ExchangeWire rounds up some of the biggest stories in the European digital advertising space, including a $100m windfall for the European tech space via way of Google Ventures, calls for changes in how advertising fees are paid, plus much more.

European tech scene set for $100m Google windfall

Google Ventures (GV) this week confirmed earlier speculation that it is to set up a European arm, by announcing it is to open up a London office with an initial $100m war chest available to prospective start-ups, including those in the ad tech sector.

GV has been in existence in the US since 2009 and supported over 250 start-ups thus far, with big name ventures including Nest and Uber forming part of its investment portfolio, although ad tech firms such as Adelphic Mobile, ClearStory Data, plus YieldMo are also included in this number.

A blog post announcing the launch, penned by Bill Maris, Google Ventures, managing partner, reads: “Our goal is simple: we want to invest in the best ideas from the best European entrepreneurs, and help them bring those ideas to life.

“We believe Europe’s startup scene has enormous potential. We’ve seen compelling new companies emerge from places like London, Paris, Berlin, the Nordic region and beyond—SoundCloud, Spotify, Supercell and many others.”

The FT and TechCrunch report that GV’s European operations will have four partners including: Eze Vidra, Tom Hulme, Peter Read and Avid Larizadeh, with offices located in Clerkenwell, London (conveniently located close to the Capital’s fabled Silicon Roundabout in the Old Street area of the City.

The move will prove a welcome development for Europe-based ad tech start-ups that want to develop their operations closer to home rather than make the move cross the Atlantic, where the traditional power base of ad tech investors.

UK advertisers call for alternative renumeration models

There’s never been a better time to change the way agencies are paid to reflect the changing dynamics of the advertising industry, according to advertisers speaking at this week’s IPA conference hosted in London.

A growing number of major advertisers want to get more from their traditional media agencies, and this want them to adapt their payment models to the new era ushered in by the emergence of programmatic media trading, said Martin Riley, Pernod Ricard group CMO, and president of the World Federation of Advertisers, speaking at a conference earlier this week.

Advertisers want to evolve traditional payment models that rewarded agencies for outcomes rather than inputs, he said. “Between 2011 and 2014,” he said, “the WFA has seen an increase in advertisers adopting performance-based remuneration.”

The event was part of a joint drive by the IPA and the Incorporated Society of British Advertisers (ISBA) to explore new payment models. It was the latest strand of IPA President Ian Priest’s ADAPT agenda designed to create a platform to improve commercial output.

While the advertising industry has undergone a huge technology-driven change in recent years, it has been conservative in its approach to payment, said Priest.

“We have to reshape the business model to reflect the way ours, and our clients’ business, is changing,” he said. “Modern marketing is more collaborative, more partner-based, and agile. So why are we stuck with a payment system that doesn’t reflect this?

“We know from working with ISBA members that all parties are committed to re-evaluating time-based payment. It could be value-based payment, payment by results (PBR), or risk/reward-based systems. We’ve talked about this a lot in the past, but now there is a real appetite for change.”

The speech reflects the tectonic shift within the advertising industry – a move chiefly prompted by the emergence of ad tech players and algorithmic-based media trading – with ExchangeWire global editor further signposting potential further alterations in the industry with a post indication that media-buying giant GroupM may pivot its strategy to lock down supply for its clients.

Matomy, TubeMogul list showing strong revenue gains

Israel-based Matomy Media Group has listed on the London Stock Exchange’s ‘high growth’ segment raising £41m earlier in the week, valuing the company at £203m, after initial plans to do so earlier this year were shelved.

The listing sees Matomy, a performance-based ad tech firm, join Just Eat on the UK-based exchange’s ‘high growth’ segment, and completes earlier plans for the listing which were initially disrupted due to quirk of London listings which require a minimum of 25% of companies’ shares to be claimed by investors within the European Economic Area.

"We were disappointed to have postponed our offer earlier in the year, but we are delighted to be announcing our offer price today with such strong investor support," CEO Ofer Drucker said in a statement.

Matomy has made five acquisitions since 2011 (Adotomi, MediaWhiz, Adperio, MobAff, and most recently, direct navigation company Team Internet). It has raised a total of $17m in venture capital.

