A German View of Programmatic
Has Germany missed the boat when it comes to programmatic advertising – or is it actually a vast growth opportunity? Paco Panconcelli, MD Quantcast Deutschland argues for the latter.
Each year Germany hosts dmexco, the world’s largest digital marketing conference, boasting hundreds of speakers and exhibitors, and attracting thousands of visitors. Programmatic advertising is always top of the bill, but this year it occurred to me that despite being the hosts of the world’s largest ad tech event, Germany has actually not been as quick to adopt programmatic technology – something that I anticipate working in our market’s favour.
If we look at the figures, Magna Global predicted earlier this year that programmatic penetration in the UK will reach 59% by 2017, but just 33% for Germany. On the other hand, towards the end of last year, Forrester predicted that between now and 2019, the UK online display advertising market will see the slowest growth in Europe, whereas Germany will remain the second largest market.
What this says about Germany is that it’s been a slower market to mature, but the potential for growth across the online display advertising market is vast – and it’s something we should be incredibly positive about. We’ve had the opportunity to learn from fast-growth markets like the US and UK, and build into our market and technology the kind of transparency and functionality that we know is crucial to advertisers in the region. We’re working under an understanding that, rather than being a pioneer that adapts and tries new technologies, there is a tendency to favour mature and workable solutions. Culturally, Germany is a business environment that puts great emphasis on analysis and proof of concept before adopting new technologies. On the other hand, German business relationships are characterised by a great sense of loyalty and longevity.
We’re now at a tipping point, with the right tech in place and a positive view of the potential of programmatic. A recent study we conducted revealed that 58% of German marketers and advertisers are already investing into programmatic – not only to increase revenue but also for brand purposes. This is because there’s an increased understanding of the fact that programmatic advertising is a more accurate and efficient way to tailor advertising messages to consumers, and that the potential of this sits outside of retargeting alone.
So, what is going to help the German market capitalise on this opportunity?
The main drivers behind an increase in the programmatic market share in Germany will be continuing to take the concerns of our agencies and brand advertisers seriously; and working on building a network of experts that can help educate the industry. It’s something that’s already having a marked effect, and continuing with this approach will ensure that newer technology is adopted with increased confidence. Once we’re all speaking the same language, we’ll be in a better position to work together to find new solutions as our industry continues to get turned upside down by the rapid pace of change in consumer technology.
As we look to the more developed programmatic markets, it’s clear that establishing new measurement and market standards should be top of mind. It’s to the benefit of all parties to understand what works and what doesn’t – not least because this will depend brand-to-brand and advertiser-to-advertiser, but also to ensure that all new tech delivers quality and meets its to the market.
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