Rubicon Report Shows DSPs & Automated Ad Trading Getting Traction In Europe; Ad Nets Still In Rude Health

The Rubicon Project released a comprehensive report on the state of the data-driven display space today. The report, commissioned in partnership with Econsultancy, presents strong evidence that programmatic display buying is gaining traction among the traditional display buyers and advertisers in Europe. There are lots of headline numbers you can all use in your sales decs for those upcoming sales pitches.
This could well be the biggest report done on the space – with over 400 agencies and advertisers interviewed globally. Loving the data.
Here are some headline numbers to chew over on a Friday afternoon:

– Of the 400 agencies and advertisers surveyed for the report, 23% said they are using a DSP, taking 32% of media spend.
– This is highest in the US, where 39% of the advertiser and agency respondents surveyed say they buy display advertising through DSPs.
– An average of 34% of trading desk spend goes to real-time bidding (RTB): 41% in US and 34% in Europe.

There are some reservations around agency land though – with 37% still not committing budget to RTB, and 17% not putting any media budget through the automated channel.

…the survey also reveals that 37% of responding companies say their trading desks spend less than 20% on RTB and that 17% of advertisers and agencies do not allocate any display advertising budget to their trading desks.

With all this spend going through the ad trading desk, are the ad nets in trouble? Surprisingly the ad networks are holding their own. It’s hard to gauge what is going on in the market. Anecdotal evidence suggests ad nets are starting to hurt – but they are building revenue in new areas like video and mobile. The growth in automated trading is going to hurt those arbitrage networks in the long run. But with dynamic inventory now available across Europe, there is huge opportunity for third buyers with data to build some big businesses in Europe. I subscribe to the “thousand ad networks will bloom” theory that has been articulated recently by lots of industry insiders. New demand will come into this space and the ad network will lead the charge and the model will flourish. And that for me is where the real opportunity is.
And just in case you thought the ad network was dead, here are some stats from the report showing the model remains in good health:

– The research also reveals online advertising networks are receiving an average of 55% of the average media plan, up from 31% in 2009, when Econsultancy conducted similar research.
– Evidently, online advertising networks are seen as an important part of the media mix. Of those advertisers working with ad networks, 43% say they work with at least five different ad networks compared to 30% two years ago.
– Over a third of advertisers (34%) buy from between five and ten online advertising networks – up from a quarter (23%) in 2009 – and 46% of advertisers say they are dealing with more networks than they were a year ago. This is particularly high in the US with 53% of advertisers and agencies dealing with more ad networks than they were a year ago.

The full report can be accessed here on the Econsultancy website.