Despite Obstacles, Programmatic Video Advertising Maturation Advances
Programmatic video advertising adoption continues to grow despite the automation still encompassing a minority share of total US digital video ad spending.
Programmatic advertising, an automated, technology-driven method of buying and selling digital display advertising, is changing the game for both buyers and sellers who see the value in using it to reach screen-agnostic audiences, as explored in the new eMarketer report, “Programmatic Video Advertising: Poised for Rapid Growth Despite ’Premium‘ Holdouts.”
Of the US advertisers polled by Digiday in February 2015, just over two-thirds had purchased video ads programmatically.
And while enthusiasm for automating the procurement of digital video ads remains high, investment trails in comparison to the broader digital display market. eMarketer forecasts that 59% of the $26.15 billion spent on US digital display ads this year will be transacted programmatically, but just 39% of US digital video ad dollars will be spent that way. By 2017, however, that portion will move closer to the broader average for programmatic activity (72%), accounting for 65%, or $7.43 billion.
“When it comes to video, programmatic from an inventory perspective is very different,” said Rany Ng, product management director for display advertising at Google. “Just the sheer fact that there’s scarcity in the market creates different dynamics, so we’ve seen many of our broadcasters and programmers becoming much more comfortable with participating in private marketplaces and striking private deals than they are with the open option.”
But for buyers, their concerns about programmatic extend beyond that of the scarcity of premium inventory and issues of ad quality. More and more buyers look to extend their video ads across all major screens in an effort to mirror the ways media is now consumers, yet outstanding issues associated with audience identification, targeting and measurement are hindering that directive.
Despite these possible holdbacks, eMarketer is optimistic that many of its issues will be resolved in the next 12 to 24 months, as evidenced in our latest forecast’s expected triple-digit jump in US programmatic video ad spending in 2015 and further 84.5% increase in 2016.
eMarketer corporate subscription clients can view the full report here.