Where is programmatic advertising headed in Canada?

0 Shares 0 Flares ×

Now that programmatic advertising is gaining favour with agencies and publishers, let’s look at where Canada stands on this burgeoning trend. What’s the future of programmatic in Canada?

[Editor’s Note: Be sure to also read our previous report on the state of programmatic in Canada]

There were two major findings from the Microsoft Ad Exchange study about the Canadian programmatic landscape. The first is that Canadian programmatic buyers prefer private marketplace deals over real-time-bidding (RTB) exchanges. The second is that they rely on agencies more than any other market.

These findings are based on data which represents the number of trades completed on the Microsoft Ad Exchange using an open-source framework called Deal ID. This framework is a sort of gateway to a private forum into which ad agencies can allow select buyers access. In turn, this means that those buyers can purchase the best inventory at fixed prices, rather than bidding on them in an open exchange environment.

Of the markets reviewed by MAX, Canadian agencies contribute 46 percent of the demand, followed closely by Western Europe at 45 percent. Interestingly, the US is the second lowest agency user for programmatic buying through Deal ID, sitting at 19 percent. RTB revenue for Canada through this open-source framework is at 32 percent of the markets considered. Again, this is the highest proportion, followed by Japan at 30 percent.

It should be noted that the trend which MAX found of Canadian programmatic buyers may be influenced by work that CPAX (the Canadian Premium Audience Exchange) and the US-based Index Exchange have done to promote Deal ID to agencies as a solution for programmatic direct buying. If this interpretation is correct, then it appears that Canada has jumped on the Deal ID train en masse. “When Canadians do eventually get on board a new technology, they like to do it all at once,” says Jeff Fraser of Marketing Magazine.

Admittedly, Canada is different than some other major markets like the US. The higher percentage of programmatic direct buys here is in part the result of major Canadian media companies’ preference for direct selling. But it is also the result of there being fewer major marketers in Canada: only 20 or 30 brands according to eMarketer, which account for a large amount of the overall programmatic buying.

Andrew Casale, speaking as senior vice president of strategy at Casale Media (now president and CEO at Index Exchange), says, “We’re definitely seeing in Canada that the needle is moved by major marketers. It’s not moved by local. It’s not moved by pure direct response. The companies spending money are big marketers with huge budgets.”

While the findings from MAX suggest that these major Canadian brands recognize the importance of programmatic (in whatever method they prefer to engage), there is a significant proportion of Canadian marketers who do not, and who have not been represented in MAX’s data.

 Relying on agency direct

Late night television host Jimmy Kimmel once joked, “Programmatic buying is the gluten of advertising. Like gluten, ‘programmatic’ has become a buzzword that many people use but few really understand. They just know it’s important.” Yet interestingly, a little over a half a year ago, data from Acuity Ads and Marketer found that more than a third out of 522 Canadian executive, middle-management and junior marketers surveyed had not even heard of programmatic. And, of those who had, nearly half rated their understanding as “very poor,” while a similar percentage said their brand was below average or lagging behind on programmatic execution. This may explain why the Canadian market appears to rely more heavily on agency direct buying over in-house and third-party buys.

Frederick Lecoq, senior vice president of marketing for FGL Sports and Mark’s, Canadian Tire Corporation, is not surprised by the move to agency direct. He says, “We digital marketers haven’t done a proper job educating our organization and peers to make programmatic buying easy to understand.”

Though Canada may be behind in its programmatic understanding and activity, this should not be the case for long. Joe Strolz, general manager at AOL Canada and chairman of the board for IAB Canada, predicts that there will be a continued increased investment in programmatic, which will help bring Canada into the future of media buys.

He tells Media in Canada, “Over the past several years, we’ve seen programmatic media buying revolutionize the way advertisers, agencies, and publishers buy and sell digital media. While some educational gaps still exist, buying digital media programmatically will accelerate as this gap narrows.”

0 Shares Twitter 0 Facebook 0 Google+ 0 LinkedIn 0 Email -- 0 Flares ×
The following two tabs change content below.
B2BNN Newsdesk

B2BNN Newsdesk

We marry disciplined research methodology and extensive field experience with a publishing network that spans globally in order to create a totally new type of publishing environment designed specifically for B2B sales people, marketers, technologists and entrepreneurs.
B2BNN Newsdesk

Latest posts by B2BNN Newsdesk (see all)

0 comments