The buzz around programmatic advertising is pretty astounding. And if the buzz continues to come to fruition, it could not only continue to revolutionize the advertising industry, but the digital video industry as well. The transition of programmatic technology into video content could dismantle the barrier between television and digital video.
As a quick primer, programmatic is the automated, auction-based technology that allows advertisers to reach engaged, relevant users across any vertical in real time. It has become a major force in the market as we begin to see dramatic shifts in spending from major global brands searching for the most efficient ways to reach their target audiences. eMarketer revised its original 2013-2014 programmatic spending estimate from 73.9% to 75.3%, which may not seem like much, but that essentially was an increase from $3.37 billion spent on programmatic in 2013, to an astonishing $4.66 billion in 2014.
If you’re still not convinced of the scope, consider this: American Express, considered one of the most sophisticated in the use of online and digital, announced its plan to shift 100% of its online ad budget to programmatic channels. As the ninth-largest online display advertiser in the United States, American Express spent $128.5 million on online display ads in 2013. That means an equal amount—or potentially more—will get shifted to programmatic moving forward.
With the shift from traditional digital advertising into a programmatic approach, it is clear that machine learning based technologies have found their way into the video spotlight. The next step is for publishers to utilize similar technology offerings to increase the consumption of video on their web, mobile and OTT properties. By understanding content consumption on a one-to-one level in real-time, publishers will be able to push relevant content to audiences and facilitate an engaging user experience.
The divide between TV and video is characterized not only by economics, but that of user experience. Users rely on TV for the comfort of lean-back consumption, something digital has struggled to achieve despite providing users a wide array of content and choice.
It only makes sense that the shift in ad tech be mimicked by content delivery in order to increase overall video consumption while creating a highly engaging user-experience. By applying the same programmatic technology to online video, overall consumption has and will continue to increase across connected devices, which in turn will maximize the impact of programmatic ad placements. Utilizing this video optimization approach, publishers have the ability to increase total consumption while improving margins through programmatic ad placements turning digital video into a highly lucrative sector.
By controlling how programmatic content delivery is utilized, publishers have increased flexibility in how content is presented to individuals; similar to the way they have maximized innovations in ad tech. By utilizing the wealth of digital data available, companies can potentially maximize the value of their content and audience while creating a scalable space for both publishers and advertisers.
The use of programmatic technology in both content and advertising complement one another nicely. With the major shift in video delivery technologies, publisher have the ability to not only improve ad margins through utilization of programmatic placements, but increase pure consumption and maximize the value of their content and audience. This undoubtedly makes video a lucrative corporate strategy and one with the highest growth potential.