Could Europe steal America’s programmatic crown?

Infectious Media’s Daniel de Sybel looks at why the next wave of programmatic innovation is likely to come from Europe

When some history buff sits down one day to write the story of digital marketing, American technology innovation will no doubt feature heavily.

Look back to the first emergence of programmatic, the technology which has revolutionised how online ads are traded, and US companies led from the get-go. It’s testament to the incredible innovation and rich tech talent that has long been available across the country.

But whilst chapter one might be all about Uncle Sam, there’s no guarantee that the second chapter will be dominated by American innovation.

Europe, because of a perfect mix of three factors is becoming just as pioneering and may even lead the next wave of programmatic disruption. As an international programmatic agency headquartered in the UK, we know this more than most.

Vive la programmatic difference

The first factor creating this mix is geography, something you might think America would have a natural advantage over Europe in. In many ways you’d be right. After all, the US is a huge market and also a relatively homogeneous one, at least in terms of its language and currency.

Europe, on the other hand, is made up of 50 countries, 38 separate languages and 28 different currencies. For many advertisers, this complex geography is a headache, not least because it’s meant having to split advertising budgets across multiple countries.

At Infectious Media, for example, campaign spend for a typical client over a month in Europe and America is often roughly the same, around $1 million each. But once this gets broken down across the individual countries, the figure changes dramatically, becoming $50,000 and $500,000 respectively.

However, these challenges have also created a breeding ground for a different and more sophisticated approach to digital marketing. It has created a mind-set in Europe where advertisers don’t just assume they know everything that’s going on in each region and, by necessity, develop much more complex and adaptable campaign strategies.

This flows into the second facet starting to give Europe a distinct advantage – technology innovation.

Clever algorithms

The complexity of Europe equally requires complex programmatic algorithms to allow advertisers to fully exploit the market. There’s a greater need for algorithms that allow for ultra-optimisation around the numerous variables advertisers can access in the continent – be that language, content, age, time of day or even the weather.

In short, the inherent challenges in Europe have driven a laser sharp focus on tech innovation. For US ad tech players, this level of variability just hasn’t been such a priority. They’ve traditionally looked at the US market as more homogenised and created programmatic strategies and tech that reflect this.

The smaller ad budgets per market has also created the need for programmatic campaigns that can be managed from one central technology hub and adapted easily for different markets. Having offices on the ground in every country just isn’t practical anymore, nor necessary in the programmatic age.

Sharing is caring

This idea of developing concentrated tech hubs sets us up for the third area separating Europe and the US. We often hear that being too London-centric is a bad thing for the UK, but when it comes to programmatic technology, it can also be an advantage.

Whilst America’s tech clusters are more fragmented and spread out across the country, one of the benefits of having so much more space, the UK’s is very much concentrated in the capital. This proximity has created an environment where ideas are shared and flow more easily across organisation, meaning innovation can actually develop quicker.

It also creates a situation where industry collaboration can thrive, something that is absolutely vital for the future of programmatic. The universal ID for example and the whole notion of standardising and sharing identifiers, as proposed by DigiTrust, is getting buy in far quicker here in Europe than it is in America.

Programmatic goes global

So why do these three areas matter? When you look at how the programmatic revolution is rolling out across the globe, you start to understand why.

Imagine the benefits of a European, ultra-optimised approach in a market such as Asia. Asia is a region that presents advertisers with the same challenges as Europe does – except it’s not 600 million people, it’s more like three billion people, with countless languages and cultures, not to mention multiple different alphabets.

You can quickly see how creating processes and frameworks that force you to think about every single variable would be valuable in diverse regions beyond Europe.

And while it may not be as diverse as Asia, sharing one dominant language and currency, the US is still a complex place. Driving innovation in programmatic through technology and strategy allows you to understand that there are countless nuances that must be considered by region, city, and local neighbourhood.

All can and should be used to identify interests and behaviours, allowing for a far more sophisticated and competitive approach to programmatic, which advertisers will increasingly demand.

As for the increased collaboration in places like London, the benefits for digital advertising are obvious. As an industry, it’s crucial we come together and find ways to be more open and transparent, not just for the benefit of advertisers, but for consumers too.

The speed that digital is evolving makes predicting the next chapter of programmatic a difficult thing to do. In an increasingly global marketplace, smart marketing can come from anywhere. But if this unique mix of qualities continues to develop in Europe, the centre of programmatic gravity might be about to shift.

Dan de Sybel is chief technology officer at Infectious Media