As a small region, the Nordics is often viewed as a single block. However, it comprises five different countries. Each does business, makes decisions and needs to be approached very differently. However, one thing we have in common is an appetite for private marketplace (PMP) deals.
As inventory quality overall has improved, companies are increasingly turning back to the open market. However, in Sweden, and, indeed, the whole Nordic region, we remain heavily PMP-driven.
Swedish PMP History
Historically, when purchasing inventory and reach on digital platforms, Swedish buyers have been keen to use publisher white lists as content and context are very important here. There is also a preference to buy local publisher sites first, only going beyond these to achieve scale.
This legacy has continued into programmatic. The result is that buyers in the Nordics view PMPs as the most brand-safe environments to access quality inventory. From what we are seeing, about 75 percent of deals in the region are PMP driven. Of all the markets, Sweden is by far the most PMP heavy, with PMPs representing over 90 percent of deals. This is of course only further reinforced by GDPR.
The rise of header bidding is having some impact. Additionally, buyers are looking to test other offerings in an attempt to achieve better deals or find the same inventory cheaper, elsewhere. This is leading to a move towards open exchanges, but not to the same extent as in some other countries. Overall, buyers here have found a way of operating they are very comfortable with–one that delivers brand-safe environments, greater transparency, scale, performance and an easy way to transact.
We are now seeing greater demand to package up PMPs on a viewability basis. Viewable CPMs (VCPM) is emerging as a core metric for the demand-side and developing these offers will persuade more brand-spend to be invested in programmatic. Further, the Nordics is also becoming part of supply path optimisation discussions.
Tackling The Video Supply Issue
As elsewhere in Europe, the demand for video is growing rapidly. Currently in Sweden, the video market is fragmented with buyers struggling to package video inventory to build out scale. In addition to this fragmentation, the broadcasters are including a proportion of their video inventory in their annual advertiser deals. This further reduces the volume of quality video inventory available to buy programmatically.
However, this approach may be changing. PubMatic is beginning to work with broadcasters to help them understand what eCPMs they are achieving from this strategy. With this knowledge, they may find they are missing out on revenue and thus re-consider their current strategy.
From our experience, both advertisers and agencies want to address the video supply issues and are willing to invest budgets if buying video at scale can be easier.
Overall, the market agrees there is a need for a solution that allows for brand-safe, quality video inventory to be consolidated and accessed in a secure environment. We are actively exploring solutions to allow video inventory to be packaged up in a multi-publisher deal, at scale. This would, in turn, drive greater video growth across the region.
Building such a tool requires an independent local platform to ensure all parties are comfortable in contributing their video inventory. It would also mean spend remaining within the local market, rather than going outside the Nordics, therefore supporting ongoing investments in journalism and programming. All of this benefits the Swedish market.
PubMatic believes in building a dynamic, independent ad tech environment in the Nordics to deliver choice, drive innovation and offer an alternative to the walled gardens. Stay tuned as we announce future innovations and how you can be involved.