Digital video series: The opportunities and challenges of video real-time bidding

The Drum catches up with a cross-section of the online video industry to discuss the evolution of online video advertising.

The opportunities and challenges of video RTB

As part of The Drum’s latest digital media supplement, focused on the opportunities of online video, we are publishing a series of articles exploring a range of topics, from how to produce effective branded content to how online video compares with TV.The supplement will be published next Friday, 25 October.In today’s article, we take a look at real-time bidding for video, as a cross-section of the industry explore the programmatic video market and dissect the key challenges of video RTB.Is real-time bidding (RTB) moving away from its direct response roots towards video?Tom Pepper, UK sales director, Vibrant Media and a member of the IAB Video Council Yes – direct response was the low hanging fruit for RTB; the emergence of the trading desks has largely replaced the traditional DR display network to deliver greater efficiencies across the DR market place. In the next 12 months the proportion of video bought through RTB will increase significantly as RTB moves into the branding and other formats. I believe RTB will follow the model of display by monetising the long tail, remnant video content. However, premium video inventory will continue to be traded in the traditional way.Nick Reid, UK managing director, TubeMogul Yes. According to IHS, programmatic video will be a £188m market in the UK within four years. At TubeMogul, we are seeing this momentum, running campaigns for hundreds of major UK brands in the past year.As a branding medium where impacting viewers is difficult, video advertising stands the most to gain from programmatic buying. Real-time iteration of creative and media strategy based on data takes on new importance when you are trying to inspire people to love your brand rather than simply drive clicks to a website.Leon Siotis, director, media and publisher services, BrightRollThe fact that the amount of digital video advertising is currently being bought in real-time, clearly demonstrates that RTB is moving away from being simply a mechanism to only buy direct response advertising. The ability to show the right ad, to the right person at the right time appeals to every advertiser no matter what their intent, and this is something that can only be done if you are making that buying decision in real time. Steve Chester, director of data and industry programmes, IABI don’t think it’s a case of moving away from DR to Video. Certainly we are seeing significantly more video being traded through RTB which is very positive. It’s more that real-time bidding will and is becoming a delivery mechanic by which a significant volume of digital advertising is and will be traded; it offers an efficiency and scale that can’t be ignored. It affords more time to be focused on achieving and delivering against campaign goals, and less time required on the operational setup and management.What are the challenges of RTB in video?Brian Fitzpatrick, managing director Europe, Adap.tvThe biggest challenge to the take-up of RTB is inertia. Traditional buyers have been doing business effectively in the same way for many years and the new ways of trading can seem too complicated to be adopted. This is reinforced by the need for technical knowledge to understand how to apply concepts such as data targeting, variable pricing and frequency capping.There is a lot of talk in the industry on the difference between ‘mad men’ and ‘math men’ – a story that is becoming a reality as advertising moves from being an art to a science.Gavin Morgan, VP, business development, Innovid In my opinion the main challenge is fragmentation of inventory. Currently, inventory that is accessible via an RTB process is predominantly the longer tail (vs the premium). As long as buyers are unable to access all inventory in one place and programmatic buying tools only cover a specific part of the market - RTB cannot flourish.Tom Pepper, UK sales director, Vibrant Media and a member of the IAB Video Council The main challenge is supply and demand. Unlike display there is not an endless supply of video impressions to trade in real time. There is a shortage of quality inventory to run branding campaigns via video. This means there’s more competition for the inventory, which has an impact on pricing. Hence being able to deliver a campaign in line with its KPIs can be a real challenge, simply because there are fewer impressions available when attempting to target audiences. Tracking cross platform video campaigns is also a challenge. A marketer’s desktop, tablet, mobile and TV video ad campaigns are generally all delivered via different platforms. Measurement companies have been trying to find a way to count the number of ad exposures a single person experiences, regardless of the video device they are using. The answer to the problem will more likely be found in the ad technology marketers choose. Leon Siotis, director, media and publisher services, BrightRollVideo has mostly overcome the technical hurdles associated with trading in real time. The biggest challenges now remain on the business side; UK advertisers still spend a large amount of their online video budgets with broadcasters who are in no rush to sell their inventory via RTB. Meanwhile, non-broadcast publishers are only just getting comfortable with making their display inventory available in a biddable environment, so it will be some time before they are open to video. However, this transition is occurring as we speak. On the advertiser side there is still an education piece required to show how digital video can support their campaign goals, and the next step is for the industry to prove the efficiencies that can be gained by using RTB to execute those buys.Steve Chester, director of data and industry programmes, IABVideo is predominantly a branding medium and as such we need to dispel the myth that RTB is solely a direct response medium. DR has perhaps been a significant driver in the historical growth of RTB, but we need to continue to champion the proven effectiveness of building brands online.Additionally, as with video more broadly it’s essential that more supply is driven into market. Demand still outstrips supply and this must be addressed to continue to enable the growth of video across RTB.Nick Reid, UK managing director, TubeMogul We are just beginning to see what is possible as we enter a data-driven age where advertising intersects with technology. One simple problem is the shortage of data scientists with a creative or marketing background to fill the jobs of this new era creates – people who can unify technology and data science with the art of advertising. It also remains to be seen whether digital will force creative and media agencies to merge and return to their full-service roots. In a world where marketers can control which ad gets seen – and where – based on immediate viewer reaction, creative and media blur and become more interdependent.The first part of the series explored the future of online video, and whether it can take over from TV advertising.Keyboard image courtesy of Shutterstock

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.