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Table of Contents
MAKING DISPLAY ADVERTISING SIMPLE, RELEVANT, REWARDING
Adform RTB Trend Report Europe
I. EXECUTIVE SUMMARY.............................................................................................................
II. PROGRAMMATIC AD SPEND.................................................................................................
III. CPM...............................................................................................................................................
IV. CTR................................................................................................................................................
V. ENGAGEMENT............................................................................................................................
VI. CPC................................................................................................................................................
VII. CONVERSIONS...........................................................................................................................
VIII. DAY OF THE WEEK....................................................................................................................
IX. ABOVE/BELOW-THE-FOLD.....................................................................................................
X. A LOOK FORWARD...................................................................................................................
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Executive SummaryOnce again, programmatic trading accelerated throughout Europe. Overall, programmatic ad spending increased 16% from 2Q14 to 3Q14, and year-over-year growth topped 200% from 3Q13 to 3Q14. September 2014 saw rapid growth, with spending 233% higher than September 2013.
Though desktop inventory continues to attract the majority of the marketer’s budget (73% in 3Q14), mobile and tablet have once again experienced spectacular growth. From 3Q13 to 3Q14, mobile and tablet spending leapt 591% and 385% respectively.
Spending on rich media increased 161% from 2Q14 to 3Q14, with September driving nearly all of that growth. The breakdown of spending in open ad exchanges vs. private marketplaces remained largely the same.
Programmatic CPMs continue to grow, delivering a 21% increase from 3Q13 to 3Q14. High-yield formats, such as rich media and in-stream video, are largely responsible for the growth, with rich-media ad formats earning prices that are 152% higher than standard banners. Of the ten top-earning banner formats, video banners reign supreme, earning CPMs that are 4x higher than the group’s average, and represent a bright spot for publishers seeking to boost their overall programmatic yields. Not surprisingly, CPMs for inventory in private exchanges are 4x higher than the average CPMs realized in the open exchanges.
We continue to see interesting trends in CPMs by device type. Tablet and mobile inventory earn the highest prices, and are 93% and 22% higher than desktop inventory respectively. CPMs for desktop inventory increased by 18% from 3Q13, most likely due to the proliferation of video and rich-media ad formats. Mobile CPMs decreased by 20% during the same time frame, which may be a result of greater supply and decreasing demand as marketers migrate to tablet campaigns. The real story is the tablet, which saw a 95% increase in CPMs from this time last year. In all likelihood, marketers value tablet campaigns due to the strong combination of high engagement and click-through rates, and a screen size that allows them to leverage high-impact ad formats. Additionally, consumers tend to use their tablets during non-working hours, when they have more time to engage with ads.
In terms of performance, programmatic CTR jumped 27% from 2Q14 to 3Q14, with most of that growth occurring in August. Throughout the year, CTR climb steadily, delivering a Y0Y increase of 30%. CTR is highest on tablets, followed by mobile phones and desktop, and CTR for rich-media banners is 222% higher than it is for standard ones.
Engagement metrics delivered a mixed bag from 2Q14 to 3Q14. For instance, the engagement rate increased by 34% compared – no doubt due to the high-impact creatives that rich-media and in-stream video banners can accommodate.
Executive Summary
MAKING DISPLAY ADVERTISING SIMPLE, RELEVANT, REWARDING
Adform RTB Trend Report Europe
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Executive SummaryAdform RTB Trend Report Europe
MAKING DISPLAY ADVERTISING SIMPLE, RELEVANT, REWARDING 2
At the same time, engagement time decreased by 3%, though the average engagement time, at 14 seconds, is still quite impressive. Not surprisingly, the engagement rate for rich-media formats is 158% higher than rate for standard ones, although standard banners deliver an average engagement time that’s 7% higher than rich-media banners.
There’s good news in terms of performance for both advertisers and publishers: the cost-per-click (CPC) in 3Q14 is 7% lower than it was in 3Q13. This means that while CPMs are on the rise (benefiting publishers), the advertiser’s cost-per-click is actually decreasing. This is a clear sign that marketers are gaining expertise in executing and optimizing programmatic campaigns.
