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Programmatic video advertising to grow 5x in 5 years

SpotX, the video inventory management platform for publishers, has released research into the growth of programmatic online video advertising across Europe, predicting dramatic growth across Europe to become a €2 billion industry in 2020.  Programmatic online video advertising has grown almost twenty-fold from €22 million in 2012 to €375 million in 2015 and will grow at a rate of 38.7 per cent between now and 2020, when more than half of all online video advertising revenue in Europe will be generated programmatically.
Conducted by IHS, the global analyst firm and research partner for IAB Europe, and compiled from in-depth interviews with both advertising agencies and publishers, combined with the IHS advertising trends and forecasting database, the study reveals the UK as the largest market for programmatic video advertising in Europe, currently generating more than one third of all programmatic online video revenue in Europe in 2015 (36.1 per cent).

IHS identifies 23 per cent of online video advertising in the UK as traded programmatically in 2015, compared with 34 per cent in the Netherlands and 19 per cent in France.  This is predicted to grow substantially, to 63 per cent in the Netherlands, followed by 60 per cent in the UK and 54 per cent in France in 2020.  The UK programmatic video advertising market is worth €135 million now, and is expected to grow to €602 million by 2020.  Revenue in France is expected to rise to €358 million followed by Italy, which still shows a lot of potential, and will grow to €245 million.  Overall in 2015, the ‘big five’ European markets represent €286m of programmatic online video advertising revenue now, which will grow to €1,512 million by 2020, whilst the Nordics represent just €21 million in revenue, but will grow dramatically to reach €138 million in 2020.
The report sizes the programmatic video advertising market in Germany at €31 million, with growth expected to reach €254 million in 2020, making it the third largest market in Europe.
Commenting on the research, Mike Shehan, CEO of SpotX explains, “We introduced video real time bidding (RTB) in 2010 and launched our European operations four years ago.  Since then we have seen rapid adoption from publishers and broadcasters throughout the region and increasing demand from advertisers and their agencies.  These findings reflect the growth of our business, with revenues rising 90 per cent year-on-year in 1H 2015.  As a result, we have invested heavily into Europe over the past year, appointing three new Managing Directors, and recruiting more staff.”
Daniel Knapp, Senior Director of Advertising Research, IHS, adds, “We first analysed the programmatic video advertising market in 2013 and could see it was set to explode across Europe.  Our new analysis reveals the extent of the growth trajectory for online video advertising, with programmatic video advertising growing rapidly and taking an ever increasing share.”

“The growth is particularly fast in the UK where technological literacy, a volume of programmatic 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 to the US, where programmatic video will exceed 60 per cent of the video market by 2019, compared to 2020 in the UK.”
Knapp concludes, “In the UK we have seen strong initiatives from some broadcasters building a data and programmatic business. The majority of growth in the next five years will come from broadcasters’ video catch-up inventory moving to programmatic trading.”
The research report follows a rebrand from SpotX last week, where the company shortened its name to highlight its evolution from an ad exchange to a holistic inventory management platform, developed specifically for the supply side. The SpotX platform today incorporates an ad server, Supply Side Platform, and programmatic infrastructure including both open and private marketplace capabilities to help publishers manage all aspects of their video ad inventory across desktop, mobile and connected devices.


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