The Virtual Programmatic Day: All you need to know

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On the 9th of November, IAB Europe's H2 2022 Virtual Programmatic Day took place.

The event gathered industry experts in panel discussions to analyze the latest trends, drivers, and barriers influencing the European programmatic industry. In addition, the latest buy-side and sell-side drivers, the cookieless environment, new digital formats, and what to anticipate for 2023 were discussed. 

So as the industry grows, what should you keep in mind regarding the latest perspectives on programmatic advertising?

Find everything about the programmatic advertising industry you need to know in our complete guide to Virtual Programmatic Day.

What attitudes towards programmatic advertising in 2022?

In the first session, Nick Welch, Head of Programmatic, EMEA at IAS and Chair of IAB Europe's Programmatic Trading Committee, shared the most recent European programmatic advertising landscape. 

To start with a bit of context, the digital advertising market in Europe represents 

  • 21% of growth rate 
  • €92 Billion, the value of digital ad spend
  • 33.7%, the increase in programmatic spending 
  • 59% of the digital share of the total media advertising, a vast progression since 2009 (19%)
  • Programmatic is now outperforming I/O-based display ads 
  • €13 Billion, the worth of programmatic display
  • 57%, the total programmatic share of the display

Driven by the publisher approach and concentration of the sell-side, the display market is affecting programmatic adoption between markets. The complex adaptation process has rapidly increased second-mover markets, especially in Central and Eastern Europe. However, there has also been a move to private marketplaces because of the decline of the open market share.  

To better understand the drivers and challenges in programmatic, what were the critical observations made?

According to the IAB Europe's 2022 attitude to the programmatic report, the most significant statements include

  1. Media cost efficiencies are still the key to programmatic investment 
  2. The cost of tech and data, paradoxically, is a barrier to investment 
  3. A positive growth outlook for 2023 is expected, and connected TV (CTV) is the key emerging channel
  4. A shift from in-housing to more dynamic approaches among advertisers

If we look deeply into the in-housing investment, it was a priority back then for advertisers. Yet, there is now a considerable decline. In 2021, 50% of advertisers stated having an in-house model, dropping to 16% in 2022. The downfall shows that the advertisers started to adapt to a more hybrid and dynamic approach by using various methods, such as outsourcing to a DSP or independent trading desks

  1. A shift in the type of data used for audience targeting

There has been a significant drop in the usage of first-party data, 53% on the agency side and 49% on advertisers. On the other hand, an increase in second-party data was noticed on the buy side, with 63% of advertisers using second-party data (40% in 2021). 

The main reason behind the decrease in the first-party data is predicted as the need for more practical or more availability in refined and usable form. The other reason is that advertisers and agencies want to diversify their audiences' data using different sources. 

The limited resources for the first-party data led to searching for new ways to identify new audiences. 

What solutions did advertisers and agencies find? 

  • Curated marketplaces come first, as 53% of advertisers plan to use them. The emergence of curated marketplaces proves that confidence in third-party cookies is declining.
  • On the agency side, 50% of agencies intend to use curated contextual targeting.
  • The use of ID solutions is decreasing, considering the privacy compliance concerns.

However, first-party data remains essential to identifying new audiences and influencing decision-making. In addition, the data protection regulations and cookie controls impacted the leverage of the first-party data.

We need to analyze all these observations in more detail by moving on to the programmatic investment drivers and challenges.

So, what are the programmatic investment drivers?  

According to many advertisers, agencies, publishers, and AD Tech vendors, media cost efficiencies are the most important driver for programmatic investment. Secondly, the granularity of controls and transparency of reporting were as much important for programmatic decision-makers on the buy side. 

The other key drivers to consider investing in or increasing the programmatic trading investment are the availability and scale of inventory, operational efficiencies, and the ability to discover audiences. 

Following the main drivers, what are the main challenges in programmatic investment? 

Although media cost efficiencies are the most important driver, tech and data costs are the primary challenges to investment for advertisers and publishers. For the agencies, the main barrier remains staff hiring and training because of the complexity of the tools requiring significant productivity. 

The additional barriers to investment are added as the operational elements (measurement, performance, use of data), quality of media (fraud, brand safety, viewability, transparency), political and economic environment, and sustainability.

We have seen the tendencies in 2022, but what about the future? 

What to anticipate in programmatic investment in 2023?

The expectations for 2023 are highly positive! Sector experts predict an increase in their programmatic investment in the next 12 months. As for the growth areas, as mentioned before, Connected TV is the channel with the most expected growth in programmatic. This is followed by voice, audio, Over-the-top (OTT), DOOH, and AI advertising. 

You don’t know which programmatic format to use? Then, read our Programmatic E-Book: Reach the right audience with the right format article right now! 

After the keynote presentation, four panels took place to discuss in-depth all the topics mentioned. Keep reading to find out what the industry experts said!

Watch the entire session here. 

AdEx 2022 will be released in Q2 2023. You can access the AdEx 2021 report here.  

Panel 1: The European Programmatic Advertising Landscape

The first panel, moderated by Nick Welch, debated the essential findings about Connected TV, the shift in the use of data, connecting to audiences, and the impact of the cookieless atmosphere. The panel participants were 

Connected TV

We have already mentioned that Connected TV is the go-to platform in the programmatic industry for 2023. The speakers supported this premise by stating that CTV is the best channel for branding. They also added the most preferred KPI is CPCV (Cost per completed view) and non-skippable video format. As for the use of data within CTV, the Consent Management Platform (CMP) is a must-have for publishers to collect profile-based data.  

You can read our article Can you streamline your tv advertising plan as you would with digital advertising, to learn more about TV Advertising!  