In terms of conversions, rich-media banners deliver 100% more conversions than all other banner types, with standard rich-media banners generating the highest number of post-click conversions. In some cases, we see an inverse relationship between CTR and conversion, which is probably due to the unique nature of each format type.
Looking across the days of the week, spending and requests still seem to be out of synch with consumer responsiveness, as measured by CTR. CTR escalates 7% on Saturday and Sunday, the days when both spending and requests are at their lowest.
Above-the-fold inventory still offers better value than impressions below it, as measured by CTR and CPC. CPMs for inventory above the fold increased by 6% from 2Q14 to 3Q14, which may be due to the increase in overall spending, and consequently, more competition for impressions. CPMs for impressions bellow-the-fold also increased (7 %). CPC for above-the-fold impressions decreased by 14%; CPC for below-the-fold impressions declined by just 1%.
Programmatic Ad Spend
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Programmatic Ad SpendProgrammatic ad spend continues its upward trajectory, with year-over-year growth (3Q13 to 3Q14) in the EU topping 200%. Despite relatively flat spending in July and August, 3Q14 delivered a 16% increase, thanks in large part to strong growth in September (which was 233% higher than in September 2013!).
Certain regions experienced stronger growth. For instance, the Nordic countries saw a 164% boost in programmatic spending, while Germany, Austria, and Switzerland together saw an increase of 498%. Spending in Belgium, the Netherlands and Luxembourg grew by 83%.
While desktop inventory continues to attract the lion’s share of spending, budgets for mobile and tablet inventory are experiencing rapid growth. Year-over-year spending on inventory increased 158% for desktop, 591% for mobile, and 385% for tablet.
Spending on programmatic rich media grew steadily throughout 2014, and reached new heights in September 2014. Thanks to September’s strong growth, spending on rich media increased 161% from 2Q14 to 3Q14.
Overall, we’ve seen little change (1%) over the past quarter of programmatic spending in private exchanges (28% total) vs. spending in open ad exchanges (72%).
Programmatic Ad Spend
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Trend chart
Programmatic spend increased by 200% throughout Europe the last 12 months
Q3 2013 vs. Q3 2014
Programmatic spending leaped a staggering 223% from Q3 2013 to Q3 2014
July August September
13 Q3 14 Q3
Apr-14
May-1
4
Jun-14
Jul-14
Aug-14
Sep-1
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Oct-13
Nov-13
Feb-1
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Jan-1
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Dec-1
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Mar-1
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Programmatic Ad Spend
MAKING DISPLAY ADVERTISING SIMPLE, RELEVANT, REWARDING
Adform RTB Trend Report Europe
Growth country by country
Growth across all markets: Worth noticing, Nordics: 164%; Germany, Austria and Switzerland: 495%; Spain 532% and Poland with 800%
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Trend chart Programmatic Rich Media
Programmatic Rich media have increased with 461% since January
Slov
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Aug-14
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Feb-1
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May-1
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Apr-14
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Jun-14
Desktop Mobile Tablet
RTB StandardBanners
ProgrammaticRich Media
July-14 August-14 September-14
86%
14%
84% 83%
Rich Media vs. Standard Formats
At the end of 2Q14, rich-media inventory accounted for 14% of all programmatic ad spend; by the end of 3Q14, it increased dramatically, accounting for 17% of all ad spend.
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Programmatic Ad Spend
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Adform RTB Trend Report Europe
Split by Device Type
YoY Growth in Spend by Device: Desktop (158%), Mobile (591%), Tablet (385%)
2014 Q32013 Q3
16% 17%
86% 73%
14%
13%8%6%
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Programmatic Ad Spend
MAKING DISPLAY ADVERTISING SIMPLE, RELEVANT, REWARDING
Adform RTB Trend Report Europe
Take-Aways
September appears to be an important month for programmatic budgets, most likely due to the back-to-school shopping season, which leads into the holiday season. Marketers are wise to lock-in campaigns early to ensure access to programmatic inventory.
