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November 18, 2015, Article

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The Drum: MediaMath mounts acqui-hire to capitalise on German programmatic opportunity

MediaMath has announced the purchase of Spree7 to further its presence in Europe’s largest advertising market, plus across other German speaking markets, as brands there are expected to warm-up to the prospect of using programmatic media-buying technologies.

The financial terms of the deal were not discussed publicly although the deal means MediaMath will take 100 per cent ownership of Spree7, which was formerly a joint venture between the ad tech provider and PubliGroupe (a Swisscom-owned outfit) to provide white-label programmatic buying services to outifts in the DACH region.

Spree7’s CEO Viktor Zawadzki will now act as MediaMath’s regional director for DACH, with the outfit’s Berlin office to serve as the US company’s regional hub, where it will provide a white label programmatic trading desk service for over 50 media agencies post the purchase.

Dave Reed, MediaMath’s managing director of EMEA, said:  “Given Germany, Austria and Switzerland’s fast adoption of programmatic technology, our expansion into the region is an important step. Increasingly, multinational brands demand their ad tech vendors and partners have parallel reach and scale.

“We have already worked extensively with Spree7 and we highly value their local market knowledge and programmatic expertise. We are also excited to build on our close partnership with Swisscom.”  

Spree7 offers clients a self-service model, with Zawadzki commenting that such a model is popular among clients there due to a strong emphasis on transparency when it comes to automated media trading.

Germany still represents the largest advertising market in Europe, but it has been widely recognised as a laggard when it comes to the adoption of digital media, especially when it comes to automated media buying technologies.

For instance, research outfit IHS Technologies cites the country as the second largest digital advertising market in Europe (despite leading in almost any other economic construct), with separate research from the same outfit pegging programmatic video advertising spend there at €31m, compared to €254m across the rest of the continent in 2020.

To demonstrate the comparative lack of enthusiasm for programmatic media buying in Germany compared to the rest of Europe, figures from Magna Global show that programmatic is only expected to have 31 per cent market penetration in Germany come 2017. This is compared to figures of 60 per cent in Holland, 59 per cent in the UK, and 56 per cent in France.

A recent study published by eMarketer cited numbers from Quantcast revealing that 58 per cent of ad tech professionals there were already investing in programmatic ad buying, yet only 5 per cent said they were spending between 61 per cent and 80 per cent of their budget in such a fashion.

Almost half (46%) of participant brand-side marketers claimed up to 20 per cent of their existing spend on programmatic ads was intended for brand-building, although two-thirds said they planned to spend more on programmatic branding between now and 2017, according to the statistics. 

Various theories exist as to the reasons behind the German market being comparatively slow to adopt programmatic media buying. ExchangeWire, a research outfit that focuses an annual event focusing exclusively on the German market each year called AdTrader Berlin, estimates that much of the resistance comes from the buy-side of the industry, with publishers there wary of the potential of such technologies adversely affecting their revenues.  

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