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Programmatic Video Advertising: What You Need to Know

Whichever website or social media platform you visit, videos will inevitably meet you there. In the past decade, their popularity has grown, and it shows no sign of declining. Indeed, Statista revealed that 85% of all internet users in the United States watched online videos on any device in 2018. Globally, the figure is equally impressive, with 78% revealing they watch online videos every week.

Today, videos aren’t only being used for entertainment purposes. Namely, 81% businesses have acknowledged the importance of this medium and are using it as a marketing tool. This doesn’t come as a surprise. Specifically,  54% of consumers want a brand they are supporting to publish more videos.

So, it’s obvious that the demand for this content type is increasing. As a result, this medium has become one of the most popular ad formats in the digital advertising world. With the development in technology, advertisers and publishers can now easily buy and sell online ads while ensuring their content reaches the right audience. “How is this possible,” you might wonder.

Well, it’s all thanks to programmatic video advertising. And today, we’ll take a closer look at it, different advertising options you have, and more.

Here we go!

What Is Programmatic Video Advertising?

Programmatic video advertising has made it easier for brands to promote their products or services online. How? Well, because an online platform helps marketers find and purchase ad space for their businesses. Then, that platform uses complex algorithms to locate the targeted audience to whom it will show relevant ads during their time on the internet.

As an advertiser, all you need to do is set your ideal audience, give access to your ads, and then set a budget. After this, the program analyzes the data and starts the process of real-time bidding. During this time, your ads are displayed to a publisher who fits your needs most.

See? It’s a piece of cake. Let’s now see why you should use programmatic video advertising.

Why Should You Use Programmatic Video Advertising?

Before programmatic advertising emerged, everything was done the old-fashioned way. Without a complex program, you had to purchase and sell ad space yourself. Media buyers were in charge of inventory and they would negotiate ad placement with multiple companies. As you might guess, this process proved to be slow and inefficient.

In other words, an advertiser would need to contact a publisher. Then, they would negotiate a specific number of impressions for an ad based on the needs and budget of the advertiser. The publisher would deliver the ad to a target audience and promote the business. However, as the demand for ads increased, it was impossible for advertisers to manage. The industry needed something revolutionary. It needed programmatic video advertising.

This was when data and machine learning came into play, changing the advertising world for the better. Programmatic media buying platforms make it possible for brands to buy ads through an ad exchange. In turn, brands now have a number of advantages in front of them.

Firstly, there is no need for a middleman here as everything is executed through an automated bidding system. This makes the whole ad buying process more efficient. Secondly, the beauty of programmatic video advertising is that it uses behavioral data to locate your audience and deliver the perfect video ads to them. With the help of the gathered data, it serves ads on mobile devices, computers, and even TVs.

Finally, it gives you real-time data which is, as we know, every marketer’s dream. So, you will have tangible results to see whether or not your campaign is performing well.

Although efficient, programmatic advertising comes with certain challenges. Let’s check them out below.

The Pitfalls of Programmatic Video Advertising

Programmatic video ads have various benefits that show you should consider using them. However, as most things, they also hold certain pitfalls. And we believe you should be aware of that before making your decision. Now, why don’t we see why some advertisers are wary of programmatic advertising.

Ad Fraud

Admittedly, this issue isn’t exclusive to programmatic video advertising only. Online display advertising in general faces fraud risks as well. eMarketer reports that ad fraud is a concern for 48% of programmatic professionals. And it’s understandable. Let us tell you why.

As you might know, impressions are everything in this industry. Most marketers and advertisers focus on the number of views and clicks their ads have. They want to know that the data in front of them is accurate, showing how many people have seen their ads. Now, the stress here is on people and for a reason. In other words, sometimes software applications run automated tasks. So, it appears as if people have viewed your video content when in fact they haven’t.

Ad fraud occurs when impressions and clicks come from a bot rather than a customer. This is a major problem in the industry today. Because those bots interfere, the budgets for ads increases, but advertisers don’t have results to explain their spendings. The reason for this is that a bot viewed their ads, ruining their efforts.

To combat this, even Google has software to detect invalid activity. The tech giant works on detecting fraudulent clicks before they appear in your analysis. Although commendable, this software still needs to be perfected.

Lack of Control

Another pitfall of this type of video advertising is lack of control. You don’t really have a say in where your ads appear if you’re using ad networks. However, you can overcome this by choosing a reliable ad network that has a diverse portfolio. Also, make sure to provide those ad networks with as many details as possible about your audience.

Lack of Knowledge

New technology brings with itself numerous problems. One of them is certainly lack of knowledge. Marketers need to learn numerous new acronyms and study tech language. This helps them be at the top of their game. However, if programmatic video advertising appears difficult at first, don’t worry. Almost 50% of the people using it doubt that they understand it!

As you might see, there is a wide range of platforms out there. And each one of them feels foreign to a marketer. This is because every platform has a different approach. Not only that, but also they have varying views on what works best. In the end, you’ll have to decide what suits your brand the most.

Nevertheless, if you want to make an informed choice, learn more about programmatic ads. Go over as much information as you can. Along the way, you’ll inevitably discover numerous types of programmatic media buying. And that’s what we will cover next.

Programmatic Video Advertising: Media Buying Types

There are three major programmatic deal types used in the industry. Each of them dictates how the ad delivery will transpire. They are:

  • Real-Time Bidding (RTB)
  • Private Marketplace (PMP)
  • Private Marketplace Guaranteed (PMPG)

Let’s find more about them below!

Real-Time Bidding (RTB)

Real-time bidding is a well-known term in the digital advertising world. It refers to the process in which advertisers purchase video inventory on a per-impression basis through auctions. This means that advertisers can bid for and buy ad space on a publisher’s site. These slots are available to everyone in RTB. Of course, the space goes to the highest bidder in the programmatic video advertising world.

Even though RTB is easy to optimize, advertisers say it lacks transparency. Specifically, they know which category publisher falls into, but they don’t know where their ads will appear.

Private Marketplace (PMP)

Private marketplace is similar to RTB in all aspects except one. Namely, advertisers can bid for ad slots only if publishers invite them. This is an invitation-only marketplace that allows publishers to offer premium video inventory to a selected group of advertisers. Unlike an open marketplace, a private marketplace provides publishers with more control over advertisers and types of ads that will appear on their websites.

There’s also one benefit of using PMP that advertisers love. Namely, during bidding, the publisher’s website is revealed to them. With this information, they can accurately measure return on investment of each video ad.

Private Marketplace Guaranteed (PMPG)

Obviously, private marketplace guaranteed is also an invitation-only marketplace. However, here, one publisher makes their ad space available to a single buyer. Therefore, a publisher guarantees a total spend to that one buyer. Advertisers favor this programmatic deal type because it’s transparent and offers real-time data.

Closing Thoughts

Programmatic video advertising will continue to evolve in upcoming years. Hopefully, further developments in technology will remove certain pitfalls, including ad fraud. When this happens, more advertisers will feel comfortable to use programmatic advertising.

For now, our advice is to arm yourself with knowledge. Find out as much as you can about an ad exchange. Always keep track of new buying methods. And, lastly, review every report to ensure your budget is spent accordingly.

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