eMarketer forecasts that 59 percent of the $26.15 billion spent on US digital display ads this year will be transacted programmatically, but just 39 percent of US digital video ad dollars will be spent that way. By 2017, however, the video portion will increase, moving closer to the broader average for programmatic activity (72 percent), accounting for 65 percent, or $7.43 billion. It appears programmatic video advertising is at last reaching maturity, and (in our opinion) it can’t happen soon enough.
So is your business ready for the dramatic rise of programmatic video advertising? Here are five powerful reasons to start preparing now.
- More consumers are watching streaming video, and for longer periods of time
A recent study found that audiences are expected to watch more video, in longer formats, on connected devices including mobile handsets and internet-connected SmartTVs. With TV media becoming more addressable, an increasing number of advertisers are looking to programmatic video advertising to reach unique audiences at scale. The study also revealed that 72 percent of the hundred leaders interviewed for the study expect that video buying will become more programmatic in the next three year, while 71 percent think advertisers will shift advertising dollars from linear TV to digital channels over the next few years, up from 65 percent in 2013.
- There are more opportunities than ever to advertise with video
There are a greater number of publishers and platforms offering video advertising options. Facebook has increased video opportunities in the last year - and they credit those new offerings in large part for a 57 percent jump in revenue in the first quarter of 2016. Pinterest, Instagram, and Twitter also offer video advertising opportunities. Publishers like Forbes and others are offering more and more video content, so inventory is increasingly available. And of course, most streaming sites offer pre-roll, mid-stream and other opportunities. YouTube made headlines this year with its TrueView offering, in which advertisers only pay if their ad is viewed for 30 seconds or longer, making viewability a non-issue for change.
- Programmatic video advertising is exponentially more efficient than traditional TV advertising
Traditional TV advertising has always been a favorite because its reach has been unmatched. Advertising on the Super Bowl gave brands the ability to reach millions of viewers in every demographic. If you manage an accessible consumer brand Coca-Cola or Doritos, that kind of reach is ideal. Anyone in any home can and might go out and buy a bottle of soda or a bag of chips. However, if your brand is W Hotels or Jaguar or La-Z-Boy or even the musical “Hamilton”, you may be reaching millions of people who either aren’t in market for your product, can’t afford your product, or who simply live too far away from your product. Advertising on national television, or even regional television, may mean you’re paying for thousand or even millions of wasted impressions.
With data-driven digital video advertising, advertisers are able to reach only the audience they target. That means not only will the Jaguar ads reach people who can afford to buy a Jaguar, they will reach people who have shown signs they are in-market for a car. The ads for “Hamilton” will not only reach people in the New York area, they will reach people who are interested in theatre or the arts. One hundred thousand dollars invested in programmatic video will undoubtedly yield more measurable results than the same amount invested in tradtional TV advertising.
- Programmatic Video Advertising isn’t limited to a single screen or a single moment
It seems almost too obvious to mention, but the fact that programmatic video ads can be viewed across screens is a tremendous advantage over traditional TV. That means ads appear on mobile phones, tablets and desktop computers - whenever and wherever the viewer is engaging with content. And while programmatic display also give you the opportunity to advertise across screens, video provides a much more exciting canvas for creating stories that attract and engage viewers.
- Data makes optimization possible - and awesome
Because programmatic, by definition, is fueled by data, programmatic video advertising yields a ton of analytics data. That makes it possible to continually improve campaigns. As an example, if a certain creative isn’t yielding results across a certain audience, the creative can be changed well before the budget runs out. If one particular segment is producing very high results, the budget for that portion of the campaign can be raised so the ads are shown more frequently, potentially driving even better results.
If these five reasons aren’t enough for you to at least start considering programmatic video ads, all we can say is, look around. Notice the ads next time you’re surfing the web. Pay attention to your Facebook feed. If you have kids with mobile phones or tablets, be aware of how much time they’re spending on YouTube and Instagram. Look at the number of views on the latest Jimmy Fallon lip synch video or at how many people have subscribed to Netflix or Crave or Hulu. You’ll see it for yourself: if you’re not planning to at least test video ads within the next year, you’re potentially missing out on a tremendous opportunity.