In the first of a two-part look at the French programmatic market in 2014, insiders have told ExchangeWire the programmatic trading sector provided one of the few ‘good news’ stories in the French advertising market last year, which was described as “stable at best” by one source.
These sources also forecast the programmatic trading market will grow further in 2014, with some adding that market consolidation is a likely outcome if the sector is to continue to meet the needs of advertisers.
Tough economic climate impacting advertising budgets
Full-year figures for 2013 have yet to come in, but sources tell ExchangeWire the French advertising market was largely flat in the previous 12 months – an offshoot of the prolonged economic recovery there. Although in keeping with markets elsewhere, digital marketing budgets continued to swell.
The latest publicly available pan-European IAB advertising report shows that digital advertising is the second-biggest medium (behind TV) in terms of ad spend, with the total digital advertising market in Europe worth €24.3bn in 2012 (just over 25% of the total advertising market).
The IAB Europe Adex Benchmark study also notes the negative effect the continuing Eurozone crisis has on the advertising sector. The study additionally forecasts French total media advertising revenues will grow by just under 2% CAGR (compound annual growth rate) between 2011 and 2017 – this is compared to just over 4% for the UK market.
Resilience of programmatic
However, France is also one of the most developed markets for programmatic media trading, and this sector continues to provide positive noises from players in this sector. Jean-Baptiste, managing director of Vivaki in France, claims programmatic trading there is “soaring”, with its growth “faster than expected”. He additionally notes that programmatic’s share of the online display market was “close to 20%” as of 2013.
He adds: “France is certainly the most advanced country [in mainland Europe] in term of inventories, ad formats and devices available on ad exchanges. This is thanks to premium private market places that include major French media.”
Representatives from companies operating in this market, including Affiperf, DataXu, Hi-Media and Weborama, report similarly robust growth reports and forecasts.
Increased cooperation, if not outright consolidation
This has likely been accommodated by the formation of the respective French media consortia Audience Square and La Place Media (both of whom were formed in 2012, taking impact in 2013), which collectively represent 15 of the markets premium publishers.
In addition to the plethora of private media exchanges already present in there, this makes France on of the most mature markets for automated media trading, with well-placed market sources claiming this makes it ripe for consolidation.
Cyril Zimmerman, founder of independent advertising exchange Hi-Media, says French advertisers have shown a desire for implementing their online campaigns via programmatic channels, hence it makes sense for increased cooperation (at least), rather than make clients encounter some of the complications market fragmentation can pose.
He adds: “It [programmatic trading, plus projects like La Place and Audience Square] have been successful so far. But there are many private market places out there.
“In France you have about ten market places, but it could be better [for advertisers] if there were four or five.”
Whether this takes form in the guise of increased cooperation or outright consolidation – including the potential merging of Audience Square and La Place – is still debatable, according to Zimmerman.
He adds: “But all of them [market places] will have to talk about how they can work together more efficiently.”
Similarly, Fabien Magalon, managing director of La Place Media, agrees that increased co-operation is required in the market but is less bold in his predictions of outright consolidation.
He says: “It makes sense to merge proposition in terms of pricing, etc. But commercially it would be quite complicated. Audience Square represents ten shareholders, and La Place represents five… [such a merger] would require some high level conversations.”