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Casale Media and Olive Media, two leading Canadian supply-side programmatic media companies, got together last week to share the latest insights on how the market is performing and how best to take advantage of it. Attendees heard from publishers, brands, media agencies, and technology providers across the industry, including Mindshare, Xaxis, Accuen, RBC, and the Toronto Star.
Andrew Casale, Casale Media’s vice-president of strategy, said that despite being behind the U.S. in adoption, Canada is a more collaborative market, and the key players do a better job of communicating and setting standards for the industry. Sharing insights comes naturally to a smaller, more close-knit group of competitors, he said. With that in mind, here are a some insights we took from the conference.
Weak Canadian e-comm equals weak retail investment in RTB
As reported in Casale’s Index Quarterly Report for Q4 2013, RTB uptake among Canadian retailers lags significantly behind the U.S., where retail dominates the next strongest category 3-to-1. Casale said that in the U.S., RTB initially gained steam as a way to facilitate retargeting – which was popular among retailers and e-tailers hoping to make easy sales from abandoned online carts. In Canada, e-commerce has historically been weak and never offered the same opportunities for retargeting, so retailers never took an interest.
Canadian telecom isn’t investing in RTB as much as it should be
Despite weak competition from retail, Canadian telecom has less than half the RTB market share that U.S. telecom does. Casale said that’s surprising, given the amount of first-party data telecoms have on their target consumers, and the amount of cross-platform access they have for advertising. He said that as publishers open more of their inventory and other sectors invest more heavily, telecom will have to keep up, or risk being squeezed out of the digital marketplace.
The lines have blurred between direct response and brand advertising
Andy Stevens, vice-president of strategy and research at ShareThis, said that the distinction between direct response and brand advertising in programmatic is less clear now than it used to be. “Just because it’s branding, and you’re not looking for an immediate sale, doesn’t mean you’re not looking for some kind of action,” he said. “A direct response ad isn’t going to work unless branding has previously done the heavy lifting of establishing the value of that brand in the consumer’s mind.
“That link between the two is where programmatic really has an opportunity for branding, because we can start to use some of the information we’ve learned about what makes branding ads work to make our DR ads work even better.”
He said that characterizing brand advertising as unmeasurable wouldn’t be accurate. In programmatic, there are many opportunities to measure, in real-time, a user’s engagement with a brand – the metrics are just different than those used to measure direct response. Rather than clicks and conversions, brand advertisers can look at the time a user spends on a page, for example, or the type of pages they visit next and whether they share it on social media.
Cookies are alive and well, even in mobile
Despite doomsday predictions for browser cookies, Casale’s data shows that 89% of Canadian desktop impressions bought in Q4 2013 were tied to cookies. Although Mozilla announced intentions to stop allowing third-party cookies by default on its Firefox browser, it hasn’t so far followed through on those plans, which leaves a significant share of impressions open to cookie penetration.
In mobile, cookie penetration is lower — 37% — primarily because iOS devices are “cookie firewalls.” But that number still beat Casale Media’s expectations, largely thanks to Android’s growing share of the market. “Android is actually a very cookie-friendly environment, and the fastest growing segment in mobile in the U.S. is Android, not iOS. If anything, we see that 37% climbing up to the 50% range by the end of the year,” Casale said. “For a lot of people, the assumption is that mobile and cookies don’t work, and that’s just not the reality that we see in the market.”
Publishers have to go programmatic eventually… right?
Ian Hewetson, vice-president of client services at EyeReturn, said he expects publisher resistance to programmatic will eventually crumble as more agencies and advertisers demand the efficiencies it brings. Right now, agencies and advertisers are willing to negotiate buys the old-fashioned way, because the reserved inventory held by publishers is a must-buy. “At what point does the balance shift – when the advantages that advertisers are realizing by buying programmatically [with other publishers] start to outweigh the exclusivity that they find with that content?”
But representatives from two digital publishers, the Toronto Star and LaPresse.ca, were hesitant about opening up their most valuable inventory to RTB trading. Sam Bevacqua, the Star’s director of digital advertising, said he doesn’t see the paper’s home page as a “programmatizable space,” and that opening up all inventory across the Star’s properties is unlikely. He was more open to the idea of private exchange deals, or publisher-advertiser partnerships facilitated by targeting and optimization technology.
The risks are real, but manageable
Publishers aren’t the only ones concerned about trading on the open exchanges — brands are too. Casale said that in his company’s Q1 2014 data, average CPMs have grown – uncharacteristic for the period and opposite the trend in the U.S. Digging into the data, Casale found that buyers were investing more heavily in direct buys and private exchanges, with higher average prices. “We think that was triggered by a lot of chatter in the ecosystem about ad fraud and ad quality in general,” Casale said. “I think that’s drawn the buy side to want to work closer with publishers.”
Bevacqua at the Star said he can’t blame advertisers for being protective of their brands, and he understands why they would seek safe harbour in private deals. “It’s a weird kind of scenario where we’ve spent all this money to build and protect a brand, and we’re willing to risk it just for a fleeting dollar or two.”
But Craig Jennings, director of media and agency management at RBC – the 5th-highest ranked brand in Canada by RTB spend – said he doesn’t lose too much sleep over brand safety. “I don’t think that more than a week or two goes by before I hear from somebody how we’ve offended them, or we’ve placed an ad somewhere that they deemed inappropriate – whether there’s a rationale behind it or whether it’s a personal crusade,” he said. “It’s one of those things that self-identifies. We get notified by the public about where our ads get placed that they shouldn’t be, and we take action.”
