The Future of Video: Working Towards Ubiquitous Programmatic TV
With 2016 gone, it’s time to look ahead. In our industry, that is as fast moving as it is, it’s worthwhile to pause and consider what’s coming our way this year, particularly regarding video. As Rene Plug, chief strategy officer, Improve Digital explains to ExchangeWire, it’s no surprise that video will be the most important growth driver of programmatic ad revenue in 2017. And three segments in programmatic video will be the key drivers to this growth: in-stream and out-stream video, and linear TV.
In-stream and out-stream video
Unsurprisingly, programmatic in-stream will continue to grow exponentially throughout this year, as current demand is amplified by branding budgets moving into programmatic. Now these budgets strongly rely on Private Marketplaces (PMPs). In this year, I think we will see a move to increased yield management and RTB.
Similar to in-stream, programmatic out-stream will also strengthen its position in the market. Performance budgets show much better conversion rates for out-stream than in-stream, naturally causing budgets to shift. Media owners and buyers will start to recognise the value of in-page video next to their display and rich-media formats.
In light of this substantial growth, our role will be to apply our expertise and experience in yield optimisation technology to the video content that is being monetised by publishers, digital native platforms, and broadcasters. Equally, it will be also our role to help content providers without video inventory to use the in-page format to increase their overall page yields. The nature of inventory doesn’t need to limit content providers to get a piece of the video pie.
Programmatic TV is still in its infancy, and many players in the broadcasting value chain are starting to invest in it – including producers, telcos, cable companies, player technologies, CDNs, CMSs, TV manufacturers, agencies, the online bellwethers, SaaS platforms, and more – it will be busy, so watch this spot.
So, will 2017 be the year of programmatic TV? We have seen many ‘years of mobile’ in the last decade – and, in the end, mobile became ubiquitous – meaning that few people still talk about mobile. It is a given. Programmatic TV will likely show a similar path, where there will be many great new innovations in the coming years that allow linear and non-linear TV to become part of the online, programmatic ecosystem. In the end, the broad screen will be ‘just another screen’ that is used in its own right (the household audience), and the distinction between broadcast, narrowcast, and unicast will become less relevant as each will be monetised using the same workflows, data sets, and technologies.
In the process of programmatic TV becoming as ubiquitous as mobile, it is key that we, the programmatic industry help our fellow players to educate themselves and lead the innovations in the programmatic TV space, helping all players in the broadcasting value chain to enter the programmatic ecosystem.
Two little big things
This can’t be written without mentioning the technology that created a lot of headlines in 2016: header bidding. Even though it has been a good opportunity for display-clients to move on from the waterfall set-up, it does not offer the same opportunity in video. Therefore, the focus on video will shift the header bidding discussion to a discussion about holistic systems, combining lowest latencies and fastest response times, with the most efficient and effective workflow.
We have always focused on the holistic full stack. Media owners with an interest in video formats should take the next step in the evolution of programmatic trading methods and consider moving to a full holistic system. An intermediate, near-holistic, low-latency step – attractive to many clients with existing infrastructures – will be a server-to-server integration between an advanced monetisation stack and their established ad server. This solution aids the transition, without having to go all-in straight away, and allows clients a low-risk, gradual move to a full holistic platform.
Finally, a few words about transparency. Despite the fact that transparency is all over the news, recent consumer trends and market consolidations have created more sizeable ‘walled gardens’ than we have ever seen before. This creates opaqueness and intransparency. Whilst the pricing model of a walled garden seems attractive to many (low fees for what you know, unknown fees for what you don’t know), consider full transparency to be the key to long-term partnerships with satisfied customers. Together we will need to continue to drive this agenda, also in 2017.