How big is the video programmatic opportunity
If numbers are anything to go by, the eMarketer figures showing time spent by media by US adults, forecasts mobile to overtake online this year and contribute 50% to the overall digital media consumption number. At an overarching level, digital media consumption has been steadily growing year-on-year over the past five years and now represents over 47% of all media consumption in US. TV media consumption during the same period has been declining and now only accounts for 36% of all media consumption - that’s just 10% behind digital. The gradual yet significant shift in consumer media consumption behaviour is challenging existing advertising models and forcing agencies to re-think for the first time how they allocate budgets in the future.
Traditional marketers have developed successful brands in the tried and tested way via access to massive audience scale on TV. Over the last fifty years or so, agencies have cracked TV advertising and more importantly consumers get it. The new shift in consumer media consumption behaviour has created fragmentation, forcing agencies outside of their comfort zones and think beyond TV to build brands.
Types of mobile video inventory
Video on mobile has been around for a while with pre, mid and post-roll - integrating video ads into video. Now advertisers are turning their attention to inserting video ads into applications and mobile sites, where there’s massive scale and publishers. A recent Mobile Marketing Association (MMA) study from April 2014 on mobile video advertising found that 75% of all mobile video ads were in-app.
Mobile video is in high demand and therefore buy side platforms need to provide buyers with access to massive scale of mobile video enabled ad inventory in order to deliver branding campaigns with audience targeting. The video standard VAST (Video Ad Serving Template), has lacked significant adoption by publishers and support from ad exchanges (few support VAST). The only viable option available to advertisers today that gives them massive scale and reach is HTML5 full-screen ads that run across mobile apps and sites. These run in any MRAID compliant full-screen interstitial on a smartphone that supports HTML5, which today includes all Apple and most Android devices. That’s over 95% of the global smartphone market.
How mobile video started
It’s only a few years ago that a handful of publishers in the UK offered pre, mid and post roll video ads and buys were small and limited to several advertisers. These buys were fully transparent direct deals done via insertion orders on the back of emails or telephones to run on large media and entertainment apps.
Benefits of programmatic mobile video
Enter programmatic, an automated technology-driven approach for trading advertising inventory. Platforms that host auctions are called ad exchanges and platforms that automatically bid for inventory on ad exchanges are called Demand-Side Platforms using Real-Time Bidders.
Ad exchanges that support programmatic Real-Time Bidding, are MRAID (Mobile Rich Media Ad Interface Definition) compliant and support full-screen ad formats for smartphones and tablet devices, provide Demand-Side Platforms with massive scale for global mobile video enabled ad inventory. RTB also provides a richer data environment for trading ad requests. These ad requests pass first party anonymous data that may include demographics, location or other fields that campaigns may use to reach specific audience groups. With the OpenRTB standard, DSPs in theory, can now support a more transparent trading environment that includes features such as white and black listing, exchange choice, domain blocking and IAB categories. This level of transparency and control will be mission critical for brand advertisers as they develop brand safe mobile video options for clients.
Programmatic video can be traded using the following advertising pricing models: CPM model that delivers impressions that meet specific targeting criteria (this model does not factor in any viewing activity into the pricing model, only delivery) and a CPV model that optimizes towards completed video views as a campaign objective.
Mindset shift - Video has traditionally been a premium buy access to a white list of high quality publishers. Programmatic trading or Real-Time Bidding forces a different mindset on the table with a new focus on seeking out audiences across many publishers at massive scale.
Quality of inventory - TV and online video buyers have been used to buying TV slots and videos on premium channels and publishers via direct buys. There’s an implied expectation that quality of publisher inventory will be a determining factor across mobile video buys for brands. Mobile video buyers may drive programmatic in the direction that video has always taken, direct programmatic deals and private exchanges.
Audience - Programmatic mobile video is just starting and audience data including demographics remain basic and not widespread outside of USA. TV buyers thinking about integrated campaigns that extend into digital and multi-screen will be seeking options for audience alignment or some sort of common currency that works across all media. The challenge for mobile video is therefore working out how to provide TV buyers with TV-like audiences.
Transparency - Given the premium nature of video buys, transparency will be high up on the agenda for agencies. Providing visibility across publications, audiences and metrics will be an important lever for driving spend upwards on mobile video.
Formats - The ideal scenario would be for TV, online and mobile to share the same video without need for additional creative or processing. This would deliver enormous benefit in maintaining consistency that would deliver a well executed integrated marketing communications campaign, leveraging any upfront effort in creative development and deliver reinforcement through a single, common brand message across all screens. In the booming online video advertising space, this is already happening today, the final piece in the loop would for the same to be valid for extending this to mobile.
Results - There’s a gap between TV and mobile video measurement as both still operate in silos. However, with TV and online budgets now extending onto mobile, there’s a requirement for a concept of cross-screen measurement, not only for obvious metrics such as views but also performance by audience groups common across all screens. That gap would enable TV buyers to fairly compare the performance of a cross-screen campaign and determine the effectiveness by screen.