Separately this week, TubeMogul also announced its S1 filing on the NSADAQ, initially offering up to $75m in shares, but subsequent share valuation meant the company would have to

As part of the filing TubeMogul released figures total spend for 2013 was $111.9m, up from $53.4m in 2012, with revenues of $57.2m for last year equating to a $7m net loss for the period.

Accordant Media, Tapad announce plans to open doors to UK operations

Earlier this week US-based trading desk Accordant Media, and cross-screen marketing firm separately announced plans to open their respective UK operations this month, as figures estimate that total UK ad spend is set to rise 6% year-on-year in 2014.

Accordant Media, a programmatic media specialist company, has announced the launch of its UK operations with the opening of its London office later this month.

Under the stewardship of existing Accordant employees Michael Baumgaertner, director, trading strategies and James Dempsey, media specialist – both of whom will be relocating from its New York base – the company aims to offer “transparency” as its USP.

In a press release announcing the opening, Matt Greitzer, Accordant Media, COO, said: “Programmatic media is making audience-targeted advertising extremely efficient and effective for advertisers, but it requires the successful use of data management and media optimisation technologies and processes.

“Accordant brings this to our clients with 100% transparency and a fully managed services approach which we believe UK marketers are looking for.”
Meanwhile, Tapad has announced plans to open offices in both London and Frankfurt with Ben Regensburger, announced as president of Tapad, Europe, and Andrew Slome, SVP strategy and development, one of the cross-device firm’s first employees, also helping launch operations in the region.

Tapad's first product launch in Europe is slated for Q3 2014. Additional new hires, all reporting to Regensburger, include Frankfurt-based Thomas Leitner, Tapad, senior solutions engineer, and Stephanie Haag, Tapad, account director. Sarah Divan, Tapad, business development director, and Mathilde Natier, account director, will man its London operations.

Meanwhile, figures released this week from the Advertising Association (AA) and research body Warc, suggest total UK ad spend will increase 6% this year, rising to 6.7% in 2015, due to strong gains from online investment.

Total UK ad spend increased by 5.0% in Q1 2014 to reach £4.44bn, up from the 4.5% growth predicted in both outfits’ earlier joint report published in April.

Karen Fraser, AA, strategy director, said: "This latest set of data shows the importance of global events such as the World Cup to advertising spend in the UK. Following a positive start to the year in Q1, Q2 is set to be a strong quarter for the sector, buoyed by the tournament."

Internet advertising was a strong driver of this growth according to the pair, with total internet ad spend, including mobile, hitting £6.3bn in 2013, an estimated growth rate of 15.6%, according to the study. Investment in the sector is further expected to grow by 14% in 2014.

Guardian’s digital revenues near £70m

Guardian News & Media (GNM) this week reported sterling advances in its digital media revenues with total revenues of £210.2m for the year ending 30 March, although underlying losses of £19.4m for the period.

The results mean GNM has narrowed its losses to just over £30m during the reporting period, as digital revenues rose 24% year-on-year to £69.5m, as the its online audience rose to 102.3 million unique monthly browsers, up from 78.3 million the previous year.

Earlier this year the Guardian announced a fundamental overhaul of its mobile offering and revealed plans that it was making programmatic media trading a core part of its advertising offering.

Sam Sherson, Guardian News and Media, revenue operations director, said: “We see programmatic as helping our sales team concentrate on more strategic and bespoke advertising,” he said. “Programmatic does a job in the scheme of things, that enables us to concentrate on more bespoke [content].”

At present, the Guardian’s entire sales team trades automatically, so every member of our sales team will be talking to sales and trading desks, according to Sherson.

“We’ve been trading using RTB as long as anybody since 2010, and been quite open with the sales and agency teams about the data we’re getting on it… This involves making sure that our sales team’s strategies are in line with our direct and programmatic advertising teams, it’s helped us to ensure that everyone is on the same page.”

Print revenues for GNM’s parent company Guardian Media Group remained flat year on year at a little over £140m, but it was the sale of almost half of AutoTrader for up to £700m earlier this year that helped the group report a pre-tax profit of £549.2m.