According to J.P Morgan programmatic video in the US alone is tipped to grow 12% in 2017 compared to 2016 and is growing faster than search.
Why is programmatic video so confusing?
Despite competition from Google and Facebook, the growth in mobile video and the increase in the number of formats have enabled programmatic video to become the go-to transaction process for most video advertising. Still, many publishers remain confused by programmatic video processes and technologies.
The increasing number of players, rapid technology changes and multiple auctioning and bidding processes are all contributing to the growing confusion. To help publishers navigate through the programmatic video scape, we identified key considerations that will simplify decision making.
Choosing your path in a multi-forked trading landscape
Although ideally it would make sense to focus on revenue goals tied to audience data, many publishers are still confused by complex programmatic video technologies, and tend to work within the scope of their technology limitations.
By doing so publishers risk overlooking new video formats and improved bidding techniques that could lead to better yield optimization. Rather than unleashing the full potential of data insights leveraged by programmatic video, many lose out on significant revenue gains. In video, where there is more to gain than display, this route is even more detrimental. So before making fateful business decisions, it pays to make sense of the varied opportunities for better video transactions.
Open real time trading, private trading, direct deals or combined trading?
In the open Real Time Bidding (RTB) marketplace publishers have the advantage of vital insights and more inventory control by tweaking pricing. For instance, publishers can see what specific audience segments are best performing and which are the most sought after by advertisers. These insights can be used strategically to maximize the value of audiences and optimize for cost efficiency. By building stronger relationships with the high-value customers publishers can attract new audiences that match this profile.
But although RTB makes it easier to reach wider audiences, it does not give a guarantee on return. Nevertheless, with more focused user-targeting and better insights, RTB can provide better cost efficiency for video campaigns and more exposure to demand. It can actually contribute to a better strategy whereby publishers can use insights on what they’re selling, who they are selling to and what prices work best to form direct sales pricing and strategy.
Video and Programmatic Direct
Programmatic Direct, more or less an automated version of the insertion order, offers the distinct advantage of guaranteed demand at pre-set prices. The promise of programmatic-direct is the possibility of securing premium ad slots filled at premium prices, which is highly critical for video. The downside is that it does not guarantee publishers that all ad inventory will be sold.
The arrival of video header bidding introduces a more advanced channel for data-driven decisioning based on demand, not inventory. Combining header bidding with programmatic direct enhances monetization opportunities.
Video traded in the Private Marketplace (PMP).
The true value of the PMP is the direct line it facilitates between a buyer and their audience. Ideally publishers connect specific audiences and video inventory to demand partners who value them most.
But for all its value, PMPs often don’t reach their full potential: They take a lot of time and effort to manage and can be difficult to scale. When managed correctly PMP can be used as an incentive to encourage advertisers to reach a spend threshold specified for premium video inventory.
Why it pays to get the mix right:
To maximize the impact of video, it pays to combine different programmatic trading options and consider integrating a programmatic video channel into a broader Omni-channel mix. Take the New York Times for example. Last month the publisher opened up its inventory to programmatic buyers, but far from making inventory available through programmatic at all times, advertisers can reserve audience targets in an initial direct-sales deal before opening bidding on a more constrained set.
Video header bidding is making it possible for all demand sources, including programmatic direct and private marketplaces, to compete side-by-side on the same impression. Publishers are now able to get a clearer picture of what their video inventory is worth. With a wider range of video formats viewed across a multitude of mobile devices providing valuable insights, publishers have a stronger negotiating seat. Working with media-agnostic tools, the time couldn’t be better for publishers to take back inventory control and secure their negotiation position.