Some time ago, we investigated thoroughly what is programmatic, how it works and why it will drive the Internet advertising market in the foreseeable future. We also showed that the role of video in digital is growing rapidly, as evidenced by the latest trends in video marketing. And now it’s time to talk about what marketers can benefit from merging these two instruments in programmatic video technology.
1Programmatic as Online Video Advertising Platform
As you already know, programmatic is a technology of the automated buying online ads using pre-defined algorithms for decision-making on the transaction that take into account socio-demographic and behavioral data about users available from a publisher, as well as an advertiser.
Accordingly, programmatic video is using programmatic method specifically as online video advertising platform.
And you know what? It works. And it works so well that by the end of this year 40% of all digital video ad spending in the US will account for programmatic purchase (as forecasted by eMarketer). And this is, for a moment, $3,84 billion.
Europe is lacking behind the US in absolute numbers, but programmatic video ad buying is growing rapidly here as well. For the past three years, revenues from programmatic advertising video ads jumped from €22 million to €375 million. And by 2020, this figure will reach €2 billion.
2Video and Programmatic Media Buying: Pros & Cons
Advantages and benefits of robotic video buying result totally from programmatic technology characteristics itself, and they are closely related to its effectiveness and risks.
- use of socio-demographic and behavioral data from many sources to determine the correct target audience;
- makes it possible to buy just the audience, rather than place or time on media buying platforms;
- allows real-time campaign adjustment and optimization;
- virtually ideal for brand awareness campaigns.
- can include both premium and low-quality inventory;
- has measurement by third parties issues (for example, today it is impossible to count YouTube viewability);
- fraud and bot traffic issues.
There’s another point we want to stress out separately because you can’t unconditionally refer to it as the benefit or disadvantage of programmatic. The thing is that customers often see the media (including video) buying automation as a way to save time. On the one hand, it is true, because programmatic allows for purchase with just a few clicks. On the other hand, programmatic media buying process does not necessarily become less labor-intensive and time-consuming. The matter is that working with programmatic means working with huge volumes of data, which results in an increased time spent on data processing and analysis. Consider this when you decide how to buy digital advertising next time and think about switching to programmatic.
3Trends and Areas of Application
Today it can be established that the use of programmatic ad buying is becoming mainstream, and questions about its future development interest marketers increasingly. Therefore, we offer you a quick overview of the main online video advertising trends tied up with programmatic for the current year.
- Changing Accents
The emphasis in programmatic digital video advertising shifts from direct response to delivering a memorable, unique and interactive creative in a compelling way in real time on multiple devices. This means that programmatic video will be used not only for direct sales, but for increasing brand awareness, audience engagement, and customers’ loyalty.
- Programmatic Video Goes Mobile
Since mobile is getting closer to replacing desktops as “the first screen”, programmatic technology is confidently making its way to mobile. In 2015, mobile video expenses have become the fastest growing area in digital.
The emergence of new ways and tools to monitor and measure relevant data on mobile devices also affect bright prospects for programmatic mobile video. Thus, marketers can assess the effectiveness of their actions in mobile just the same way they do it on the desktop and follow the ever-changing habits of their audience.
- Programmatic Video Goes TV
Today programmatic is synonymous with online advertising. But this technology has the potential to go far beyond the Internet. And the first area outside the Internet where programmatic has already begun to be used is traditional TV. At the beginning of 2015, ESPN partially was selling advertising on its sports show via an online auction.
Adoption of programmatic technology by traditional TV will mean a decline of rating system to form prices for advertising, as well as the shift in advertisers’ approach to placing their ads. The reason is that the rating of a program or show will no longer be important; audience characteristics – that’s what will matter.
Additionally, many popular TV products are also available on the Internet, and their audience is growing steadily. Such convergence of TV and the Web allows advertisers to place their ads effectively online.
4Successful Programmatic Video Cases
One of the most recent examples of the successful programmatic video advertising campaign is a case of Dymo scanners from Office Depot.
Goal: Generate brand awareness and bring traffic to the product page.
Execution: Buying digital video ad banners using programmatic technology.
- CTR is 2,5 times higher than the average in the industry.
- Impressions rate 21% higher than the average for traditional campaigns with the use of video banners.
- Final CPA turned out to be 2 times lower than the average for traditional branding campaigns.
In 2015, division of Shell Corporation in Hong Kong held a brand awareness campaign using interactive video, delivered to the audience via programmatic technology.
Goals: To increase brand awareness and ultimately increase the number of customer visits to the Shell petrol stations.
Execution: Advertising interactive microsite for increased engagement and stimulating visits to gas stations via TubeMogul programmatic platform.
- Engagement reached 3,2% compared to an average 2% for the industry in Hong Kong.
- With almost 185,000 video demonstrations, CPV was less than $3.
- Increased gas stations visits that resulted in +3% in fuel sales, which is 3 times more than the original goal.
In conclusion, we want to stress out once again that the expansion of programmatic video is a part of general programmatic technology expansion process in the advertising market and video marketing services. Understanding how programmatic works and the skillful use of its tools are virtually guaranteed to become a competitive advantage.