With estimates of $53bn in programmatic media sales by 2019, representing 150% growth rate from 2014, and the coveted title of “marketing word of the year 2014” programmatic advertising is said to turn the digital advertising industry into a clean mean efficiency machine. Much of the criticism and some publishers’ reluctance to join the programmatic inevitable movement forward stems from the confusion caused by using terms like “programmatic”, “RTB”, “guaranteed/direct programmatic”, “single-impression-auction” and more, interchangeably. No, they don’t all mean the same thing, and they don’t all say we humans are being replaced by machines. They do all reflect the inevitable change the adtech industry goes through, a change towards a more efficient, transparent, brand safe and data-based environment.
One of the areas in which programmatic has had many questions raised is premium advertising, and specifically premium video advertising. Unlike display or social advertising which embraced programmatic buying as an efficient solution to trade remnant inventory across multiple buyers and sellers, premium video advertisers and publishers alike are trying to figure out how programmatic media buying works with premium inventory.
As far as programmatic is concerned, online video advertising, the second-fastest growing advertising format, with estimated 19.5% growth rate by 2016, is now going through a similar process display and social advertising went through in 2013. According to research published by Turn, online video advertising is driving, along with Mobile, the growth in programmatic media buying.
So why is it that despite all the positive outlook and ever-growing adoption rates for programmatic advertising, premium video advertising has not been a major part of the programmatic media buying revolution? Simply put, not all programmatic media buying channels are made equal. Advertisers need to build the right mix of media buying solutions that best fits their campaign goals. But while advertisers are more familiar with Programmatic Real-Time-Bidding (RTB) as the most efficient way to buy targeted inventory, sometimes what they need is a guaranteed inventory, which cannot be auctioned in an RTB system, by definition. This also comes up as an issue for Publishers, who do not wish to lose guaranteed revenues, seeing the high demand from brands for premium video ad placements.
This is yet another classic adtech example where terminology chaos creates confusion and misinformation that perpetuate an inefficient situation. A common misconception is to always associate programmatic media buying with Real-Time-Bidding (RTB), where buyers bid for a single ad impression for a price that is set in real-time, auction-style. But this is not the case at all - Programmatic does not necessarily equal RTB. And this is where Direct Programmatic comes in as an additional solution for buying premium inventory automatically and efficiently.
Direct programmatic (also referred to as “Automated Guaranteed”) leverages the advantages of RTB programmatic advertising to bring efficiency and scale into direct media buying. The technological infrastructure that is at the basis of programmatic advertising allows for automated analysis of vast amounts of information, automated optimized decision-making, algorithmic improvement of campaigns based on history learning, low operating costs and cross industry standardization.
Direct programmatic in online video advertising provides guarantees for both advertisers and publishers: advertisers know exactly which ad placement they’re getting and at what rate, and they can choose which placements to buy with guaranteed placements and where to leverage remnant media via RTB. Publishers can maintain premium CPMs for premium media placements, without the long selling and deal-closing cycles and with the speed and optimization capabilities programmatic offers.
Premium video content begets premium video advertising. As online viewers demand and consume more premium video content, and as content producers supply high-quality video for digital viewing, advertisers’ demand for premium video advertising will grow. For big brands, premium online video inventory provides a perfect solution for carrying off TV-quality advertising cross-screens to desktop, tablet and mobile. Bringing the efficiencies of programmatic technology into the media buying process will provide brands with the quality, measured viewings they look for, while maintaining publishers’ premium pricing for their best content and ad placements.