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Europe's Programmatic Video Ad Revenues Will Near €2 Billion in 2020

Media owners projected to see revenues up 39% each year

October 2, 2015 | Media Buying | Video

Revenues from programmatic video ads are set to rocket in Europe during the next five years, according to a new report, "Video Advertising in Europe: The Road to Programmatic Ubiquity." Conducted by IHS for the video inventory management firm SpotX (formerly SpotXchange), the study followed initial research two years ago. Where the earlier survey covered just the EU-5—France, Germany, Italy, Spain and the UK—the 2015 edition was extended to several other markets, including the Nordics, Switzerland, and Central and Eastern Europe (excluding Russia).

Programmatic Digital Video Net Ad Revenues in Select Countries in Western Europe, 2014-2020 (millions of € and % of total digital video net ad revenues)

Because the study focuses on media owners' revenue from programmatic video advertising, not on demand-side spending, it sizes national markets by net income after costs and fees. IHS interviewed media owners, industry bodies, agencies, technology companies, advertisers and other players, combining those insights with information from its proprietary database and third-party sources to produce forecasts through 2020.

According to those estimates, programmatic video ad revenues in Europe will reach €375 million ($498 million) in 2015 and rise to €1.967 billion ($2.610 billion) by 2020—an average annual growth rate of 39.3%. This year, programmatic is expected to account for 16.8% of all video ad income in the region. In 2020, an estimated 51.4% of video ad revenues will be generated programmatically.

Of all the countries IHS investigated, the Netherlands was most advanced, in terms of the share of video ad revenues produced via programmatic; that proportion will reach 34.2% this year. The UK and France ranked second and third by that measure, with 22.8% and 18.6%, respectively, of revenues from video ads expected to come from programmatic sales in 2015.

Programmatic Digital Video Ad Net Ad Revenues in Select Countries in Europe, 2014-2020 (millions of € and % of total digital video net ad revenues)

The UK is by far the largest market, though—with net programmatic video ad revenues heading for €135 million ($179 million) this year. No other regional market will be worth more than €67 million ($89 million), the study concluded.

About the UK's leading position in the region, the report commented: "Many UK publishers have been early in building digital business models and possess strong in-house skills. ... The majority of growth in the next five years will come from broadcaster video moving to programmatic. ...Alongside this, further growth [will come] from a changing structure in the programmatic market towards private marketplaces and programmatic direct deals. The combination of strong technological literacy, a large presence of players and a lot of premium inventory means that the UK will lead the development in Europe to a diversified portfolio of programmatic transaction types. We expect the UK to slowly close the gap [with] the US, where programmatic video will exceed 60% of the video market by 2019, compared to 2020 in the UK."

eMarketer has also predicted an explosion of programmatic ad activity in the UK—though that analysis looks at advertiser outlays, not media owners' revenues. According to our first-ever forecast for UK programmatic digital display ad spending, advertisers there will invest £1.80 billion ($2.96 billion) in such ads this year—66.2% more than in 2014—and that sum will rise to £2.46 billion ($4.05 billion) in 2016.



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