Is the Programmatic Open Market Ready for Video Advertising?
There’s been plenty of focus recently on how online video is the new frontier in the industry as video ads gain increasing attention from eyeballs and, as a result, budgets. However, while budgets are gaining momentum in this area, the methods used to trade video ads are not. Despite the potentially large benefits that programmatic trading can bring both content providers and advertisers alike, most video ad inventory is still sold through direct deals and Deal_ID.
Two areas that are holding the industry back when it comes to the programmatic trading of video ads are a lack of control and transparency, and a delay in responding to video’s constant demands on innovation. To overcome these challenges, all sides of the industry need to be in constant conversation. As links in-between, ad tech companies dedicated to the sell-side have a crucial role in moving the industry forward.
Control and transparency
Issues around a lack of control and transparency in programmatic dominate the industry as a whole, with concerns on both content provider and advertiser side. However, this challenge is especially relevant when it comes to video ads because of the high CPMs compared to display and mobile advertising. With their unique position in the industry, ad tech providers who are focussed on supporting the sell-side can do a lot to address both lack of transparency and control for content providers, whether publishers or broadcasters, and support advertisers in the process.
For content providers who are already entrenched in programmatic, like publishers, lack of transparency is the biggest stumbling block in helping them address advertiser concerns. What’s at stake for advertisers is knowing where their ads are running, in what format and whether those ads are actually being viewed. Viewability and measurement are big issues, a symptom of which is the current way that VPAID is being used in the industry. An ad tech provider who is fully transparent can provide a publisher with deep insight. Better analysis for publishers means they in turn can better serve the video-related needs of buyers and advertisers. After all, the more informed buyers are, the more value they can expect in the exchange, and the higher the CPMs they are willing to pay. That’s better for all sides of the industry.
While industries new to programmatic, like broadcasters and cable companies, are moving towards automated ad sales, full programmatic advertising is not always a part of their strategy. They need time to adjust to programmatic which feels unpredictable. That uncertainty can be counteracted by an ad tech provider that responds to their needs by offering sell-side features that provide more control. This includes features such as pricing control, which allows content providers to set prices depending on advertiser, format and buying method, and automated guaranteed, a direct buy that makes use of a Deal_ID that is sold on a guaranteed basis. With more control, content providers new to programmatic will also feel confident enough to take advantage of the benefits of the programmatic open market.
Responding to constant innovation
The immense potential that video advertising can offer has all sides of the industry understandably excited, but this rapidly evolving channel also demands a level of responsiveness from the industry. As the demand for new video formats grows, so too will the industry’s need to adopt the innovations that meet that demand. This will require a mind-set shift on the part of all sides of the industry.
For instance, with the adoption of out-stream video, the challenge for content providers has been how to communicate that new format consistently to the open market. Here, the supply outpaced the standard. The main challenge was solved by the introduction of OpenRTB 2.5, enabling out-stream to be distinguished from in-stream inventory for buyers. In cases like this one, ad tech providers on the sell-side can contribute by implementing IAB standards quickly, responding to buyer and seller needs and increasing trust in the industry.
Another example is one where the standard is outpacing supply, as is currently the case with Dynamic Ad Insertion. While VAST 4 can already support Dynamic Ad Insertion, the quality of the files being traded programmatically is not high enough for it to be effective. It’s up to the buy-side to provide these files. So, while many on that side see Dynamic Ad Insertion as the road to a more seamless, more user-friendly in-stream video ad experience, their trading methods have yet to catch up with what the tech can do. That will probably take some time, so for now, Deal_ID is the stop before full programmatic.
Both innovation and transparency are on-going issues in the industry that all sides need to address. There’s no doubt that online video advertising offers huge revenue potential. At the same time, it throws up challenges that the industry can only resolve if all sides work together.
Ad tech providers dedicated to supporting the sell-side of the industry can contribute to faster adoption of video programmatic. We need to recognise our crucial role as the link between content providers on the sell-side and advertisers on the buy-side in order for everyone to reap the benefits of full programmatic video. Those benefits can only come to fruition if content providers embrace the full spectrum of video advertising. Video advertising shouldn’t just be about dabbling in programmatic by selling through Deal ID as a side-line, but about making video part of a holistic programmatic advertising strategy from ad serving to open market.
Featured in Huffington Post 7 May 2017