Online video revenue across Europe increased to €375 million ($422.8 million) in 2015 from €22 million ($24.8 million) in 2012, a jump of more than 1,600%. Much of that growth has been in the programmatic ad tech space, as an increasing number of advertisers turn to programmatic to help them expand their reach to more targeted audiences.
In a study for SpotX, Researcher IHS forecasts that €2 billion ($2.25 billion), which is over half of all online video advertising revenue, will be generated programmatically by 2020.
“Programmatic video advertising in Europe is on the path from experimentation to ubiquity,” said Daniel Knapp, senior director at IHS Technology. “In three of the markets surveyed – Netherlands, U.K., and France – programmatic video will even become the predominant source of video advertising revenue by 2020.”
The researcher said Germany has the largest advertising market in Europe and the second largest digital advertising market after the United Kingdom, or the largest if factoring out paid-for search, and forecast the online video advertising market would reach €331 million ($373.2 million) in 2015, behind the United Kingdom and France.
France, said IHS is the “programmatic pioneer market,” with an already established equilibrium between a data-savvy demand side and a data-poor supply side helping to overcome hesitation and preconceptions of programmatic advertising.
By 2020, the researcher said, 54% of all French video revenue will be generated via programmatic channels.
While Europe generally has been receptive to programmatic, Italy has lagged behind, IHS said, but that’s beginning to change.
“Italy is a programmatic video market waiting to happen, and we expect the market to explode in late 2016 and 2017,” Knapp said. “We consider the revision of European data protection regulation and the establishment of the EU Digital Single Market as major drivers for improving volume, quality and utility of available data. The Italian market will rapidly scale to a strong middle position among European markets by 2020 when programmatic video will fetch 46.6 percent of all video advertising revenue.”
While the U.K., France and the Netherlands continue to lead the adoption of programmatic online video in Europe, with Germany gaining speed, other emerging markets include the Nordics, Spain, Italy, Switzerland and Austria.
Regionally, five markets were responsible for €286 million ($322.5 million) of programmatic online video advertising revenue generated in 2015; that’s expected to increase to €1.512 billion ($1.7 billion) by 2020.