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Everything you need to know about: Programmatic video

It can be hard to keep pace in this fast moving industry, which is where we come in. The Drum has teamed with the Trade Desk for a series of short video primers and accompanying features in print to tell agencies and brands everything they need to know about complex issues. This issue, it’s the turn of programmatic video.

Programmatic isn’t just for banners any more. Video is a fast-growing part of the programmatic ecosystem – and for good reason.

More than $2bn in video ads will be transacted on programmatic platforms in 2015, effectively tripling 2014’s digital video spend, according to a report by IPG’s Magna Global, and the Trade Desk’s UK general manager James Patterson says we’re only yet at the thin end of the wedge.

Such growth is being driven both by increased demand from advertisers and their media agencies and by publishers themselves. Publishers and broadcasters are looking beyond straightforward display to better monetise their premium inventory through deals such as ‘programmatic direct’ where inventory is traded in an automated fashion via private market places (PMPs).

In fact, the IAB estimates that up to 80 per cent of all digital advertising will be spent programmatically by 2018 – and much of that will be due to the rise of video and mobile ad spend traded this way.

Advertisers are increasingly purchasing programmatic video ads to run on devices from desktops and tablets to mobile phones and connected TVs. And, as News Corps’ estimated £114m deal to buy video ad tech company Unruly shows, there is real industry appetite for all things video.

Put simply, the emotive power of video is hard to match. As Patterson says: “Did a banner ad ever make you cry?” TV or TV-style content, he says, remains the gold standard for brand advertising – often an event in itself, such as John Lewis’ Christmas spots – but is out of reach for most because of the way it is traded.

With programmatic, that changes. He cites the example of a charity that wanted to run a branding campaign. Its research identified women with graduate degrees, young children and a Suburu were most likely to become donors. Yet traditional TV was not an option as the nonprofit would have to buy programmes or dayparts that indexed highly to that audience – an approach far too expensive and not targeted enough.

However, using programmatic advertising he says the charity could spend its budget showing video ads only to that targeted audience. “Using rich digital data sets advertisers can determine whether their ads are driving consumers to visit their website, and what actions they take once there,” he says.

Advertisers are able to achieve major branding and awareness goals while targeting very specific segments. For the first time they are able to demand the same metrics for video content that they expect from the rest of their digital buys. Soon, he predicts, even ‘linear’ TV will mostly be traded programmatically – and that will change marketing forever.

Linear TV still accounts for around 40 per cent of the $554bn global ad spend, according to ZenithOptimedia’s most recent Advertising Expenditure Forecasts, although digital is predicted to overtake it in 2017. With technological innovations such as digital set-top boxes and connected TVs, and with consumer viewing also increasingly shifting online, these two once disparate worlds are converging.

In the US, which is leading the way, programmatic accounted for two to three per cent of TV spend last year and will account for 17 per cent, or $10bn, by 2017 according to Magna Global predictions. “I believe that all television advertising across all channels will be brokered programmatically in the future,” says Patterson. He points to innovations such as the programmatic forward market where advertisers are able to reserve inventory on an upfront basis as they do today, with guarantees for the inventory and penalties for the publisher if it doesn’t follow through.

Adds Patterson: “The fragmentation of media and viewing habits makes it harder for marketers to reach a broad audience at scale, but the targeting possible in the new digital delivery of TV and video far exceeds what is possible in traditional TV.”

In short, advertisers have long understood the power of TV advertising – programmatic video gives them that, combined with the robust audience targeting that they get with the programmatic market. And with not a single impression wasted, even smaller brands can invest in the audio-visual content we love to watch.

Everything you need to know about programmatic video is the second in a new EYNTK series designed to help viewers quickly get up to speed with some of the most important issues in today’s marketing industry.

From debunking common myths to explaining the intricacies of private market places (PMP) and the forward market plus exploring the agency of the future, EYNTK about programmatic aims to give you the knowledge you need to engage intelligently with programmatic advertising.

The EYNTK video series has now launched – the first video can now be viewed above.

More information can be found in the EYNTK hub.

For more insights into programmatic advertising and data come to The Drum's Programmatic Punch event in London on 8 December.

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