Video & Programmatic: Making The Most Of A Seller’s Market
Across the online video advertising market, demand consistently outweighs supply by a large margin. Essentially, it is display advertising circa 2008, but in reverse. Back then, the display market consisted of publishers attempting to maintain high yields, despite marketers having easy access to billions of ad impressions at cheap prices. The chaos created by such a vast pool of supply came at its own unquantifiable cost, as marketers were often buying blind, not knowing where that spend was going. This in turn encouraged fraudsters to take advantage, pushing out worthless or phantom ad requests, getting paid for something of little or no value with no recourse for the buyer.
Demand outstrips supply, and quality content and environment is king; overall, this is a really good position for publishers and media owners to be in.
The video market is shaping up differently. It’s a premium marketplace. Prices vary dramatically based on quality of the content and environment, however with demand at such high levels, there is no ‘remnant’ market as such. Some parties have tried to create one, or at least create a “sub-premium” class of video ads, but with little success. For example, serving video ads via display formats without a marketer’s or publisher’s knowledge is really not cool, and the market has generally rejected the practice.
The fact is there simply isn’t enough real video inventory out there, meaning there’s no need for publishers to make ‘traditional’ cut-price deals with 3rd parties, networks or resellers. Publishers, for their part, can maintain premium pricing as long as they maintain the quality in terms of their video content. It is notable, especially with news content, just how many short video pieces are inserted into reports in order to increase video ad inventory and revenues. This is a good practice, growing supply to meet demand, but it also needs to be managed carefully. Pushing it too far could result in a grey area of subpar inventory, delivering less than what an advertiser expects.
Demand outstrips supply, and quality content and environment is king; overall, this is a really good position for publishers and media owners to be in. But this all begs the question: what is the best approach for a publisher to manage and monetise their video inventory?
The first point to make here is that video will not be a two-tech market. The previous display model of serving premium campaigns in an adserver and using an SSP to trade the unsold programmatically is not relevant in this case, just as display is beginning to move on from this model, with the SSPs and “programmatic direct” taking on an ever-increasing share of the “direct sales” market.
The same technology partner can therefore be used to run directly sold guaranteed campaigns, as well as managing the publisher’s programmatic strategy (Deal IDs, open RTB bidding etc). Video is skewing toward a model like this from the outset, given the robust programmatic infrastructure that is already in place.
Programmatic video trading is still in its early stages as most premium publishers tend to be sold out each month with IO based, directly sold tag campaigns. However, they are reporting that up to 20% of total online video spend is programmatic (although this stat does not separate out ‘long tail’ or UGV video inventory.)
This is not an attempt to decrease prices as the publisher will always control their own inventory.
Regardless, this percentage is surely only to grow, and publishers should therefore be open and willing to make their video content more accessible via programmatic channels.
An important take-away from the recent IAB Video Summit in Amsterdam was that agencies are crying out to buy premium video inventory programmatically. This is not an attempt to decrease prices as the publisher will always control their own inventory. It is merely an effort to drive efficiency in the market.
It’s a common misconception that using a programmatic technology partner will mean relinquishing control. This simply is not true. When using a publisher monetisation platform like Improve Digital, all of the controls for quality, access and pricing still remain with the publisher. Creating an auction setting with non-guaranteed delivery alongside directly sold campaigns can only serve to drive up video revenues for publishers.
It’s a common misconception that using a programmatic technology partner will mean relinquishing control. This simply is not true.
Publishers should choose a technology partner wisely; evaluate their experience in key market(s); understand all of the features that are on offer; and be crystal clear on the levels of service they will provide. And ideally, since a pixel is just a pixel, an impression just an impression, and a page just a page, that monetisation partner will manage not just the entire video stack, but the entire display stack as well, all while maximising revenues across both.
By 2017, video will account for 69% of all consumer internet traffic; and effective monetisation of that inventory will be crucial. This is equally true for both web publishers managing the current video boom, and for broadcasters being pulled into the online video fray. For ‘traditional’ media players, more than most, this is a long-term need, with the expected growth in supply due to consumer Smart TV adoption and the general “digitisation” of traditional broadcast businesses.