the Rubicon Project Reveals Global Research into the Online Advertising Market

Ad networks remain critical in overall digital strategy, taking an average 55% of online display advertising budgets from buyers across US and Europe

Los Angeles – September 30, 2011 – Online advertising is growing around the world according to research conducted by Econsultancy.  Sponsored by the Rubicon Project, the advertising technology company, two thirds of the advertisers and agencies polled in the US (68%) and 57% of those in Europe (including the UK) said they had increased their investment in online display advertising in the last year. Nearly a quarter (23%) of the advertisers say they have moved budgets from search to display advertising in the past year.

The growth of Real-Time Bidding and the rise of the Demand-Side Platform (DSP)

• The research, which questioned over 400 advertisers and agencies globally, reveals that over a fifth (23%) of the advertisers and agencies surveyed say they use a demand-side platform (DSP) which takes an average of 32% of the media plan.
• This is highest in the US, where 39% of the advertiser and agency respondents surveyed say they buy display advertising through DSPs.
• An average of 34% of trading desk spend goes to real-time bidding (RTB): 41% in US and 34% in Europe.
• However, the survey also reveals that 37% of responding companies say their trading desks spend less than 20% on RTB and that 17% of advertisers and agencies do not allocate any display advertising budget to their trading desks.

“The shift in dollars from search to display comes as no surprise; we’ve seen this trend rapidly increase over the last year with the increased availability of automated, easy-to-use buying tools that make spending in display as easy as search. The rise in RTB spend represents another milestone in this trend toward more programmatic buying, as the overall buying strategies of agencies and trading desk gravitate in that direction,” said Kara Weber, SVP of Marketing at the Rubicon Project. “Yet, it’s not all about RTB. The research also shows that ad networks play a predominant role – clearly illustrating that the buyers are using multiple channels to maximize ROI, not yet placing all bets on the RTB marketplace. We’ll be watching this trend carefully through 2011; we predict the shift to automated buying channels, including but not limited to RTB, will be dramatic in 2012.”

Performance and audience targeting remain key concerns

• Of those advertisers using demand-side platforms, 82% use more than one DSP and 15% say they use more than four.
• When rating a DSP ‘performance’ is viewed as one of the three most important criteria by 75% of the advertisers surveyed, followed by technology (51%), audience (46%) and reach (35%), and improved targeting is seen as a key benefit of working with a DSP by 64% of advertisers.
• This is followed by real time understanding of campaign performance at 60% and the ability to buy at impression level for 53% of advertisers, with liquidity (lack of available inventory), cited as a challenge for over half of those surveyed (54%) and service levels an issue for 51%.

Linus Gregoriadis, Research Director at Econsultancy, notes, “The survey results reflect the huge transformation of the online display advertising environment since we last carried out this research two years ago. Advertisers and agencies have more opportunities than ever to target the right audience.  Ad networks and exchanges continue to prosper, while real-time bidding is having a major impact on the industry and is fuelling the growth of demand-side and supply-side platforms.”

Online advertising networks continue to command significant spend

• The research also reveals online advertising networks are receiving an average of 55% of the average media plan, up from 31% in 2009, when Econsultancy conducted similar research.
• Evidently, online advertising networks are seen as an important part of the media mix.  Of those advertisers working with ad networks, 43% say they work with at least five different ad networks compared to 30% two years ago.
• Over a third of advertisers (34%) buy from between five and ten online advertising networks – up from a quarter (23%) in 2009 – and 46% of advertisers say they are dealing with more networks than they were a year ago.  This is particularly high in the US with 53% of advertisers and agencies dealing with more ad networks than they were a year ago.

The main advantages of RTB are listed as improved performance, reduced media wastage, better targeting capabilities, and lower cost per acquisition.  Performance is also seen as the main advantage of ad networks with 79% of advertisers citing this as one of their top three criteria for rating an online ad network. The importance of reach has declined since 2009 however, when 67% of survey respondents highlighted it, which could be because of the growth of DSPs providing near total reach of the available inventory in key markets.

This is Econsultancy’s second Online Advertisers Survey Report, produced in association with the Rubicon Project.  The study, supported by the IAB UK, IAB France, IAB Europe and AOP, follows a similar piece of research carried out in 2009 and is based on a survey of over 1,000 online advertising professionals carried out in August and September 2011.   This report is specifically focused on results from more than 400 advertiser and agency respondents. A copy of the full report can be downloaded here.