The truth about programmatic video? It’s hard to do

Programmatic video is growing fast, in large part because of the maturation of connected TV (CTV) and over-the-top (OTT) ecosystems. By 2020, US advertisers will spend $19.26bn on programmatic video—triple what they spent in 2016, and accounting for 79.3% of all U.S. digital video ad spending, according to eMarketer.

Last year, ad requests across CTV devices increased 1,640 percent year over year, according to Beachfront, a video ad platform. These spend surges make sense—they reflect user behavior. Cisco’s Visual Networking Index report predicts that 80% of all consumer traffic in 2019 will be video. And on the OTT front, an estimated 54.7% of the U.S. population subscribe to OTT video services, according to eMarketer.

But just because programmatic video everywhere doesn’t mean it’s easy.

Marketers can’t just rely on the strategy they use for analog TV or digital. Programmatic video, specifically CTV/OTT, is a different animal. It requires access to the right audiences, unique targeting abilities, channel-specific inventory, reporting/optimization abilities, and fraud detection/prevention methods.

Programmatic video is new and nuanced, and since there are no industry standards yet, it is particularly challenging to navigate the space. Here’s what advertisers need to consider:

Types, formats, and creative

There are several types of video inventory (instream, outstream, in-display) and formats, and advertisers need to understand them to make the right choices. In 2019, we will see advertiser spend in interactive ad formats, including rewarded video, increase, as these types of ads drive engagement and can improve ad recall.

For CTV, creative needs to take advantage of the full-screen viewing experience. Advertisers also need to consider multiscreen storytelling, and how to own the second screen that is most certainly in the room. Using automatic content recognition (ACR) technology, they can map TVs to other household devices and serve simultaneous or subsequent programmatic video ads to reinforce their message.

Inventory and execution

Programmatic video inventory is fragmented and relatively limited, which makes it hard to find. Advertisers can now use much of the automation and algorithms that fuel programmatic display, but programmatic video also requires different technical resources to avoid errors that will disrupt the user experience and sabotage campaign effectiveness.

The best practices of digital are beginning to flow into the CTV ecosystem. For example, brands can use their first-party data for granular audience targeting. Optimization is also increasingly important, as is the ability to track metrics in real time, including viewability and completion rates. These are steps that simply weren’t possible before, and as such, not all solution-providers are equipped to take them.

Measurement and fraud concerns

Measurement is made more challenging by the lack of standards. It is inconsistent across devices, providers, and partners. While most publishers and platforms adhere to digital video ad-serving template (VAST) and video player ad-serving interface definition (VPAID) standards on desktop and mobile web-based environments, there is still the issue of differences in methodology among the main players in third-party verification, leaving advertisers to wonder who is truly measuring their campaigns “correctly.”

The same challenges present themselves in mobile app-based environments, with the additional challenge of limited VPAID inventory. This requires the presence of an SDK to facilitate third-party verification measurement, which many publishers and platforms are hesitant to integrate. These two challenges result in a very low footprint of mobile app inventory that is actually measurable, leaving a big hole in many advertisers’ media plans.

The challenge escalates with CTV/OTT, as publishers do not conform to any set of VPAID standards, nor have most third-party verification companies even developed CTV measurement solutions. Although publishers may not adopt VPAID standards in CTV/OTT anytime soon, we are seeing progress on the part of verification vendors in their ability to track basic viewability and fraud measurement in OTT app-based environments supported by VAST.

Like advertisers, fraudsters follow user behavior. Ad fraud is on the rise in the OTT/CTV ecosystem. According to DoubleVerify, an attack by a botnet last November generated a 40% spike in fraudulent impression traffic on CTV/OTT platforms. Marketers need to ensure they have the means for policing fraud.

The rise of specialty DSPs

Advertisers have dramatically reduced the number of DSPs they work with to reduce tech fees, according to eMarketer research. Consolidation makes sense when DSPs offer the same inventory and/or expertise. But 41% of programmatic buyers prefer to work with multiple DSPs and don’t think consolidation is a realistic option. These buyers rely on alternative vendors, in addition to a primary DSP, to navigate nuanced channels such as programmatic, even if they are likely working with fewer DSPs than they have in the past.

In fact, the nuances of programmatic video will fuel the heyday of video-specialized DSPs for the same reasons that healthcare consumers work with specialists beyond their primary care physicians. When you are dealing with a complicated, highly-specific medical matter, you want someone with niche expertise.

Programmatic video is complicated, but for marketers who can leverage it successfully, it is a real opportunity to connect and engage their audiences.

Tal Mor is chief technology officer of Tremor Video DSP

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