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Programmatic video spend set to rise but hurdles still to be overcome

Programmatic video spend set to rise but hurdles still to be overcome

Programmatic spend on video is set to rocket in the next year, with over 80% of respondents to a survey conducted by The Drum in association with The Trade Desk expecting to increase budget allocated to it.

The growth in programmatic advertising spend is likely to migrate from display advertising, followed by linear TV and print, according to the new report.

The Drum surveyed 200 agency professionals with responsibility for purchasing media to gain a more detailed understanding of what clients expect from programmatic video.

The findings of this survey were then debated by an expert panel of programmatic thought leaders. The survey data and the ensuing debate fed into the production of The Drum Market Insight Report: Programmatic Video Edition, in association with The Trade Desk. You can download a copy of the report here.

Despite the huge potential for growth, programmatic technology has yet to fulfil its potential as a mainstream way of purchasing video inventory with clients still too cautious about cost, viewability and wastage, according to the report.

Agency executives also believe that brand trust, fraud and ad blocking are other significant challenges holding back adoption of programmatic video, according to the report.

The research indicates that less than half of clients (46.2%) serve video programmatically, though over a third of the respondents’ combined overall video spend is served in this way.

Mobile to lead growth

Most, however, expect major growth – particularly on mobile – over the next few years.

The Trade Desk’s UK general manager James Patterson says that, while waiting for mobile inventory to grow and creative to mature, the technology is waiting. “Technology can track a user from the top of the funnel to the bottom. We can tell people a story across all different mediums, channels and devices.”

The overwhelming majority of those surveyed (88.5%) expect spend to increase over the next year – and nobody expects a decline in spend transacted this way.

That will be assisted by broadcasters and publishers, who are increasingly embracing the technology and investing in more premium formats and improved measurement and metrics.

Danny Hopwood, Vivaki vice president of solutions and platform operations (EMEA), notes: “Broadcasters are opening their doors to programmatic technology”. Not least, he says, because of a potential plateauing in linear TV viewing and an increased consumer appetite in video on demand.

Dan Hagen, Carat’s UK chief strategy officer, believes that video is the future – one “much more powered by data and what people want rather than what you want to shovel at people”.

When asked if clients understood programmatic distribution, education, knowledge and understanding remains a concern – although almost half of those surveyed believe that their clients either had a “reasonable” knowledge (43%) or “in-depth understanding” (2.4%).

Justin Taylor, Teads UK managing director, says that while 18 months ago clients were investing in data taxonomy they are now asking how they can use it – “and media is the first area they’re asking that in. That’s raised the bar of programmatic.”

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