New research has shown that programmatic online video advertising is expected to grow into a €2bn ($2.24bn) industry by 2020.

The study was conducted by global analyst firm IHS with Denver-based video inventory management platform SpotX, formerly known as SpotXchange.

It took into account that the sector had grown from €22m ($24.6m) in 2012 to €375m ($420m) in 2015, with a growth rate of 38.7% predicted between now and 2020, when more than half of all online video advertising revenue in Europe will be generated programmatically.

The study also shows that the UK is the largest programmatic video advertising market in Europe, creating over one third of all European sector revenue this year so far. It states that 23% of UK online video advertising was traded programmatically in 2015, compared to 19% in France and 34% in the Netherlands.

To carry out the survey, 35 in-depth interviews were carried out by IHS with media owners, sales houses, agencies, technology intermediaries, advertisers and industry organisations and combined with information from advertising market databases across all media.

SpotX chief executive Mike Shehan felt the findings reflected the company’s growth. “We have invested heavily into Europe over the past year, appointing three new Managing Directors, and recruiting more staff,” he added.

This survey builds upon previous research conducted in 2013 and comes the week after SpotX’s rebrand to reflect its “evolution from an ad exchange to a holistic inventory management platform”, incorporating an ad server, Supply Side Platform (SSP) and programmatic infrastructure.

“The growth is particularly fast in the UK where technological literacy, a volume of programmatic players and a lot of premium inventory means that the UK will lead the development in Europe to a diversified portfolio of programmatic transaction types,” commented IHS senior director of advertising research Daniel Knapp.

“We expect the UK to slowly close the gap to the US, where programmatic video will exceed 60% cent of the video market by 2019, compared to 2020 in the UK.”

Knapp concluded that the UK has seen strong initiatives from some broadcasters building a data and programmatic business. “The majority of growth in the next five years will come from broadcasters’ video catch-up inventory moving to programmatic trading.”