The keen interest in tablet, in-stream video and rich-media inventory represents prime opportunities for publishers, who can attract premium advertisers by mobilizing their websites to increase their available inventory, as well as supporting a full range rich-media ad formats.
The shift away from open auctions to private marketplaces will generate higher revenues for publishers, and will prompt them to offer programmatic access to greater quantities of their premium inventory.
Strong growth in programmatic spending in Germany, if sustained, will most certainly drive up overall spending for the continent.
Open market Private market
Media spend Open Market vs Private Marketplace
2014 Q32014 Q2
73% 72%
28%27%
CPM
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CPMCPMs continue to grow, offering good news to publishers and the industry as a whole. From 3Q13 to 3Q14, CPMs are up 21%, driven in large part by high-yield formats, such as rich media and in-stream video. In fact, rich-media ad formats earn 152% higher CPMs than standard ones.
Not surprisingly, CPMs were relatively flat during the summer holiday months, but picked up substantially in September. We can expect the increase to continue as the back-to-school season gives way to the holiday shopping season.
Of the ten top-earning banners, in-stream video is the clear winner, earning CPMs that are 4x higher than the group’s average.
CPMs in 3Q14 for inventory purchased via private marketplaces are 4x higher than those earned in the open market. The higher prices are driven by the premium nature of the impressions and the exclusivity of the buying model.
Tablet and mobile inventory earn the highest CPMs, and are 93% and 22% higher than desktop inventory respectively. The higher prices illustrate the advertiser’s belief that these devices provide an immediate link to the consumer.
CPMs for desktop inventory are 18% higher than they were in 3Q13, most likely due to the proliferation of video and rich-media ad formats, which command higher prices. Mobile CPMs decreased by 20%, which may be a result of an increasing amount of supply and decreasing demand as marketers migrate to tablet campaigns. The real story is tablet, which saw a 95% increase in CPMs from this time last year. In all likelihood, marketers value tablet campaigns due to the strong combination of high engagement and click-through rates, and a screen size that allows them to leverage high-impact ad formats. Additionally, consumers tend to use their tablets during non-working hours, when they have more time to engage with ads.
CPM
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Q3 2013 vs. Q3 2014
Trend chart
CPM increased by 21% during since Q3 2013
2013 Q3 2014 Q3
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Open Market vs. Private Market:
Private market CPMs 4x Higher
Average of CPM
Open market
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Private market
CPM
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Top 10 Formats Sizes in Terms of CPM: In-Stream Video is Clear Winner
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video
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CPM per Device Type
Desktop: +18%; Mobile: -20%; Tablet: +95%
Mobile
13 Q3 14 Q3
CPM
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CPM by Banner Type
Rich Media(without video)
Standard Video
Desktop Mobile Tablet
CPM
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Rich Media vs. Standard banners
Rich-Media CPMs are 152% higher
Take-Aways
There is plenty of good news for publishers seeking to boost their overall programmatic yields. Video, tablet and mobile ad units drive CPMs higher, as do exclusive deals executed in private marketplaces. Rich-media banners earn 152% higher than standard ones.
In-stream video is clearly hot among advertisers, who are willing to pay 4x higher CPMs for those ad units. With such strong demand, publishers are wise to increase the amount of available video inventory to the programmatic market.
The high prices paid for tablet and mobile inventory should prompt publishers to mobile-ready their sites in order to offer a greater abundance of these ad units.
Advertisers clearly believe that mobile and tablets are a direct link to the consumer, and compete to acquire these ad units. CPMs paid for tablet inventory are 93% higher than desktop.
RTB StandardBanners
ProgrammaticRich Media
CTR
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CTROver the past year, CTR rates traveled a bumpy road, but on the whole, continued to climb, growing 30%. The CTR rate for 3Q14 is 30% higher than in 3Q13. In August 2014, CTR reached new heights, driving a 27% increase from 2Q14 to 3Q14. The boost in CTR is all the more remarkable given that branding campaigns, which are increasing in number, typically aren’t optimized for the metric.
