Following her well-received presentation at the Netric Summit, we spoke to IRM MD Madeleine Thor to get a deeper view on what’s happening across the Nordic advertising markets.
For the benefit of those who don’t already know, can you summarise briefly who IRM is, and what you do?
IRM stands for the Institute for Advertising and Media Statistics. Our job since the 80s has been to collect, analyse and publish data on how the Nordic media markets are developing. We started off in Sweden, but now also cover Norway directly. We also co-operate with local agencies to cover Denmark and Finland.
We’re an independent membership organisation and a non-profit that works closely with the IAB, who sit on our board. We started off measuring the print ad market, but naturally progressed into digital and now increasingly we focus on programmatic too.
What is the current state of the digital ad market across the Nordics?
As small, affluent countries, each with a high per capita investment in advertising, we see similarities, but also big differences right now between each of the Nordic ad markets.
Sweden is of course the largest and in recent times also still the fastest growing. Norway on the other hand has been experiencing weaker growth for the past few years. In part, this is because of their economy’s oil dependence. Also, the shift from print to digital came relatively late in Norway and when it came it was very swift. So, we have seen large decreases in print spend during the past few years which affected the market very negatively. Overall, while Norway saw about 5% digital growth last year, the Swedish market grew by as much as 20%.
All four are highly digitised markets. Perhaps the most advanced of all is Denmark. And while Finland is technically the least digitised, digital there is also definitely on the rise.
And what is the state of programmatic adoption across the region?
Programmatic adoption across the Nordics has generally been categorised from outside as behind the curve – but a little more detail is really needed here to understand the true picture.
First, because these markets are typically concentrated around fewer publishers than in other countries, they obviously were never as fragmented. And where other programmatic economies were driven by buyers trying to overcome that fragmentation, so the pace of adoption was different over here.
Second, it’s actually really difficult to compare programmatic adoption country by country, because so often you’re not comparing like for like. Clearly more standardisation, and cooperation between research firms is called for – but what it maybe also comes down to is transparency. Ultimately, are you trying to give a fair understanding of the market, or is the main purpose just to create the largest number?
For our own part, we have decided to measure programmatic display as a percentage of overall display spend, excluding social. We decided not to include social because it adds to the number, but not to transparency.
Since it’s hard to know the exact numbers for social alone, the effect, in our view, is to muddy the water. Whereas if you exclude it, you can really focus on how much other companies have actually embraced programmatic.
And also, it allows us to get to a truly meaningful figure, even if it does look lower – at last count, programmatic spend was 30% of the total display market in Sweden, 25% in Norway – both in 2016. IAB FI puts Finland at 25% for H1 2016 (not including social) whereas Danske Medier’s numbers for 2015 put Denmark 50% (but this time including social, so it’s not like-for-like.) You start to see the problem. Both of the last two numbers are set to be updated imminently, incidentally.
Perhaps we need a directive from the IAB to standardise how we explain programmatic adoption, so we can truly compare different markets.
How quickly do you think programmatic will be adopted across the Nordics in future?
The future rate of programmatic adoption will be defined by the willingness to invest in, and to find solutions to the problems currently facing the market. Working together to solve issues like fraud and viewability, to make 100% sure there are accurate measurements across the industry.
How advertisers evolve in particular is also highly important. I mean in terms of how data-driven they are – how focused on truly learning about their customers – and of course how much they want to buy media based on those insights.
As compared to some other markets, the Nordics may have been a little slower in adopting programmatic – but one thing’s for sure – there’s definitely lots of activity now. And the fact of not being first to market is an impetus in itself to move faster.
Incidentally, Sweden is in fact an early adopter and a leader in one aspect of digital advertising. It has a very high share of online video versus TV – and therefore also programmatic video. Partly this is down to customer adoption, partly down to SVT, the public broadcaster, creating an online video service very early on. And then all of the commercial broadcasters following their example. Also, TV inventory was outsold from early on, resulting in a big investment in online video content.
It’s worth noting in this case that we saw many factors coming together to make this possible. It’s human nature to want one simple explanation, where in fact more often, it’s 10-15 factors all coming together at the right time.