Interactive Advertising Bureau
19 March 2019

Guest blog: State of advertising data market

by Maciej Sawa, CEO, from CloudTechnologies Group

Programmatic advertising is growing rapidly all over the world and to stay effective it needs high-quality audience data. Spending on digital information is growing at a double-digit rate - study reveals that it will hit $26 B globally this year. 78% of marketers declared that they will spend more on data in 2019 than the year before, according to an IAB Europe study, so data is an important part of today’s digital economy. What is the size of the global data market and on which markets advertisers spend the most?

Growing programmatic market needs data

Programmatic advertising lets marketers purchase digital ads automatically, by using dedicated technologies. It’s an effective model, so advertisers from all over the world are increasing programmatic budgets. European spending for automatically bought ads reached €12 B, according to an IAB Europe and IHS Markit study.[1] eMarketer estimates that by 2020, over 86% of US digital display ad dollars will transact programmatically.[2]

One of the key factors of the effectiveness of programmatic advertising is audience data. Last year marketers spent over $20 B on data (+32.4 YoY) and in 2019 the spending will exceed $26 B (+26.6% YoY), according to the Global Data Market Size report.[3]

3rd party data - targeting the right audience

The estimated spend includes a large amount of 3rd party data - digital information about customers’ behaviour, interests and purchase intentions that help advertisers target the right group and send them tailored messages. This type of data is also used for developing Business Intelligence tools and marketing automation software.

Therefore, it is crucial to use high-quality information in digital marketing because data has a direct impact on campaign effectiveness. But what does “high-quality” mean? It means that digital information is up to date and describes a real internet user. When marketers use poor-quality or non verified data, there is a risk that their ads won’t see the right group and ad budgets won’t be spent effectively.

The programmatic market is becoming increasingly hungry for data, which is the petrol that drives it. The aforementioned report about the value of digital information, clearly shows that demand for data is growing rapidly all over the world. Marketers in almost all of the 23 analysed countries will spend more on data than last year. Let’s take a closer look at the top Global and European programmatic markets to find the largest ones and point out the trends that are shaping the fast-growing data market.

World’s largest data markets - TOP 5

The US is the world’s largest data market with an estimated value of $15.2 B in 2019, which is over 58% of global data market value. This year the second position will go to the Chinese data market, where marketers will spend $2.4 B on audience data.

Just ahead of UK is China. The UK has been on the 2nd spot for years, but China - the fastest growing among the world’s largest data markets (+95.5% YoY) - overtook it, and will hit $2.35 B in 2019 (+25.1% YoY).

Canada and France are closing the TOP 5 world’s largest data market list. Advertisers will spend for digital information over $768 M on the Canadian market, which is a growth of 30.6%. In France, marketers will spend nearly $470 M (+37.8% YoY).

The largest markets in Europe - TOP 5

Need for data is growing fast across Europe. This year marketers from all European countries will spend $4.2 B on data and which is nearly 30% more than a year before[4].

The largest market in Europe is the UK with an estimated value of $2.35 B. It grew by 25% in comparison to 2018. France took the second position - advertisers will spend nearly $470 M on data on this market in 2019 (+37.8% YoY). The fastest growing market among the TOP 5 is Germany. With the 44.4% growth rate, it took the third position among the largest data markets in Europe and will reach $265.6 M this year.

Denmark is fourth largest data market in Europe - marketers will spend over 137 M on data this year (+20.2% YoY). The list of TOP 5 European data markets closes with Italy. With very high growth-rate (+38.4% YoY), its value will exceed $88 M this year.

Data market in the age of GDPR

Spending for programmatic will grow across the world in the following years, so marketers will spend more on audience data too. According to a Zenith study, the global programmatic market will reach $84 B, which means that 65% of digital media will be bought programmatically.[5]

Marketers invest in programmatic ads because it’s a fast advertising model and - if the data is of high-quality - it brings great results. The introduction of GDPR that was widely discussed in the digital industry, didn’t change the trend of growing spending on programmatic and audience data.

A month after introducing the new privacy rules, expenditures for programmatic started to recover to pre-GDPR levels. To ensure that data market will develop in compliance with the new privacy rules, the digital industry carried out projects which help companies comply with GDPR. IAB Europe launched a joint initiative called Transparency & Consent Framework that brings together trusted digital entities to which publishers can give access to the information about users’ devices or enable processing their data for specific purposes. Another important publication for digital marketers is a white paper launched by IAB Europe last year, in which authors explain how to effectively use data for marketing purposes in the GDPR era[6].

Both programmatic and data markets are growing rapidly which shows estimates included in ‘Global Data Market Size 2017-2019’ report. The trend of using data to find the right customers and know their needs is stable and has an international reach because the effectiveness of digital ads depends on tailored messages to users who will be interested in relevant displayed ads.

[1] IAB Europe & IHS Markit, European Programmatic Market Sizing 2017

[2] eMarketer, US Programmatic Ad Spending Forecast Update 2018

[3], Global Data Market Size 2017-2019

[4], Global Data Market Size 2017-2019

[5], 65% of digital media to be programmatic in 2019

[6] IAB Europe, Using Data Effectively in Programmatic

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