With the release of Media Experts‘ first year-end programmatic trading report, we’re finally getting a big-picture look at how the Canadian RTB market behaves.
The most active quarter for RTB last year was Q3: exchange volumes rose 11% over Q2, CPMs fell and Canada briefly became the fifth-largest RTB market in the world by volume. Canada ended 2013 as the world’s seventh-largest RTB market, falling behind France and Japan, which shot to the second spot after record final-quarter growth.
“Whereas traditionally the fourth quarter is the most important quarter for ad spending, and where you have the high spend on media, a lot of that is shifting to the third quarter,” says Media Experts CEO Mark Sherman. “Many retailers over the last number of years are complaining that there’s no Christmas — that back-to-school has replaced Christmas for them.”
Additionally, he says, much of the demand for digital media in Q4 may be hidden from the report, because publishers are selling it directly, rather than posting it to the exchanges. Direct sales usually mean higher premiums for publishers during high-demand periods like Christmas.
Year-over-year, Canada’s RTB market has grown substantially with inventory rising 21% since Q4 2012. Media Experts credits these gains to publishers freeing up more of their inventory for auction. Mobile has been a major contributor, with volumes doubling since Q1 2013 when the report first started tracking mobile. The report also singles out Facebook ads on FBX as a major contributor to inventory volume.
CPMs overall are down 11% from Q4 2013, likely a result of growth in available impressions and a more competitive marketplace for digital publishers. It may also reflect that advertisers’ enthusiasm for RTB has lagged behind that of publishers, and inventory is still growing faster than demand for it.
Sherman says it’s also a matter of improved programmatic strategy leading to more cost-efficient buys. “Advertisers are now paying the right price for the right impression,” he says. “Whereas previously there might have been more advertisers competing for the same impression, data is enabling advertisers to pick their spots, and be smarter about where they invest their clients money.”
Media Experts’ quarterly report on programmatic trading in Canada uses data from its Xpeto trading desk, as well as data collected by partners Accordant Media and Casale Media. It is the most comprehensive look at RTB in Canada, and currently provides the only regular updates on growth in the programmatic sector.
BY THE NUMBERS
Quarterly growth (Q4 2013 over Q3 2013)
• Total volume: -11%
• Average CPM: +6%
• Click-through rate: +12%
• Mobile volume: +59%
Annual growth (Q4 2014 over Q4 2013)
• Total volume: +21%
• Average CPM: -20%
• Click-through rate: +50%
• Mobile volume: +100% (from Q1 2013)
VIDEO AND MOBILE
Completion rates for video ads fell slightly in Q4, but remain high at 65%. That period saw unusual growth in non-standard ad sizes, primarily 320 x 50 mobile banner ads and Facebook video ads. In the previous quarter, non-standard ads made up 7% of all video ads, while in Q4 they make up 17%. Throughout 2013, video had been dominated by 728 x 90 display banner ads and 300 x 250 player ads.
Mobile’s share of total programmatic inventory more than doubled in 2013, from 3.8% at the beginning of the year to 7.8% by year’s end. Device-wise, smartphones made modest share gains on tablets, though tablets still make up the majority of inventory volume. The real news is operating systems: for the first time, iOS dominates the Canadian mobile programmatic market, growing from 47% inventory share in Q3 to 61% inventory share in Q4. Android is down to 38% from 51% in the previous period.
DSP MARKET SHARE
For the first time, Media Experts released data on the most-used demand-side platforms (DSP) in Canada, which was collected by partner Casale Media. Of 25 platforms used by Canadian advertisers for buying programmatic media, the top 10 have a 96% share of the market. The lead spot goes to Google’s Invite 2.0, formerly Doubleclick Bid Manager, with 27%. The Toronto-based eyeReturn is second.
Media Experts’ spotlight on viewability offered support for the common-sense view that display ads that are on a consumer’s screen longer are more likely to be clicked on. Using comScore’s viewability tools, Media Experts found that ads that are in-view for at least one minute have a 50% higher conversion rate than ads that are in-view for only one to four seconds. The report also compared viewability with fold placement, finding that above-the-fold ads have a 11% higher chance of being seen than below-the-fold ads. Ads whose fold position is unreported had the lowest rates of viewability; currently, 69% of programmatic inventory does not report fold position.
“We should be able to buy only ads that are in the viewable area, period,” says Sherman. “There’s no point in spending money on ads that aren’t viewable. We’ve been doing that in traditional media for fifty years, and in digital media we can do something about it.”
For the full report, visit the Media Experts website.