed revealed a decrease in spend, but this has reduced to 14 percent for the past twelve months.  Almost half of the respondents in Europe have seen an increase in the price of display advertising and two-thirds of advertisers and their agencies in APAC have seen an increase.  However, 29 percent of the advertisers and agencies surveyed in the US believe the cost of display has declined.

Spend on Facebook advertising, paid search marketing (PPC) and the Google Display Network (GDN) is also up, although 12 percent of respondents have decreased their investment in the Google Display Network.

The Rise Of RTB, Trading Desks And Demand-Side Platforms (DSPs)

The research reveals the continued growth of automated trading with 39 percent of the advertisers and agencies surveyed buying display advertising through DSPs.  This is up from 23 percent in 2011.
Improved performance is given as the main advantage of real-time bidding by two-thirds of the advertisers and agencies surveyed, which was also the main advantage in 2011 identified by 48 percent of those surveyed.  Reduced media wastage, lower cost-per-acquisition and better targeting capabilities also score highly, which also reflects the responses from two years ago.

An average of 40 percent of the trading desks’ spend is via RTB, although these numbers are much higher in France (73 percent) and lower in Germany (24 percent).  This is a big change from 2011 when the survey revealed that an average of only 34 percent of trading desks’ spend was allocated to RTB—with 41 percent in US and 34 percent in Europe.

‘Fewer points of sale’ is highlighted as a key benefit of working with a DSP by 41 percent of respondents, up from just one fifth of respondents two years ago.  The following benefits are each identified as a key benefit by more than half of those questioned:

  • Improved targeting
  • Real-time understanding of campaign performance
  • Ability to buy at impression level
  • More efficiency
  • Increased reach

Thirty-seven percent identify ‘global frequency caps’ as a benefit and this is expected to grow as more global campaigns are managed centrally.

The Growth Of Private Marketplaces, Especially In Europe

A fifth of the agencies and advertisers surveyed have implemented private marketplaces, with a further 40 percent planning to do so.   This trend is particularly pronounced in the UK, and also in France where three quarters of agencies have implemented a deal.  In APAC, 18 percent of advertisers and agencies have implemented private marketplaces and another half plan to.   In contrast, only a tenth of the buy-side in Germany have created private marketplaces, although more than half of those surveyed are planning to.  On a global scale, over a third of advertisers expect to increase their spending on private marketplaces by between 26-50 percent in the coming year.

Forty-two percent of ad planning and buying is based on first party data in their planning and buying—which is likely to be retargeted advertising—and 31 percent of planning and buying is based on third party data. Advertisers in the US are most likely to use first party data, although one in four campaigns there are planned with no data at all.

Jay Stevens, General Manager of International, Rubicon Project, explains, “All of us who work in advertising have seen the dramatic rise of programmatic trading around the world over the past few years.  This research reveals that more than a third of advertisers are buying online display advertising through Demand-Side Platforms, benefiting from improved targeting, reach and efficiency and fewer points of sale and global frequency caps are also highlighted as advantages suggesting more media will be traded on a global basis over the coming years.  Automated trading for direct response campaigns was quick to take off in the US, but adoption of the private marketplaces and programmatic premium has been faster in Europe, especially in the UK and France.  Most international markets, including Australia and the Nordics, have adapted the RTB protocol work most effectively and efficiently for them.”

Stevens continues, “The research also reveals the growth of private marketplaces, especially in Europe.  Twenty  of the advertisers we surveyed around the world have implemented a private marketplace, but this figure rises to three quarters in France, a market where there are more sophisticated independent trading desks and media innovations such as La Place Media, a collective of several leading publishers making their inventory readily available for programmatic trading and educating the market on the possibilities for impression-level targeting, increased reach and maximum return on investment.”

Marco Bertozzi, Executive Managing Director/ EVP, VivaKi EMEA comments, “Now in our fifth year at Audience On Demand, we are still seeing growth rates of over 100 percent year-over -year for RTB spend. The development in sophistication from publishers, agencies and advertisers around RTB in general, and private marketplaces in particular, means that the real benefits are now being exploited in delivering these growth numbers. It is the most exciting space in digital and will soon stop being a channel and become the delivery and targeting mechanism for all digital with Facebook, Twitter and others embracing the technology.”

Linus Gregoriadis, Research Director at Econsultancy, adds, “The online display advertising industry continues to develop at breakneck speed, with programmatic trading much more established globally than it was two years. The increasing budgets for online display advertising shown in the research are a reflection of the improved efficiencies and of the better opportunities for advertisers to reach the right audience.”

The Proliferation Of Demand-Side Platforms (DSPs) And Advertising Technology

Most trading desks use two or three DSPs, with a further 16 percent using more than four. These numbers have stayed consistent since the last time the research was conducted.  Liquidity (lack of available inventory) is described as a challenge of working with DSPs by two thirds of those surveyed around the world, up from 54 percent in 2011.

Service levels are also an issue for nearly half of the agencies and advertisers surveyed, down from 51 percent in 2011, and under-delivery of campaigns has reduced from being cited as a challenge by 49 percent of agencies in 2011 to 45 percent in 2013 as the amount of inventory on the market available for programmatic trading climbs around the world.

Seventy-four percent of the advertisers and agencies surveyed are still buying advertising from online advertising networks, and 39 percent from sales houses and rep firms.  This demonstrates that buyers are using a wider range of technologies.  These numbers are increased from two years ago when 63 percent said they buy on ad networks. Over the years the research has charted the continued growth of this sector.
Commenting on the research Fabien Magalon, Managing Director at La Place Media, explains, “The French online display advertising market has seen a fantastic quality leap over the last twelve months.  First on the sell side, with the launch of La Place Media, and the Orange Adexchange, followed by the buy side with more and more advertisers investing increasing amounts on brand advertising on our La Place Media inventory.

RTB gives the market the ability to package inventory with first party data through Deal ID, which has allowed La Place Media to drive significant increase in our average CPM’s compared with the open auction.

La Place Media has been using Deal ID intensively for the past nine months as a key element of our sales strategy.  The CPMs we derive using Deal ID increase an average 5X over those from open auction.”

This is Econsultancy’s third Online Advertisers Survey Report, produced in association with Rubicon Project.  The study, supported by the IAB UK and AOP, follows similar research carried out first in 2009 and followed in 2011, and is based on a survey of over 1,000 online advertising professionals carried out in August 2013.   This report is specifically focused on results from more than 650 advertiser and agency respondents. A copy of the full report can be downloaded here.

For further information please contact:

Joanna Burton
Rubicon Project
JBurton@rubiconproject.com
Tel +44 20 3206 2427