With a new year comes a new raft of predictions for what might unfold within it. PerformanceIN has been speaking with marketing experts in a number of disciplines to gauge their thoughts on what could make 2016 a groundbreaking year for their space.
In this piece, Greg Carroll, country manager for UK at StickyAds.tv, believes publishers will make the most out of video inventory in 2016.
There is no doubt about it; video stole the digital marketing show in 2015. Spend on video inventory rocketed by 56% in the UK, tipping budgets to over £290 million, while revenue from video ads in the European marketplace reached €375 million (£281 million). Thus, it is hardly surprising that video ad trading is becoming increasingly automated, and by 2020 half of video revenue will be produced programmatically.
However, there is a significant barrier to unlimited video marketing success – high quality video inventory is in short supply. According to a Forrester study, the issue is a challenge to both digital marketers and publishers – 40% of marketers feel it will impede the progress of the programmatic video industry and 44% of publishers are put off by the high cost of producing original video ad content.
In 2016, the industry will see publishers focusing on making the best use of what is available, utilising advanced technologies to drive the value of inventory, while improving trading efficiency for digital marketers. But how exactly will the new rules of video ad trading take shape?
Evolving from the insertion order
Commercially, any publisher that is close to selling 100% of their video inventory does not understand what their inventory is truly worth. While the sales team may be achieving their targets – through traditional insertion orders (IOs) – there cannot be any competition for the inventory.
The way to observe the true value of each and every impression is to trade it in a private exchange, either through auction-based deals accessible to a defined buyer list, or through programmatic direct deals. This enables publishers to avoid altering current commercial relationships while providing advertisers with guaranteed access to premium inventory. Agencies are moving away from the traditional IO business, as deal IDs are instead offering the desired valuable audience. Supply bought through a private exchange – via an auction or through direct deals – may cost more but will yield greater performance by granting access to quality inventory.
Connecting servers to avoid the waterfall
From a tech perspective, the waterfall approach traditionally used in programmatic bidding results in wasted inventory as impressions cascade from one buyer to another and many are left unsold or bought at a low price. So, programmatic video is likely to see a significant shift towards server-to-server technology, where impressions are simultaneously made available to all potential buyers, reducing waste, maximising CPMs and helping to address the supply shortage. Server-to-server technology also reduces latency, improving the user experience.
Widening the net on ad formats
Another way publishers will make the most of their inventory is by leveraging a wider variety of ad formats. In 2016, we will see publishers look to gain a balance between traditional in-stream video advertising such as pre-roll, and out-stream, such as in-text roll which enables publishers to monetise editorial content using video. For marketers, this will improve access to video inventory, as well as providing a greater range of placement options, increasing the flexibility of their campaigns.
The most important step forward this year will be to enhance the ability to trade online video ads programmatically, moving away from the restrictive network model and embracing the speed — and efficiency — of server-to-server connections.