Executive SummaryThe digital advertising landscape is undergoing profound transformations, marked by the decline of third-party identifiers and the tightening of privacy regulations worldwide. The focus of regulators has also turned to the market dominance of big tech giants, resulting in substantial fines. In this changing environment, ad servers play a crucial role in online advertising and publisher revenue generation. This report explores the key factors influencing ad server selection in Europe and how industry trends impact publishers' choice of partners. Combining original research with insights from media and advertising professionals in Europe, we examine the following: factors shaping ad server selection, the influence of industry trends on publishers, variations in publisher ad server needs based on scale, and levels of trust towards Google, Facebook, Microsoft, and Amazon.
As revealed in this report, a significant power shift is occurring, with publishers and emerging independent technology providers gaining momentum while big tech giants lose ground. Privacy has become a paramount concern for publishers, and larger publishers are particularly focused on business practices and legal compliance, leading them to explore different providers in the coming years. Publisher requirements vary greatly based on scale and market, signaling the end of one-size-fits-all strategies and opening doors for agile and adaptable solutions.
The power lies with the Open Web, and it’s time to reclaim it.
UMG.team’s mission is to make that happen while fostering an independent and interoperable ad tech ecosystem. We develop enterprise cloud ad tech solutions that are independent and always work in favor of our clients. This research confirms what we’ve been hearing from publishers across Europe and beyond: they are considering factors like privacy, antitrust issues, and alignment of interests when selecting technology partners.
"A positive sign of our progress is seen in the recent announcement of Vocento, a leading media group in Spain. This trend is gaining momentum, and we eagerly anticipate what the future holds."
Key FindingsThe survey findings indicate a shift in power away from the walled gardens of big tech providers towards independent market participants. This shift is most evident among larger publisher businesses, but early indications suggest that smaller publishers will follow suit within the next 3–5 years. Privacy-related market trends also strongly influence publishers' choice of ad servers, and this trend is expected to continue with the introduction of further privacy-focused legislation in Europe and the United States.
Key findings include:
- 45% of publishers are likely to switch ad servers within the next 18 months, with privacy-related changes such as identifier deprecation and legislation significantly impacting their selection.
- Larger publishers (revenue > £100m) are considerably more inclined to switch ad servers within the next 18 months compared to small publishers (revenue < £10m).
- Smaller publishers demonstrate a lack of awareness regarding the surveyed industry trends/events, indicating a need for education in this area.
Shifting Dynamics in Ad Server Selection: Unveiling Key InsightsThe survey findings shed light on a noteworthy shift in power from the dominant big tech providers to independent market participants. This trend is particularly evident among larger publisher businesses, with indications suggesting that smaller publishers will also follow suit in the next 3–5 years. Privacy-related market trends have a substantial impact on publishers' choice of ad servers, and this influence is expected to continue as privacy-focused legislation takes hold across Europe and the United States.
Key findings include:
- 45% of publishers are likely to switch ad servers within the next 18 months, with privacy-mandated changes like identifier deprecation and legislation significantly influencing their ad server selection.
- Large publishers (revenue > £100m) are significantly more inclined to switch ad servers within the next 18 months compared to small publishers (revenue < £10m).
- Smaller publishers demonstrate a lack of awareness regarding the surveyed industry trends/events, indicating a need for education in this area.
Varied Publisher Ad Server Needs Based on ScaleCost emerges as the primary factor driving ad server selection, with 45% of respondents highlighting its importance. In the UK (58%) and France (49%), cost is the most commonly selected factor. Privacy requirements also hold significant importance in publishers' decisions to switch to a new ad server, with 28% of respondents considering it a driving factor.
Larger publishers show concerns related to poor relationships with their current provider, business practices, legal compliance, trust, and exploring new channels. Publishers with revenues between £5m and £100m aim for greater efficiency within their stack, prioritizing integration, full-stack capabilities, and cost when making decisions about ad server selection.
Google Ad Manager and Its Market DominanceGoogle Ad Manager remains the most widely used ad server, accounting for 54% of respondents, followed by in-house ad serving operations (17%) and Adform (5%). It is crucial to understand how Google achieved such dominance in ad serving.
Mikaël Hervé, Vice President of Charles River Associates, emphasizes the need to explore the reasons behind Google’s high market share. He points out that while the network effect and data are not prominent factors, Google’s dominance stems from self-preferencing within its stack. This self-preferencing favors AdX through dual ties:
- DFS favoring AdX
- Google DSPs favoring AdX
Consequently, Google can offer ad server services at a lower cost.
Hannes Modes, CTO at QuarterMedia, explains the critical role of interlinking between Google products in publisher retention. Despite concerns about data privacy and policy conflicts, publishers heavily rely on revenue generated through Google AdExchange. Even if publishers switch to a more privacy-compliant ad server, they still need to use AdX to avoid significant revenue losses. Modes highlights that programmatic selling without Google does not yield the same results and that working with Google can be complex and time-consuming but ultimately advantageous.
Time Spent with Current Ad ServerThe duration of working with current ad servers is evenly distributed, with roughly equal proportions of respondents having worked with their current ad server for less than four years (47%) and four years or more (53%). The rapid digital transformation during the pandemic has boosted publisher confidence in managing their ad server operations, with 44% of those who have in-housed their ad server doing so within the last 12 months.