Wednesday, March 26, 2014, 9:08 AM ETPosted by:Troels Smit
VP of Demand Sales, LiveRail
Programmatic video advertising came of age around the recent Super Bowl. Many video publishers, offering an unprecedented volume of pre-roll ads programmatically, sold out all available inventory for 24 hours before the game and 48 hours afterwards at record CPMs.
The Super Bowl of course has special appeal to advertisers because it's perhaps the only TV event where consumers actually make a point of watching and caring about the commercials! But the increasing desire of marketers to supplement buys in big live TV events with online video advertising shows no signs of abating. From the recent Golden Globes and Grammy Awards to the Winter Olympics and Oscars, advertisers are increasingly using the programmatic marketplace to gobble up pre-roll inventory on sites that reach prospective customers.
For the Super Bowl, alcoholic beverages, fast food restaurants and automotive brands bought out pre-rolls on mostly sports, music, and entertainment sites. In the 24 hours leading up to the Super Bowl, automotive advertisers spent about twice as much as financial service providers did. Additionally, marketers spent 31% more after the game than before the game. That demand drove up CPMs, satisfying publishers, while the resulting lack of regular online inventory drove advertisers - perhaps for the first time - to other types of video inventory, such as smartphones, tablets, gaming devices, apps and connected TVs.
During the Winter Olympics - which promised two straight weeks of continuous related online video advertising -advertisers had time to reflect on solving three key challenges that still face them when buying programmatic video.
1. Cross-channel buying and measuring. Today's new inventory now includes: online, mobile, tablets, Xboxes, smart TVs, and even in-apps. How can advertisers place one buy instead of buying separate online and TV campaigns? And then, how can they determine how campaigns fared across channels instead of on particular screens?
2. Limited inventory. Of course, video inventory has always been limited on traditional TV, but online advertisers have become used to display ads where publishers can easily meet demand by increasing the number of availabilities. Video publishers are now solving this problem by rapidly adding more new original content, which expands inventory concurrently.
3. Inability to provide broadcast TV-like demographic measurement. Both Nielsen, with its OCR (Online Campaign Ratings) and comScore with its VCE (Validated Campaign Essentials), are working to provide advertisers with online audience data that will allow the buying of programmatic video in familiar formats.
Analysts like Magna Global Research project programmatic's share of video ads to reach 69% by 2017, but that timeline could change dramatically if the industry doesn't come together to finalize the solutions to all three of the above challenges. What unites all three is the need to unify all video inventory - mobile, online, connected TVs, gaming and yes, even traditional TV - under a single programmatic banner. This year's Super Bowl may have been set online video records, but bigger victories lie ahead.