In the countdown to this week's ATS Paris, ExchangeWire catches up with Fabien Magalon, La Place Media, CEO, to get his insights on the French market, plus the brand perspective on programmatic, including attempts to meet a reported skills gap in the French market, plus the need for an overhaul in regulation there.

EW: Air France will take to the ATS Paris stage this week to discuss activities with its in-house trading desk how much of an emerging trend is this in France?
FM: It remains an emerging trend. At La Place Media we closely follow revenues generated per advertiser trading desks, and this year, so far we have only observed two advertisers investing significantly through their own trading desk: Amazon through its proprietary bidder; and Air France through an AppNexus partnership. This trend is limited and seems only to apply to advanced advertisers with large international budgets.

EW: What dynamics in the market are leading to the maintenance of the status quo in place (i.e. the advertisers/agency paradigm), despite the new opportunities (i.e.cutting out 'wasted ad spend' that goes to third parties) posed by ad tech?
FM: Pros of such internalisation are around control and transparency. However there are some cons. For instance, it requires dedicated resources, which might be expensive, and requires consequently a large advertising budget in order to make it profitable.
Another con, is that it isolates automated display trading from other marketing efforts. Apparently most advertisers still value the benefit of centralising media spends through their agency and agency trading desks, which seems to make sense in many situations.

EW: In the first ExchangeWire European Programmatic Survey, 'mobile' and 'video' were identified as the two most 'desirable' ad formats in the coming 12 months. Does this reflect what you see in the market?
FM: Yes and no. Programmatic video, yes, is definitely growing in France. We have seen recently major TV channels launch their own programmatic offering on truly premium catch-up inventory. We also have observed that DailyMotion launched it’s DMX exchange. So supply availability for pre-roll inventory has never been as large on the market. At La Place Media, we have launched a video offer one year ago, and it’s been constantly growing since, in terms of available volume, fill-rate and revenues.
On mobile, no. Although demand has been growing fast, usage is growing faster. So we still observe a large discrepancy between supply & demand. At La Place Media 12-15% of our revenues is driven from mobile devices, however we estimate usage to be above 30%.
That discrepancy varies per OS, device, or ad format, but there is still a lot of work to do in order to catch up. Effective monetisation of that growing mobile audience is the largest challenge for media publishers in the coming months and years.

EW: How are advertisers in France compensating for the lack of cookie-based targeting on mobile, etc?
FM: Cookie based targeting is available on Web Mobile on non-safari browsers. It’s not available however obviously within app environments; we are working on making IDFA and Android ID’s exhaustively available to the buy side in order to use these as a proxy for targeting & tracking.

EW: Transparency, and 'Loi Sapin' in particular were also raised as potential issues. Can you offer any insights into how this law applies to digital?
FM: First, in order to clarify, Loi Sapin has not recently been extended to digital. Digital has always been included into Loi Sapin. Second, difficulty with Loi Sapin is to make it applicable to the current digital advertising landscape. Loi Sapin was created in 1993, and only identified three partners in the value chain: Advertiser; Agencies & Publishers.
It’s not a sacrilege to admit that it’s now an outdated view of the ecosystem. The strict application f Loi Sapin is, I believe, impossible in the current programmatic landscape. There are new intermediaries which didn’t exist in 1993. Technological ones (DSP, DMP, SSP), service ones (trading desks, or ad networks, buying media, transforming it and selling it) that need to be included in the written law, and whose responsibilities need to be qualified: who are they, what are they doing, what are their obligations in terms of transparency?
On 4 October the French government started a large consultation within the industry in order to listen to all parties (supply, demand and intermediaries) and try to come up with a solution. Right now it’s very difficult for a lot of the parties involved into programmatic to understand what their exact obligations are and how to respect them. This will end on November 19th. Feedback hopefully will be included in 2015 in a new digital law project.

EW: Also, what are the potential implications going forward with the extension of this law in your opinion?
FM: I strongly hope that Loi Sapin will be clarified. At the moment, the misunderstandings around the application of the law create an environment that is preventing full growth of programmatic in the market: advertisers are concerned about the cost of media transparency; publishers are concerned about the risk of not being able to respect its obligations. It has to be fixed.

EW: Another key observation from the European Programmatic Survey was that 37% of respondents said 76-100% their ad spend was invested using ad tech. Does this tally with your experience of the market?
FM: That’s an impressive number. I would take it with caution. In France, programmatic is forecasted in 2014 to reach 22% of total display send (from 16% en 2013), reaching €170m to €180m in my opinion. That’s a 49% growth versus last year. And it’s likely it will continue to grow in the coming years, although probably at a less fast rate.
Also I strongly believe that programmatic growth next year will be fuelled by video, mobile and programmatic direct, rather than more traditional display RTB.

EW: Respondents in the survey also reported that a 'skills shortage' was a key restriction to their outfits performing even more automated media buys. Do you think this, plus the additional 'barriers', lead to almost 40% of respondents not trading in third-party data?
FM: I think that the skill shortage will resolve fast. At La Pace Media we’ve been working closely with publishers to ramp up programmatic skills within their organisations. Since September our publisher sales have been offering themselves some programmatic direct campaigns, where La Place Media is only acting as the operator. This is a signal that the skill shortage issue has been taken into account per publishers and that they are working on it to change it.
Also, programmatic advertising is not about launching rockets to the moon, and there are plenty of people currently in the industry that can learn fast. We observe this every day within our publisher’s team organisations.

EW: Additionally, what is being done to address this skills gap?
FM: ATS Paris was the first event in France to address programmatic. There are now multiple programmatic events happening in France (not as good as ATS through), all of them participating at growing knowledge and understanding.
Local organisations like IAB & SRI have now also been tackling the programmatic topic, through dedicated working groups. All these efforts tend to grow awareness, understanding and general knowledge about programmatic within the industry.

EW: Finally, 78% of respondents claimed direct sales teams will continue to exist in the next five years, despite the rise of programmatic. How are sales teams within France evolving to the programmatic era, especially given the relatively 'unique' dynamics of the market there, with the presence of the publisher consortiums?
FM: For premium media publishers I am strongly convinced that sales team will continue to exist in the next years. Their skills will just start to include some programmatic knowledge. Yesterday’s digital sales people had to sell a handful of offers, usually made out of formats and context on web. In future, sales people will sell more than 50 products combining web, mobile, video, reserved, programmatic, native, brand content, various audience offerings, viewable packages, all ad formats, etc.
That evolution in the offering of the sales team will require some evolution with the skills, or some addition to the teams. The sales person's job will become more and more interesting, and data-driven. It will be all about demonstrating value of their offering based on concrete results, rather than developing 'martini lunch' type of relationships with the buy side. The shorthand to designate this evolution 'from mad-men to math-men' is becoming a reality.
French programmatic market is increasingly sophisticated. I can’t wait to see what next year will bring. I expect programmatic direct to start becoming a significant part of publisher’s revenues and overall programmatic spend. I expect that publishers will have more and more opportunities to become efficient operationally and creative commercially, with the rise of the full ad-stack solutions (mobile, web, video reserved and programmatic ad servers). I expect that validation of audience (OCR, vCE, viewability) will become more and more of a challenge. Exciting times.

ATS Paris takes place on 13 November, and will also feature panel discussion. Tickets are still available but selling out fast, click here to avoid disappointment.