How The Exchange Space Has Evolved Across Europe In 2010
There has been a big shift in the main European markets over 2010. DoubleClick Adx, AppNnexus, Rubicon and AdMeld have all made big inroads into Europe this year. Mid-sized and large European publishers are still deciding who to partner with – but nearly all have tested or are in the process of testing auction based SSPs. A good number of publishers started trading unsold inventory through the exchange eco-system in 2010.
Germany and France are quite similar in terms of understanding the opportunities of data-driven display. These markets are now attracting the big US and European ad tech vendors. Rubicon is already in Paris and Hamburg. Admeld has its Berlin office. And Improve Digital continues to increase its presence in both these markets. France and Germany are effectively following the same evolutionary path as the UK - and will catch up with the UK market in coming 12-24 months.
Mexad opened offices in 2010 in London, Paris, Vienna, and Warsaw and after starting early 2009 in Germany. We are now working on a pan-European basis, bringing our exchange experience to five different markets.
The groundwork is done – now it´s time to shape the eco-system here in Europe.
Momentum In The European Exchange Space... Are We Seeing Any?
Of course we are. But the biggest problem we face in this space is a talent shortage. We need to find the right people to build on this momentum. Unlike PPC in 2001, this is not a new market. Display has been around for a long time but this new technologies needs experienced people to get the best possible results out of it. No one is able to handle ad exchanges, SSPs or DSPs without an in-depth knowledge of ad serving and the display landscape in general. It is a problem, but the industry should soon have the right people on board. With any new technology there is always initially a lack of skilled people. It's a problem, but we as an industry will address as this market grows.
The Big Differences In European Markets
There are a lot of differences in my view. Both the sell-side and the buy-side in each European market tends to be wildly different. Just ask any major media agency if their UK media planning unit is structured the same way as the French or German one. You will find that there are major differences. The same can be said for the data driven marketplace. Some markets are keen to use data-exchanges - others haven´t even heard of them. SSPs are very popular in the Netherlands (just ask Improve Digital and Admeld) but have failed to take off in the Nordics. Ad exchanges are getting more and more premium publishers in the UK as more impressions are put through these platforms, but only OpenX has any real valuable inventory in France. German publishers and their main industry bodies remain resistant to ad exchanges, which is resulting in mainly blind inventory in ad exchanges when it comes to German IPs. The differences could not be more obvious.
European Trends In 2010
I guess 2010 was the year of the data-driven-marketplace, particularly the advent of RTB. But it remains a challenge to make all the publishers and agencies understand what RTB really is, and how they can benefit from it.
Data driven display is still very niche when it comes to mainstream press coverage. You can count all articles about RTB in Germany in 2010 on one hand, in the UK the relevant articles on two hands and in France on two fingers. This obviously doesn't include the fabulous ExchangeWire.com and the German-based digital industry website, Adzine.de.
DSP And Exchange Traction In European Markets
I am seeing great success for ad exchanges and SSPs in most European countries. Central Europe is moving fast. Southern Europe will adopt it in 1-2 years. The Nordics don´t really need it due to limited inventory. Eastern Europe is fast waking up to the opportunity of the data-driven display – and it seems as 2011 will be the year for Eastern Europe.
I don´t see a bright future for technology pure-play DSPs as they are focused on highly scalable regional markets similar to the US. They are facing problems in Europe because effective opitmisation in this market can't be solved by technology alone. You will also require the skilled experience of local traffickers. But experienced traffickers aren´t yet available for DSPs in different European countries now or in the near future - as I explained above about the existing talent shortage. And if the DSPs don´t get regional experienced account managers and traffickers they will lose ground in Europe. The market will be left wide open for Google. Using Invite and its local knowledge, Google will not only be able to offer an automated buying solution but also provide a localised service.
I call it the “Right Media problem”. Right Media had great technology, and was the early mover in 2005 - but nearly failed in Europe because of a lack of pan-European technology and support staff.
US-based DSPs can operate in the UK due to the similar language for a while – but they will fail in all the other European countries if they don´t find a way to localise asap.
The Big Opportunity In 2011
The biggest opportunity is to grow the data driven marketplace, making display a bigger success than search.