A Global View for Adtech
The UK is one of the beating hearts of the adtech industry, with a thriving start-up scene and a number of industry leaders based in Britain. Broadcasters are turning their inventory programmatic and AI at use in marketing and advertising is blooming.
London is also the centre of the hugely influential branch of the ad:tech conference, which gathers industry leaders annually to plan and discuss the years ahead. With so much going on so close to home, it’s easy to forget that adtech is a global industry. Innovation requires diversity and heterogeneity – which is why it’s important to look at the bigger picture and consider the UK as an integral part of the global ecosystem. Throughout 2018 we talked to marketers, brands and media agencies across the globe about their priorities and predictions for the future.
Media agencies – not one like the other
The services that media agencies offer vary drastically from country to country. While some agencies focus on consultancy services, others advise their clients on the latest tech trends – and some simply offer traditional media buying. In the UK, agencies are very numbers-focused. 42% of UK agencies manage their clients’ advertising budgets, while only 29 % offer the same service in Germany. Equally 37 % of agencies have offered performance reporting in 2018 – in Australia only 19% do the same.
Agencies around the world offer some very specific services. Singapore lives up to its reputation of an innovation hub, with 63% of media agencies advising brands on how to successfully navigate digital transformation. Only 3 out of 10 UK agencies have said that they offer the same service. While we expect this number to increase slightly over the next 5 years, Singaporean agencies are definitely a few steps ahead when it comes to this topic. The different profiles of media agencies do reflect the needs of each individual market. In a mature market such as the UK, agencies often provide a fully integrated service that can assist brands at every step of the way. In smaller, more specific markets we see much more tailored agencies – such as the ones in Singapore mentioned above.
Programmatic expertise – more confidence is needed
As part of our global research this year, we asked agencies worldwide about their programmatic buying capabilities, in addition to where they see themselves within the ecosystem. With UK agencies, we found a dramatic lack of confidence in their programmatic abilities. Only 3 in 10 UK agencies view themselves as an expert in programmatic buying, while globally 40% provided the same answer. And yet, the UK is using the same levels of programmatic inventory in their media campaigns as other markets. Germany, where 43% of agencies see themselves as programmatic experts, is buying even less programmatic inventory than the Brits.
When it comes to the advantages and challenges of buying programmatic inventory, many countries around the globe agree that their biggest challenge is to target ads better (i.e. 43 % of Singaporean agencies, 42 % of US agencies). This is much less of an issue in the UK, with 7 in 10 agencies feeling confident in their targeting abilities, demonstrating that the UK is very much at the top of their game when it comes to employing programmatic. UK agencies need to become more confident and allow themselves to rely on their programmatic expertise.
Programmatic inventory – it’s all about audio
While each market has their own programmatic formats that they favour, programmatic social and programmatic mobile remain the top two formats globally. This might be partially due to the dominance of Facebook and Google, with the two of them the recipient of 57.7% of US digital ad spend in 2018. When comparing different markets, we found that the UK is leading the game in programmatic audio, with 38% of agencies purchasing the format (compared to 30% in the US and 20% in Australia). In digital video, the UK is still slightly behind some other countries. In emerging tech hubs such as Singapore, 45% of media buyers invest in digital video (versus 35 % in the UK). However, the situation looks slightly different when we focus on Advanced TV. The UK market is fortunate that the availability of Advanced TV inventory is already a lot more progressive than in other markets. Only 1 in 4 UK brands and agencies are worried that there is not enough available programmatic TV inventory for them to buy. In Singapore (39%) or Korea (44%) we have heard that this issue is a lot more prominent. Even in the US, the perceived leader in Advanced TV, the number of brands and agencies worried about a lack of inventory is higher (31 %) than it is here at home.
As we have seen, adtech markets across the world are still very much diverging, with new trends popping up in different locations. The UK industry is truly at the head of the game. However, our brands and agencies are often not aware of this advantage and would do well to be more confident in their programmatic expertise. The adtech industry is inherently global and interlinked. Alas it’s important to keep an eye on what other markets are focusing on and learn from each other to develop and grow as a truly global market.