The streaming wars increasingly reflect the plot of Infinity War (or Star Wars… it’s not a perfect metaphor). The growth of over-the-top television (OTT) continues unabated. Connected TVs are seemingly more commonplace than toasters.
All of this leaves advertisers and media brands asking: where are programmatic video ads headed?
Programmatic advertising is certainly in the cards for brands both large and small. And programmatic TV advertising continues to make headlines and big promises — even if it’s still a little confusing.
But one thing is for sure: the popularity of programmatic video ads is growing as the industry figures out measurement, inventory and growth.
How OTT Has Shaped Programmatic
With the streaming giants’ rapid expansion — fueled by Silicon Valley’s mantra ‘move fast and break things’ — ad tech had a difficult time keeping up with the shift from traditional TV to OTT.
Programmatic advertising was a natural fit for individual web properties and Internet-native video platforms. But applying the same ad tech to OTT (particularly with live programming) proved more difficult.
“Early adopters are finding that pairing digital data with connected TV and OTT ads isn’t a simple plug-and-play exercise,” wrote eMarketer’s editorial board back in 2017. “Those hoping to benchmark connected TV and OTT performance against standard digital video advertising metrics are also finding this a complex task.”
Programmatic advertisers in OTT have faced the unique challenge of translating the metrics of traditional TV and the data driving digital ads.
Fast forward to late last year. Buying digital ad space for OTT and Connected TVs is still difficult. But more laser-focused DSPs have popped up to support the demand.
“Comcast-owned FreeWheel is introducing a one-stop shop for buying commercials in these emerging forms of TV,” writes Jeanine Poggi at AdAge. “The suite of new ad products will allow buyers to access inventory from FreeWheel’s clients, which include more than 60 of some of the top TV networks and publishers that are being served on platforms like Roku, Amazon Fire, Google Chromecast and Apple TV, among others.” Similarly, Adobe recently acquired TubeMogul, a DSP aimed directly at programmatic video.
It’s DSPs like these that will allow programmatic video ads built for Connected TVs to scale in a meaningful way.
Now, Specialized DSPs Are Expanding Opportunities for Programmatic — Slowly
But that doesn’t mean it’s suddenly a straightforward affair.
Tal Mor is the CTO of Tremor Video, a DSP purportedly meeting these new demands. “Just because programmatic video is everywhere doesn’t mean it’s easy,” writes Mor. He says that programmatic video — and especially Connected TV or OTT — requires the right balance of ad tech to prove effective: “It requires access to the right audiences, unique targeting abilities, channel-specific inventory, reporting/optimization abilities, and fraud detection/prevention methods.” To drive this home, Mor writes that the lack of industry standards makes it particularly difficult to navigate the nuanced space.
That said, movement in OTT services is driving growth in programmatic video ad spend — albeit slowly and deliberately.
Automation is improving. Targeting is getting more precise. Metrics and benchmarks are catching up. And consumer demand only continues to rise, aided by an increase in mobile consumption. All of this translates into scalability and a better ROI for advertisers.
Mor, the DSP tech leader, writes that video-specialized DSPs have the best hope of capturing this value. Within their specialization, they can focus on ad formats and creative, inventory and execution, and (maybe most importantly) measurement.
The benefit is clear: a more engaged audience for cheaper than traditional TV. “OTT program producers focus on developing video programs for targeted, highly enthusiastic audiences instead of broad-based fare,” writes Barry Levine at Marketing Dive.
Programmatic video is a natural way to take full advantage of this benefit — and DSPs are starting to meet demand.