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Unlike major digital publishers in France and the UK, most of those in Germany have hesitated to embrace programmatic selling of display inventory and instead are firmly wedded to traditional trading systems, as explored in a new eMarketer report, “Programmatic Advertising in Germany: Efficiencies of Automation Begin to Persuade Brands, Agencies and Publishers” (eMarketer PRO customers only).
“You really have to convince German businesspeople that this new stuff is the right thing; they prefer to look at developments and then slowly try something out,” according to Marcus Thümmler, team lead at Marin Software for product consulting in German-speaking markets (Germany, Austria, Switzerland) and Eastern Europe. Publishers in particular “didn’t just jump on the programmatic bandwagon when it first came along; they were more cautious and wanted to protect their existing business. So it’s a fast-growing market here in Germany, but it’s not the biggest one.”
This reluctance means that overall, publishers haven’t made much inventory available for automated placements of any kind. According to Florian Schadauer, business development manager at programmatic firm PulsePoint, only 30% or so of display ad inventory in Germany can currently be bought that way.
While ad tech firms and other intermediaries are increasingly offering solutions to enable programmatic buying and selling, many agencies—like the media owners they deal with—also prefer the status quo and haven’t presented such possibilities to their brand clients in a positive light. And on the whole, clients aren’t really pushing either, according to industry observers, though a number of leading advertisers have clearly taken a different view.
Hence the fairly slow uptake of programmatic options on the buy side, as well. An August 2015 survey of 100 marketing decision-makers in Germany polled by Research Now for Quantcast found that 58% bought advertising programmatically, but 71% had done so for less than two years.
Echoing concerns about the buying process, 52% of marketing decision-makers surveyed by Adform in late 2015 said marketers lacked control over their own data, and 42% said there wasn’t enough transparency about how advertiser data was used. Additionally, nearly a third said they weren’t always clear about where their ads and campaigns were run.
Whatever the hindrances to programmatic trading in Germany, future adoption is a matter of when, not if. Some sources—Bundesverband Digitale Wirtschaft (BVDW) among them—anticipate even more rapid growth in programmatic spending in 2016 than in 2015.
Pressure from top brands planning multinational campaigns will encourage that shift, as will the proven advantages of programmatic for advertisers, including better targeting at scale, higher efficiency and more precise reporting that yields deeper insights. The IAB Europe study mentioned earlier found that client demand was ultimately a more powerful driver of programmatic adoption among media owners than cost savings per se. In Germany, that influence will be crucial.
Meanwhile, Germany’s advertisers may want to rethink any preconceptions that programmatic is better suited to direct-response campaigns than brand marketing. This view may have been natural when programmatic was chiefly associated with remnant inventory available via open auctions and brand safety was much harder to guarantee. Last year, almost half (46%) of marketing decision-makers in Germany polled by Quantcast said they devoted no more than 20% of their programmatic spending to branding.
But programmatic trading gets more sophisticated every day and increasingly provides tailored branding options at lower costs than the arrangements traditionally made with media owners.
eMarketer PRO customers can view the full report here.
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