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PROGRAMMATIC VIDEO

CHALLENGES AND OPPORTUNITIES

Challenges and Opportunities of Programmatic Video

• If Growth is so robust, whey aren’t we betting the farm?

• Current challenges around accurate programmatic buying of video

• Where to find the opportunities in programmatic buying and make the most of them

• Some common misconceptions about buying programmatic video

• Who should be buying programmatic – agency or brand?

Growth Growth Growth

• If you combine the topics of Programmatic, Video and Kim Kardashian’s backside, you would have the three most popular topics on the internet.

• If we drop the Kardashian topic, we are left with the impression that if you aren’t buying all video all the time through programmatic channels, you’re career is already over. Never fear.

• Are the growth numbers real? Well, sort of….

We are all being knocked over by video views…

Publisher inventory is increasing

For the most part, prices are staying steady or dropping slightly

While Pub direct purchases through Programmatic increase

Predictions, Predictions, Predictions

• We’ve all heard the numbers….

• US Video Market will be $17 billion by 2017. Different fortune tellers have different numbers, but there is no question the market is rapidly growing, especially on mobile formats.

• Programmatic spending is increasing in every channel.

So why aren’t we selling the farm, mortgaging the house and going all in?

Serious Challenges still exist for all video programmatic buyers – agency or brand:

• Horrendous definitions of viewable video – 50% of pixels “in view for 2 seconds”. Have you tried to sell that to a client?

• Lack of insight into page placement of video ad unit

• Flat out Fraud and the ability to measure it

• Pre-bid filtering tools are inconsistent

• MRC certified tools to report on post buy results generate radically different results

• Do we even want to talk about accurate mobile video tracking for either engagement or location?

More reasons that we still have a lot of work to do on video

• In fact, more than half of all video ads appear in locations that are not immediately visible to internet users, according to a recent study by the video ad-serving platform Vindico.

• There are several reasons why this might be the case, which often overlap with one another:

• More than 90% of non-viewable video ads play in an inactive window, according to a report by TubeMogul.

• Just over one-fifth play out of frame.

WHAT’S A DIGITAL PROFESSIONAL

SUPPOSED TO DO?

Why are these limitations so relevant to both agencies and brands?

• We shouldn’t care about CPMs

• We shouldn’t care about clicks

• We shouldn’t care about Tiers (horror of horrors) unless there are specific audience segmentation goals are one of our KPIs

• We should only care about cost effective consumer engagement to downstream KPIs• Completed views• Click through to site with low bounce rates• Completed consumer action(s)

• Without a clear definition of accurate inventory being delivered, we will bid incorrectly and calculate media performance incorrectly

Is this current period of consolidation bringing innovation to an end

• God, I hope not

• As previously noted, there is still so much to do to make programmatic video really work

• Personal prediction – the companies with scale are being bought up to provide strategic puzzle pieces (Brightroll / Yahoo), but the technology that stitches all this together still needs to be developed and perfected

Consumer interaction should drive your planning and buying

• With video being a tremendous delivery platform for mobile devices (as compared to static display), there remains a tremendous amount of work to be done in that arena

This is a medium that will drive CTRs

So what are some of the great opportunities?

• Multiple Flavors of Programmatic. Forrester likes to define them as:

• Proto-programmatic:• Programmatic direct:• Private exchange:• Open exchange:

• Yet… how many words have been written about which is the “right way” to do programmatic? Hint: with the possible exception of “proto”, make them work to the eCPM or eCPA that your media goals are built around.

• Mix and match. Test. Try new things. Don’t get suckered into the “right way”.

With consumer interaction and infrastructure, the opportunities are now

• RTB display spend will total $4.86 billion in the US this year, making up 22% of total display ad spending.

• By 2018, that amount is projected to reach $12.02 billion – 30% of all US digital display ad spend.

• Video RTB is also seeing impressive growth. Forrester Research, forecasts video RTB spend to hit $1.14 billion in 2014 (284% increase since 2012). This will account for nearly 25% of U.S. online video advertising spend.

• Projections are that mobile RTB will comprise 45% of all mobile ad buys by the end of 2014.

Other opportunities to keep your eyes open for

• We forecast that tablets and smartphones will account for a majority share of video ad views by 2016.

• Streaming devices and connected TV accounted for just 2% of online video ad views in the fourth quarter of 2013, but companies like BrightLine are experimenting with formats to grow this new niche market. Another company, Alphonso, is employing a second screen strategy — using video ads to complement TV advertising.

Other great opportunities?

• Under Optimize. Yeah, that’s right. Under Optimize. By about 10%

• In other words, leave some of your programmatic budget (probably open exchange) available for audience discovery

• Great planners are a joy to work with, but you never now when you will stumble across a new audience segment that was previously unknown. All of a sudden, your display, search and CRM strategies can change based on segmentation discovery in programmatic.

WHO SHOULD BE BUYING?

BRANDS OR AGENCIES?

It Depends who is buying the rest of your media

• If you, as a brand, are already handling RON, SEM, Display Programmatic and CRM, of course it makes sense for you to do it in house.

• I would highly recommend that you also feed the results through one of the better fractional attribution modeling tools.

• However, if you are bringing programmatic in-house for the following reasons, you are probably fooling yourself:

Bad Reasons to bring Programmatic In-House

• Brands think they are cut off from those who know the most about programmatic - AdTechfirms

• Strategic Planning - there is a belief that the Adtech partners understand data and strategy

• Brands think they need to communicate technically with the AdTech partners. Agenices are portrayed as having problems with simple technical issues like placing pixels

• Data ownership - yes, this is real, but don't brands want all the data?

• Cost Savings – this seems obvious, but it really isn't.

How thoroughly have you vetted your agency?

• Meet their programmatic teams. Not the Adtech firms who manage the account, but the agency individuals that are actually pulling the levers.

• Are they sitting next to the planners, SEM professionals, RON buyers and CRM segmentation professionals? They should be.

• Are they having constant interactions amongst one another around consumer activity they see throughout the course of the campaign?

• Are they interacting with agency strategists?

• Is the data going back into a fractional attribution tool to determine eCPMs and eCPAs for bidding and negotiation purposes?

If your agency doesn’t hold up, then fire your agency

• Are you, as the client, holding them responsible for hard, quantifiable downstream KPIs around consumer engagement?

• If you answered “yes” to all of these things, then why bring the work in house?

• If your agency couldn’t answer “yes” to all of these things, find a new agency

So, if I can leave you with three things…

There are more “tomorrows” than “yesterdays” in programmatic video

• You are not too late to Programmatic Video. There will be seismic shifts happening in the landscape in all four “flavors” of programmatic bidding for quite some time.

• Viewability, placement and fraud are big. They are serious. Make sure you or your agency has made these issues a top priority.

• Regardless of what media vendors tell us, there is no silver bullet. Your budget should include regular testing of new vendors with 3rd party, independent reporting on the results.