Convergence has been one of the main themes in video during 2016, as more content traditionally delivered via broadcast channels is being converted to digital streams. The marketplaces of the future - programmatic or otherwise - are beginning to form as media owners piece together a range of sales techniques to maximize their yield. Some of the big trends and changes we expect to see in 2017 are:
1. The marketplace evolution continues: From open to private, to curated and reserved
With the end of 2016 in sight, SpotX is nearing 50% of ad spend going through private marketplaces, thanks to a shift from the open marketplace and the continual advance of the entire market into programmatic. Curated Marketplaces, a variation of private marketplaces (PMPs) created by grouping similar inventory from multiple publishers, have added fuel to the fire by solving some of the PMP pain points for buyers.
The next evolution is also afoot. Automated guaranteed - where buyers can reserve inventory from media owners upfront through their DSPs, and then transact those deals programmatically when the time comes - will become much more prominent in 2017. Reserving based on audience and common currency verification (both sides understanding the target(s) instead of just blocks of impressions) will also grow rapidly, so long as the challenges around transparency with first-party data when it is used, are addressed.
Automated guaranteed is likely to become standard operating procedure for TV media owners, to support the fulfillment of campaigns, as TV continues to evolve. For example, an advertiser may commit $20MM to a cable operator for an audience guarantee to be fulfilled across 50 cable nets across 20 SVOD and over-the-top (OTT) platforms at a unified CPM.
2. Connected TV will be bigger than mobile
In the past few years, media consumption shifted rapidly from desktop to mobile. Now the growth area will become CTV, with 56% of Americans consuming content through CTV devices, in growing quantities. There was a lot of hype around mobile, but we expect CTV to be an even bigger hit with advertisers due to its unique combination of big screen and addressability, and it’s propensity to engage the viewer in longer form content. The growth of CTV will come with extreme platform fragmentation, driving the industry towards server-side ad insertion (SSAI). In the first half of 2016, SpotX recorded a 329% year on year increase in the number of CTV publishers on its platform. The rise of OTT services that don’t require proprietary set-top-box infrastructure, like Sling TV, will drive similar growth in the CTV ad space in 2017.
3. Syndication gives rise to the hybrid publisher
More and more publishers are becoming hybrids, monetizing self-created and syndicated video content on owned properties, but also syndicating out video content of their own. We’re working towards a tighter integration between the management and syndication of content, and being ‘in the video player’ to know where the content is being placed. Convergence is the force driving this trend and 2017 will see media owners move in both directions, including the growth of multi-platform networks, like StyleHaul and BroadbandTV, monetizing outside of YouTube.
4. Programmatic TV paves the way for TV’s marketplaces of the future
The industry will move away from the term “programmatic TV.” TV will funnel into two marketplaces. The first, a one-to-any model in which the traditional TV ad transaction will continue to operate exclusively on the currencies of Nielsen and comScore. The second, a one-to-device (IPTV) model where live linear TV and SVOD ad opportunities are discoverable at a device level in real time, and audience fulfillment is an enumeration of delivered impressions.
5. The death throes of Flash
2016 was momentous for a number of reasons, with the developments in video consumption and monetization contributing to its significance. It’s fair to say the race to monetize video has reached fever pitch. For most consumers, ‘watching TV’ has become a mix of viewing traditional TV-style programming, and other quality video of varying lengths, as they juggle their remotes on the couch. CTV, as the primary delivery point for OTT content, will come into its own in 2017, but video consumption will continue to grow on all devices. The video arms race will intensify, and increasingly contribute to the media’s profitability.