While analysts have predicted that Canada’s overall growth in programmatic spending will continue to lag behind the U.S., new data from Index Exchange suggest that Canadian advertisers and media buyers are diverting budgets into programmatic much more quickly than expected.
Based on 19 billion Canadian ad impressions auctioned by Index’s various open and private exchanges in Q2 2015, Index found that Canadian advertisers spent roughly 18% of the total amount that their American counterparts spent.
That’s significantly ahead of the IDC’s most recent public forecast for the Canadian market, which estimated Canada will spend about $119 million on RTB in 2015, about 2% of what the U.S. does. (Though that did not necessarily include non-RTB programmatic spending, for example through private marketplaces.)
IDC estimated Canada’s RTB spend would increase by between 45% – 50% each year between 2014 and 2017, a growth rate on par with the U.S. However, in both 2012 and 2013, RTB spend nearly doubled.
There are a few caveats with Index’s data. It doesn’t release dollar figures, only index values that show the relative amount that different markets and verticals are spending.
More importantly, although it has a large Canadian and U.S. sample, Index is a Canadian company that has a strong presence here through premium marketplaces like Canada’s Premium Audience Exchange. So it may be seeing a higher share of spend coming from Canadian advertisers than other exchanges are, which may inflate its estimates.
Unfortunately, there are not many hard numbers on the size of programmatic investment in Canada just yet. The IAB, which conducts Canada’s most reliable digital ad revenue survey, currently does not break out programmatic and non-programmatic spend.
Nonetheless, given that Index is among the top programmatic providers in Canada, it’s clear Canadians are continuing to grow their investment in the channel.
Interestingly, the number of bids that Canadian advertisers are placing on real-time exchanges doesn’t line up with how much they’re spending. Canada’s overall bid volume in Q2 was about 11% of the U.S.’s bid volume — meaning that Canadians were spending a lot more per impression than Americans were.
Although supply constraints (especially in premium video) are likely a factor in why Canadians ended up paying more for fewer ads, it’s likely also because Canadian advertisers are aiming for a slightly higher tier of inventory than Americans are. Programmatic experts that have worked in both Canada and the U.S., like Rocket Fuel’s Canadian country director Aileen Hernandez-Halpenny, have said they see American programmatic advertisers using extremely lean, acquisition-focused direct marketing tactics, whereas more cautious Canadian advertisers prefer to pay a premium to work with media sellers they know and trust to provide quality content.
