Why the next wave of programmatic innovation might just be European

Dan de Sybel, chief technology officer at Infectious Media, makes the argument for Europe's programmatic market overtaking the US.

There is no denying the dominance of the US when it comes to the programmatic advertising space. In 2016, programmatic spend in the US is predicted to have reached a massive $22.1bn (£17.7bn), while the most recent figures for Europe stand at the somewhat smaller €5.7bn.

But, despite the obvious advantage the US market has in terms of its size, there’s still a lot they can learn from their European cousins when it comes to the future of programmatic. At the heart of this is one of the characteristics that has always made Europe such a breeding ground for innovation: its diversity.

On the surface, the US is a relatively homogeneous market, at least in terms of its language and currency. Europe, on the other hand, is made up of 50 countries, 38 separate languages and 28 different currencies. For many advertisers, this diversity is a headache, not least because it’s meant having to split advertising budgets across multiple markets.

At Infectious Media, for example, campaign spend for a typical client over a month in Europe and America is often roughly the same, around $1m each. But once this gets broken down across the various markets, the figure changes dramatically, becoming $50,000 and $500,000 respectively.

While this complexity has created major hurdles, particularly for European ad tech companies looking to fully exploit their own backyards, they’ve also created significant opportunities.

The smaller ad budgets per market have prompted the need for programmatic campaigns that can be managed from one central hub and adapted easily for different markets. Having offices on the ground in every country just isn’t practical anymore, nor necessary in the programmatic age.

The smaller ad budgets per market have prompted the need for programmatic campaigns that can be managed from one central hub and adapted easily for different markets. 

It’s also helped to develop a mind-set in Europe where we don’t just assume that we know everything that is going on in each region. Instead, we take into consideration every minute detail which may affect the success of a particular campaign – be that language, content, age, time of day or even the weather – creating technology and a strategy that goes far deeper than most off-the-shelf American platforms allow.

In short, the inherent challenges in Europe has driven a laser sharp focus on innovation. There’s a greater need for programmatic algorithms that allow for ultra-optimisation around the numerous variables advertisers can access.

For US ad tech players, this level of variability just hasn’t been such a priority. They’ve traditionally looked at the US market as more homogenised and created programmatic strategies and tech that reflect this, despite the fact there’s a massive opportunity for a more detailed approach in the US itself.

But, when you look at how the programmatic revolution is rolling out across the globe, you realise they could be missing an even bigger trick. Imagine the benefits of a European, ultra-optimised approach in a market such as Asia.

Asia is a region that presents advertisers with the same challenges as Europe does – except it’s not 600 million people, it’s more like three billion people, with countless languages and cultures, not to mention multiple different alphabets. You can quickly see how creating processes and frameworks that force you to think about every single variable would be valuable in diverse regions beyond Europe.

This is all testament to where programmatic is currently headed and the high level of optimisation advertisers will expect from their technology and agency partners.

While Americans undoubtedly created the first wave of programmatic innovation, it’s no forgone conclusion that they will lead the second. In an increasingly global marketplace, smart marketing can come from anywhere and Europe can teach the world a lesson or two on the future of programmatic.

Dan de Sybel is the chief technology officer at Infectious Media.

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