CTR is highest on tablets, followed by mobile phones and desktop. The strong performance on tablet may be explained by the larger screen sizes, which enable marketers to deliver high-impact ads, as well as the fact that consumers tend to use them during non-working hours, and have the time to respond to marketing messages. Mobile phones deliver stronger CTR than desktop, though the smaller screen size may inhibit clicks.
CTR for rich-media banners is 222% higher than the CTR for standard ones, proving the value of high-impact ads in campaign performance.
Trend chart
CTR% increased by 30%
July August September
13 Q3 14 Q3
CTR
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Rich Media vs. Standard banners
Rich Media delivers 222% better performance
Performance by Device Type
Tablet and mobile deliver up to 100% better performance when looking at CTR%
StandardBanners
ProgrammaticRich Media
Apr-14
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CTR
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Top 10 Formats Sizes in Terms of CTR: Video in-steam 23x CTR
Take-Aways
Rich-media banners are proving quite effective for performance campaigns.
In-stream banners may be higher priced, but the stellar CTR more than compensates for the costs. Marketers seeking strong performance should consider these ad units for their campaigns. Publishers seeking to maximize yields on programmatic sales are wise to offer as much in-stream video banners as possible in the RTB markets.
Tablets deliver the highest CTR of all the device types, and represent excellent opportunities for marketers to engage consumers at the times when consumers are most inclined to respond to ads.
336x280
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video
970x250
930x180
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0%
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Engagement
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EngagementEngagement metrics delivered a mixed bag from 2Q 14 to 3Q14. For instance, engagement rate (i.e. the rate at which consumers engage with an ad) increased by 34%, yet engagement time decreased by 3% during that same timeframe. That said, the average engagement time is still an impressive 14 seconds, and is a clear indication that consumers are noticing ads, particularly the high impact rich-media and video formats.
Not surprisingly, the engagement rate for rich-media formats is 158% higher than the rate for standard ones. At the same time, the standard banners deliver an average engagement time that’s 7% higher than the time spent with rich-media banners. This may be explained by the presence of in-stream video in standard banners.
Engagement rate Q3 2013 vs. Q3 2014
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Engagement
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Engagement time (sec)
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Engagement Rate%: Rich media vs. Standard formats
Rich-media 158% Higher than Standard
Programmatic Rich Media RTB Standard Banners
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Engagement
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Engagement time (sec): Rich media vs. Standard banners
Take-Aways
Engagement rates are on the rise, no doubt driven by the high impact rich-media and video formats now available. These formats enable advertisers to create experiences that captivate consumers.
The high engagement rate for rich media makes programmatic an excellent vehicle for branding campaigns.
Though engagement time has decreased slightly, the EU average is still an impressive 14 seconds, giving advertisers ample time to get their messages across.
Programmatic Rich Media RTB Standard Banners
CPC
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CPCThere’s good news for both advertisers and publishers alike: the cost-per-click (CPC) in 3Q14 is 7% lower than it was in 3Q13. So while CPMs are on the rise (benefiting publishers), the advertiser’s cost per lead is decreasing.
This decline may be due to the inherent efficiencies of programmatic, combined with the buyer’s increasing sophistication with executing and optimizing programmatic campaigns.
Trend chart
Average CPC declined 7% from Q3 2013 to Q3 2014
Apr-14
May-1
4
Jun-14
Jul-14
Aug-14
Sep-1
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Oct-13
Nov-13
Feb-1
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Jan-1
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Q3 2013 vs. Q3 2014
CPC is 7% lower in 3Q14 Compared to 3Q14
13 Q2 14 Q2
July August September
CPC
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Take-Aways
The declining CPCs are a strong indicator of programmatic’s efficiencies. Clearly, the tactic is an excellent way to execute lead-generation campaigns.
Given the measurable declines in CPC, marketers are wise to optimize their performance campaign on the metric.