First-party data

As the programmatic industry prepares for the cookieless environment, there is an expected increase in publisher point of view for first-party data. So, the experts anticipate a first-party data strategy in the future.

On the other hand, there is substantial demand for the privacy of first-party data use on the buyer side. Therefore, the concerns of the users should be considered to prevent the negative impact of providing first-party data, such as 

  • Data breaches
  • Secured data access
  • Consent, usage, simplicity, data management
  • Transparency 

The solution suggested by one of the speakers was to have a third-party audit, an external audit, to validate the supply chain transparency

In conclusion, the key is to improve the user experience and gain the customer's trust by adjusting the use of data in programmatic advertising.  

Watch the full panel here.

Panel 2: Programmatic Without Cookies

The second panel was moderated by Travis Clinger, SVP, Addressability and Ecosystem, LiveRamp. The main topic was how the programmatic industry will adapt to the cookieless environment and what the outcomes and challenges will be. The panel participants were 

In this panel, the participants agreed that first-party data will become the key with the drop of cookies in the programmatic advertising, according to the first panel. Still, it was also mentioned that first-party data with consent will be compelling.  

According to the speakers, adapting to the cookieless environment requires data sharing transparency between the publishers and agencies on all digital advertising platforms (CTV, audio, display, mobile, etc.) 

The key remarques made for the cookieless environment 

  • Straightforward targeting and retargeting: Targeting by creating a segment of the users visiting a website from which browser (Safari, Chrome, etc.)
  • Contextual targeting
  • Curated marketplaces 
  • Omnichannel activation plan: adopting a more global and holistic approach with more innovation 

To conclude with the advice from sector experts 

  • IBM (International Business Machines Corporation) drives outstanding results in targeting
  • Back up your data 
  • Remember about privacy issues 
  • Adopt an audience-first approach
  • See this as an opportunity to build a new privacy-based strategy universally

And as the biggest recommendation, the experts suggested preparing for the cookieless environment as soon as possible!  

Do you want to learn more about the "cookie apocalypse"? Find every detail on How to perform in advertising in a cookieless world article! 

Watch the full panel here.

Panel 3: How can we help each other be more diverse and progress the conversation

The third panel was moderated by Maya Tank, Client Partner, DoubleVerify. The topic focused on how we can insist on and promote greater diversity in the programmatic advertising industry, linked to the current situation in Europe. The panel participants were 

Diversity in the workplace is about embracing and integrating employees of all backgrounds. A diverse work environment is essential as it recognizes each employee's strengths and potential, regardless of gender, ethnicity, culture, or language. In 2022, this is a subject that each company and everyone has to be aware of and respect.

The experts said over and over again that diversity encourages innovation within employees. Hence, the programmatic industry as well has to keep this in mind. 

Appreciating each other's differences unites us all and is undoubtedly the secret to success and a fair work culture.  

Watch the full panel here.

Panel 4: Tackling 2023 – The Big Themes Coming Up

The last panel, moderated by Andrew Hayward-Wright, Group Commercial Director Strategic Partnerships, SeenThis, and Programmatic & Sustainability Advisor, IAB Europe, discussed the trends and topics in 2023 and the summary of 2022 in the programmatic industry. The panel participants were 

The participants clarified the major trends that the programmatic industry has to be aware of and what we should concentrate on in 2023 and beyond.

What to take out from 2022? 

The experts summarized that 2022 was a low-cost year for the programmatic industry with ups and downs, mainly because of 

  • The macro & micro economic impacts and uncertainty 
  • Budgeting problems
  • The omnichannel shift and engagement because of the economic uncertainty, individual channels, more holistic solutions, simplicity, and the ability to optimize
  • Building an audience and building stronger bonds with clients became more important
  • The shift in consumer demand for more personalized contextual experience: Providing a more personal experience, and valuable information about the brand, rather than only talking about the brand when doing an advertisement 
  • Preparation for the cookieless environment and first-party data
  • The search for new connected devices, formats, and approaches to connect with the user in 2023 

What to expect from 2023? 

After finishing the 2022 recap, the experts added that although 2022 was a challenging year for the programmatic industry, in Q4, there was a huge bounce back. Thus, the expectations for 2023 are very positive, as mentioned before.    

The biggest challenge in 2023 is anticipated to be finding data and managing to collect its own data sources. Therefore it will be important to know how and where to find the necessary data and avoid unnecessary data collection. 

Another issue was the environmental impact of digital, with everyone agreeing that it has to be reduced, considering the carbon emission and sustainability. Consequently, there is a demand for new technologies to reduce the environmental mark.

Moving on to user demand, users now desire new experiences and more personalized ads. As a result, there will be an evolution to new ways of advertising using image recognition, AR, AI, and technologies with which users interact. In addition, contextual targeting will play a more prominent role in 2023 in broader user adoption. 

Learn everything you need to know about Contextual Targeting on our blog! 

As the search for new connected devices and formats continues, excitingly, connected cars and smart cars were even mentioned as a new platform for advertising! 

Finally, let's conclude the last panel with the main priorities for the programmatic advertising industry in 2023: 

  • Reducing the volume of ineffective ads 
  • Finding third-party cookies solutions 
  • Shift to first-party data 
  • Emerging channels (Connected TV being the priority) 
  • Sustainability 
  • Trust & Transparency
  • Privacy & Data Protection

Watch the full panel here.

Would you like to find out more about the future of programmatic advertising? Then, read our Digital advertising in the metaverse and Retail Media Advertising articles! 

In conclusion, according to sector experts, the programmatic advertising industry has an optimistic outlook for 2023. 

Fingers crossed!  


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