What’s driving growth in the programmatic video market?

According to The IAB Digital Content Newfronts 2013 Attendee Survey, 70% of advertisers are planning to shift at least a portion of their ad spend from TV to online video in the next 12 months, and in the EU, it is predicted that programmatic video will be worth a staggering £530 million by 2017.

These figures highlight just how important video is as a platform and the opportunities it presents for both publishers and advertisers. The level of automation inherent in programmatic is making the relationships between these parties significantly easier, while simultaneously adding a level of control and efficiency that historically has not been available.

So what key benefits does programmatic video have to offer and what’s driving its growth?

Why programmatic?

Programmatic ad trading has paved the way for a new generation of online opportunities for media and advertising brands. It offers publishers the potential to increase their yields by transforming the way they sell their inventory and automating the process of finding buyers, while presenting the opportunity to employ rich media such as video – which is fast becoming the most engaging ad format.

Performance vs branding metrics

While programmatic may have initially been driven by performance metrics – such as click-through rates – and branding metrics including context and viewability of an advert were considered less important, advertisers are now keen to benefit from the efficiency, control and transparency that programmatic offers in achieving engaging ads and successful branding campaigns. At the same time, publishers benefit as their video inventory is more premium and exclusive than other ad types – such as display – which typically comprise larger, more remnant inventories, meaning video ads can be sold at a higher CPM.

Programmatic video capabilities

Video is a powerful and engaging medium, with online video expected to account for 79% of internet traffic by 2018. Advertisers can utilise programmatic video as a branding tool, while publishers can be increasingly creative with their ad inventory and enhance audience engagement through interactivity and customisation – all the while achieving exposure on relevant websites to highly targeted audiences.

Transparency and control

An exclusive inventory offers increased transparency, control and audience reach efficiency for a higher value transaction, meaning publishers can choose relevant buyers – especially in the context of a Private Market Place (PMP), which helps publishers to ensure they protect their media brand assets. This is especially important in premium environments.

In terms of video, transparency expectations are much higher, as ads are better integrated into the user experience. For example, a brand may wish to specify the exact time a video ad appears, such as before a specific programme is due to be broadcast. In addition to this enhanced visibility, there is also the notion of control through the establishment of sales rules, plus real-time analytics.

Video across multiple screens

The notion of the second-screen experience – the use of a computing or mobile device while simultaneously watching TV – is changing the way advertisers are looking to target their potential customers. With 50% of TV viewers now watching TV programmes while interacting with another device, programmatic advertising presents an excellent way to retain engagement with distracted audiences as their attention switches to their second or third screens. It is also a good way to reach people who now under-consume live TV, such as those who watch catch-up TV.

Smartphones and tablets naturally lend themselves to video advertising, and advertisers are increasingly utilising programmatic’s capabilities to roll out cross-channel marketing campaigns. Programmatic video can be used to serve target adverts on the user’s laptop and mobile devices at the exact same time, or at another relevant time, such as during a competitor’s TV ad or parallel to specific content airing, ensuring the optimal chance of gaining the viewer’s attention even during commercial breaks – when the user is likely to have looked away from the first screen.

These factors demonstrate why programmatic advertising can be so impactful, both for publishers and advertisers. For advertisers, programmatic is an effective approach to target niche audiences in very specific ways, enabling them to build awareness, develop their reputation and enhance engagement. For publishers, programmatic technologies are an excellent connector between supply and demand, and video is a popular and valuable format via which they can boost their revenue.