Face
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Rich M
edia
Conversions
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ConversionsThis quarter we looked at conversion rate by banner type. Rich-media banners deliver 100% more conversions than all other banner types, and of the rich-media ad formats, standard rich-media banners generate the highest number of post-click conversions.
In some cases (e.g. in-stream video), we see an inverse relationship between CTR and conversions. This may be due to the types of campaigns that utilize these formats. For instance, brand marketers seeking to raise brand awareness – as opposed to selling a specific product – favor in-stream video banners. Another possible reason for low in-stream video conversions may be due to the fact that the pre-roll is the dominate format, and consumers aren’t inclined to click on the ads and covert prior to watching their desired video content. The impact of in-stream video ads on conversions may best be measured using an attribution model.
Across verticals, pets, sports and shopping delivered the most post-click conversions.
Conversion by Banner Type
13 Q3 14 Q3
Take-Aways
The standard rich-media ad format is the workhorse of campaigns, delivering strong conversions (as well as CTR and engagement time rates). Marketers should consider this format when conversions are a primary campaign goal.
Q3 2013 vs Q3 2014
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Conversions
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Day of the week
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Sum of Spend Total Average of CTR
Mon Tue Wed Thu Fri Sat Sun
Day of the weekEven though RTB traffic (i.e. the level of inventory publishers send to the ad exchanges for monetization) is quite steady throughout the entire week, programmatic buying slows down significantly during the weekend. At the same time, weekend CTR is 7% higher than it is on weekdays.
Spending and requests still seem to be out of synch with consumer responsiveness. Advertisers continue to focus their spend during weekdays, perhaps because they prefer to spend budget while they’re available to optimize their campaigns. However, it means that budget is spent when consumers have the least amount of time and attention to interact with ads.
Spend per day vs. CTR%
Take-Aways
Advertisers should consider increasing spending during the weekends, when consumers have more time to focus on new products and services. Automated optimization can help them target their ideal audiences.
Day of the week
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Q3 2013 vs Q3 2014
Sum of Requests Average of CTR
Mon Tue Wed Thu Fri Sat Sun
2014 Q2 2014 Q32014 Q2 2014 Q3
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Above/Below the foldCPMs for inventory above the fold increased by 6% from 2Q14 to 3Q14, which may be due to the increase in overall spending, and consequently, more competition for impressions. CPMs for impressions bellow the fold also increased (7 %).
Although costs for below-the-fold inventory are 30% less than impressions above it, marketers concerned with performance should be wary of them. CTR for impressions above the fold increased by 23%, while those below it grew by just 9%.
CPC, the true measure for campaign effectiveness, also points to above-the-fold impressions as the best option for driving campaign performance. The CPC for above-the-fold impressions decreased by 14%. Meanwhile, the CPC for below-the-fold impressions decreased by just 1%.
Above Below
2014 Q2 2014 Q3
Above Below Above Below
CPM CTR CPC
Take-Aways
For performance-based campaigns, particularly those with CPC or ROI goals, above-the-fold impressions are the smarter option.
Above/Below the fold
A LOOK FORWARD
“Year of the Tablet”
According to a 2014 Gartner Group report, 2015 will be the “the year of the tablet,” with consumers snapping up some 321 million tablets. The widespread adoption of tablets, combined with their convenient form factor and mindshare of the consumer, marketers will focus more heavily on tablet campaigns.
Brand-Awareness Mobile Campaigns
Video, rich-media and native advertising work well on mobile and tablet devices, and will be used by brand marketers to raise awareness of their brands. We may see less focus on performance-based campaigns, particularly those targeting the small-screen smartphones.
More Brand Campaigns
An abundance of rich-media ad formats will attract more branding campaigns to the programmatic channel, which will increase the ad spend both in the open exchanges and well as private exchanges.
In-Stream Video Storytelling
As the industry makes progress towards creating unified views of consumers as they cross screens, sequential messages – i.e. branded storytelling – will proliferate. In-stream video will play a dominant role in the storytelling.
A Look Forward
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