The State of Programmatic in Norway

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1 The State of Programmatic in Norway August 2014

2 Introduction This paper contains Delta Projects observation on programmatic trading in Norway today. Starting with online display media in real time bidding (RTB), programmatic trading is changing the way media is managed and processed irrevocably all over the globe and Norway is no exception. TV and other offline media are expected to follow within the next 2-3 years. Content 2 Introduction 3 Overview of programmatic trading in Norway 4 RTB in Norway 6 Programmatic trading in Norway in perspective 9 Forecast

3 Overview Programmatic Trading in Norway Today, Programmatic Trading in Norway is at the stage where digital/online media are actively being traded in Real Time Bidding platforms (Open Markets) and in Buying Solutions servicing Private Market Places (PMPs), offering special conditions by publishers against advertiser commitments. Overview Online Advertising in Norway In Norway, Online Advertising is on its way to overtake TV Advertising as it is continues to grow with +30,4% (comparing July 2014 to 2013) over 709 m in Total Online spending in As Online Advertising is dominated by SEA and Classifieds (together approximately 52% of Online Advertising) from a programmatic point of view the display (desktop, mobile & video) growth rate is important, which is a staggering +24.7%! The Norwegian online display market is dominated by desktop display advertising with strong growth rates for Online Video (11% of display, growing at a rate of 50%!) and Mobile (19,3% of display, currently growing YOY at +90,2% and resulting in 49 % of the total YOY Online Display growth by itself). The remainder in growth in online advertising is caused by SEA (+39,5%) and a modest growth in Desktop Display advertising (incl Online Video) of +13,2%. The spending on Data Driven Campaigns is currently exploding by 300% increase inq compared to Q Online Advertising has come to a state of consolidation for Desktop Display, with Online Video and Mobile as the rapidly rising media and Data actively starting o be applied to real-world campaigns: the best conditions to deploy the benefits of Programmatic Trading and Data Driven Marketing are being established today!

4 RTB in Norway Due to a limited market size (Norway is only 2,6% of the total 27,3 billion Euro online ad spend in Europe), Norway has not been on the radar of the larger international DSPs/SSPs. This has resulted in fewer active RTB providers and a majority market share kept by local programmatic platforms, lead by Delta Projects. Another delaying factor is the limited availability of open RTB inventory. With a small number of publishers experimenting, additional time was needed to adopt the open exchange business model. This is changing to some effect as the advertising ecosystem in Norway is now rapidly catching up with RTB, already accounting for 8% of online advertising, growing to 12% by the end of 2014 and 18% in 2015 (more than doubling itself compared to today). Delta Projects reach in Norway as of today is 10 million unique users per day, which is 99% of the available audience in Norway. The growth in programmatic today is clearly lead by online video, rich media formats and mobile:. Deloitte This trend towards more expensive media types, in combination with the increasing use of data in programmatic campaigns, has lead to an increase in ecpm. Increase in ecpm

5 Inventory types/ad-sizes in RTB In most countries programmatic trading started as a way to auction remnant inventory by larger publishers in RTB. Over time, adding behavioral- or contextual data increased the value of that inventory. The available inventory was enhanced with premium Rich Media, and more expensive media types and ad sizes - taking advantage of the 30% improvement in efficiency and performance, offered by Programmatic Trading. (Source: Boston Consulting Group, 2013) Most commonly traded are still the Leaderboard (728x90) and the Medium rectangle (300x250), but large-impact formats on desktop (for example 750x500, 980x300, 580x400) and mobile (for example 320x320, 320x90, 320x240, 768x150) with substantial higher CTRs (5-10 times higher) are moving up as they are becoming available on mainly PMPs as well.

6 Profiles Over the month of June 2014, the best performing profiles in Norway have been News, Real Estate, ecommerce/shopping, Travel, Internet communities and Games. The FIFA World Cup did not have the effect of boosting the sport channels that was experienced in other European countries. Relative CTR per profile category (factored over average) /IAB Europe

7 Status of Programmatic Trading in Norway in perspective In 2013, online advertising (display, SEA, classified and social combined) spending overtook the TV ad spend in most European countries and the USA. In 2014, this will also happen in Norway. Norway is an exceptional marketplace with a higher media spend on Rich Media, online video (13,1%) and especially mobile (16,4%) advertising compared to most European countries - and even the other Nordic countries. Mobile % of total display 2014 The growth rates in these segments are also quite astonishing compared to the European average, which clearly demonstrates the contribution to the sustained growth overall and the lower growth rates for overall Desktop Display in Norway. Growth rates in Norway vs. Europs

8 Programmatic in Norway is definitely catching up to global trends, starting with online RTB growing from 6% up to 25% in Online programmatic trading in Norway vs. the rest of the world What is happening in other markets that will affect the growth of Programmatic Trading in Norway? Actually a lot of things: 1) Development of easy-to-use interfaces to DSPs/DMPs 2) Introducing Premium, High-Impact and Dynamic online media to RTB 3) Development of standards and requirements for real-world reporting of performance metrics, eliminating impression/click fraud and viewability KPI s for online video (VAST3.0) and display advertising 4) Creating exchanges for other offline media, starting with digital radio (UK, NL, USA), outof-home advertising (Australia) and TV advertising (Germany, NL, Japan). By 2017, all on- and offline media will be available for automated trading in some way (Forrester Research) 5) Major media buyers are diverting from open RTB- to PMP-based automated trading 6) As DMPs get easier to deploy and better supported by recently modified privacy laws, applying first-party and second party data to enhance RTB targeting is rapidly conquering the RTB based campaigns. 45% of all campaigns in Europe is expected to be driven by data by December 2014 (source: IAB Europe)

9 Forecast Today and the remainder of 2014, publishers will experience the benefits of automated trading with growing average CPMs, thanks to additional premium-, rich-, data-driven-, and higher value (mobile, video)- media. This will open up the Norwegian market to automated trading in RTB- and private markets to a lot bigger extend. As media buying becomes common in automated trading, agencies and trading desks will use more strategy- and optimization specialists. Selecting the right tools that support new reporting standards will increasingly make a difference, especially in Norway where enhanced media (mobile, video, data-driven) will drive growth over the next years. The Norwegian programmatic market will catch up with the European average over the next two years, with automated trading (PMP) becoming the dominant business model in Norway. By 2017 at the latest, offline media including TV, radio, print and out-of-home will be available for programmatic buying. The PMP business model for automated trading in online RTB is a perfect catalyst for these types of media to adopt new ecosystems.

10 About Delta Projects Delta Projects develops smart campaign management solutions for efficient online advertising. Delta Projects Campaign Management Platform is based on a Demand Side Platform (DSP) with added IQ and built-in Ad Hosting (Ad Server). The integration to the company-owned Data Management Platform (DMP) serves as base for Delta Projects self-developed behavioral targeting technology and unique way of analyzing data. It is a programmatic buying system with Real-Time-Bidding (RTB) technology closely integrated to all major ad exchanges, Supply Side Platforms (SSP) and its own local media inventory. Delta Projects Campaign Management Platform is a timesaving online tool with functionalities supporting most parts of a traditional media plan; such as planning, buying, optimizing and reporting. Delta Projects offer also includes training, managed campaign services and personal support. Delta Projects, founded 2002 in Stockholm, has a long history of introducing new technology to the market. The company has a strong presence in northern Europe with local offices in Sweden, Norway, Denmark, Germany and the Netherlands offering local media-deals and local support. John Lilja is the founder and CEO. For more information visit Delta Projects AB Banergatan 10. SE Stockholm, Sweden

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