IAB Europe has again released its annual 'Attitudes to Programmatic Advertising' report. The report provides a comprehensive analysis of the state of programmatic advertising in Europe, covering trends, growth drivers, barriers, and future forecasts.
If you work in programmatic, we recommend checking out the report. To make it easier, we've compiled what we believe are the key insights:
- A significant 51.9% of non-social display advertising is now purchased programmatically, with over half of advertisers and agencies allocating more than 41% of their budgets for display, mobile, and video campaigns to programmatic channels.
- The hybrid operational model—which blends in-house expertise with external resources—remains the most popular approach, though in-housing is a growing trend.
- Audience discovery has emerged as the primary driver for programmatic investment among advertisers, while agencies continue to prioritise cost efficiency. Major barriers include media quality concerns, political and economic uncertainties, and sustainability considerations.
- Metrics are shifting from traditional measurements, like CPM and CPV, toward quality-focused metrics such as viewability and brand safety. Meanwhile, as reliance on third-party cookies declines, first-party data and contextual targeting are gaining prominence.
Looking forward, artificial intelligence, Connected TV (CTV), and retail media are seen as key growth drivers for the future of programmatic advertising.
IAB Europe's AdEx Benchmark 2023 study (published in June 2024) reveals that the European digital advertising market, valued at €96.6 billion, continues to prioritise programmatic approaches, with 51.9% of non-social display advertising now purchased programmatically. While programmatic display remains dominant, investments are increasingly directed toward new channels like Connected TV (CTV) and retail media, driven by changing viewer behaviours and privacy concerns. The 2024 report reaffirms this trend, with advertisers and agencies expanding their programmatic investments in mobile, video, and emerging formats, underscoring programmatic's growing significance.
A significant share of advertisers and agencies now programmatically purchase over 41% of their display, mobile, and video campaigns. The display continues to command solid programmatic investments, with 68% of agency budgets now allocated programmatically, compared to 40% among advertisers. Similar patterns are observed in mobile and video advertising, with agencies leading in programmatic adoption across these formats, emphasising programmatic's role in meeting the needs of today's media landscape.
In 2024, the hybrid model remains the most prevalent operational approach for programmatic advertising, combining in-house expertise with external resources. However, the in-housing trend continues to grow, with 25% of advertisers now citing in-house operations as their primary model. Advertisers favour in-house operations for cost efficiency and enhanced control, but the full in-housing model faces challenges such as media quality concerns and resource limitations. Interestingly, 42% of advertisers plan to bring more programmatic trading in-house within the coming year.
Advertisers' focus has shifted toward audience discovery, now cited as the top reason for investing in programmatic. This represents a move away from the operational efficiency focus of previous years. Agencies, however, still prioritise cost efficiency, while publishers see operational efficiency and scalable inventory as key drivers. Although many prioritise sustainability, it ranks lower as a direct driver of programmatic investment.
Media quality has emerged as the primary barrier to programmatic adoption in 2024, with 31% of advertisers and agencies identifying brand safety, fraud, and transparency concerns as significant obstacles. This underscores the need for industry-wide standards to create a brand-safe and reliable advertising environment. Other notable barriers include economic and political uncertainties and, for some stakeholders, sustainability concerns.
Measurement and Data
Traditional metrics such as CPM (cost per thousand impressions) and CPV (cost per view) remain vital tools for evaluating programmatic performance, particularly for agencies. However, there is a notable shift towards quality metrics like viewability, which ensures that users see ads, and brand safety, which guards against ads appearing in potentially harmful or inappropriate contexts. Despite the emphasis on measurement, the report reveals an increase in advertisers and agencies that currently do not measure campaign success.
This trend may be attributed to challenges around data accessibility, insufficient measurement tools, and a skills gap, as some stakeholders lack the resources to assess campaign impact fully. Alongside these shifts, first-party data is gaining a more prominent role as the industry prepares for a post-cookie future, with advertisers increasingly leveraging data directly collected from users. Contextual targeting—where ads are placed based on the surrounding content rather than user behaviour—is also gaining traction as an effective, privacy-conscious alternative to third-party data.
Future of Programmatic
The future growth of programmatic advertising is expected to be firmly based on three key areas: artificial intelligence (AI), retail media, and Connected TV (CTV). When respondents were asked which factors are seen as the most significant drivers of programmatic growth over the next 12 months, 36% of advertisers and 29% of agencies identified AI as the top growth driver.
Publishers, in turn, selected audio advertising and retail media as the most significant growth areas for programmatic. Ad tech providers especially supported the importance of retail media as a source of new investment opportunities, 43% of whom ranked it as the number one factor. Connected TV emerged as a unifying growth driver across all stakeholder groups. Approximately one-third of each group selected it as the key growth area, highlighting CTV’s potential to attract new programmatic advertising investments from various industry players.
Sustainability
Sustainable practices remain central to programmatic advertising, though advertiser interest has declined while agency commitment to sustainability has grown significantly. Over 80% of respondents still consider sustainability a strategic priority within their organizations. Among agencies, 81% now prioritize sustainability, a 10-percentage-point increase from the previous year. However, only 60% of advertisers see sustainability as strategically important, marking a 20-point drop from last year. Publishers and ad tech providers view sustainability as equally important, though its strategic focus has increased within their priorities.
Progress toward Net Zero goals varies significantly across stakeholder groups. Nearly 70% of agencies report making strides toward achieving Net Zero, while only 20% of advertisers share this view. Many advertisers (47%) remain uncertain about the progress made. Around 50–55% of publishers and ad tech providers report significant or moderate progress, though 30% of each group remains uncertain about their advancement. As sustainability standards and initiatives evolve, tracking progress has become more complex, and long-term sustainability efforts face additional challenges.
Advertisers’ views on sustainability progress often encompass a broader operational scope beyond just media channels, which adds challenges in establishing clear metrics.
Source: IAB EUROPE: Attitudes to Programmatic Advertising 2024-report. You can find the full report here.