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Why 2017 is set to be the year of the video

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Why 2017 is set to be the year of the video

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2017 will be a watershed moment for video, as consumption moves from the TV to other devices [1].

As technology develops we’ll see more immersive experiences like virtual reality that are intrinsically linked to video, which will mean advertising and publishers follow suit.

In an increasingly mobile and video-focused world, programmatic video is a huge opportunity market, which has the potential to be worth over USD$100bn. Programmatic video is slightly different to traditional advertising; in that it uses real-time data to get a video ad in front of the right customer at the right time across all screens.

But programmatic [2] is more than just automation, it’s about optimized automation that uses data to make the delivery of ads, more efficient, relevant and effective.

Programmatic video

Though many people believe programmatic display led to a ‘race to the bottom’, programmatic video has flourished. Publisher adoption of programmatic video is increasing year after year, with the UK forecast to be worth $600m by 2020 and programmatic accounting for 50% of all trading this year.

There is no doubt that 2016 was a seminal year for the programmatic video market, and I fully anticipate that momentum to carry into 2017. Video has witnessed inordinate growth in the last few years; so much so, that Syndacast predicts that 74% of all internet traffic in 2017 will derive from the channel.

60 percent of U.S. digital video ad [3] spending is expected to be transacted through programmatic channels this year.

So, it’s clear that publishers and advertisers accept that programmatic is a bona fide solution that drives sales and profit. Beyond video, there is also a huge opportunity for SSPs in mobile. 65% of digital video time is now spent on mobile, so not operating in that space is a missed opportunity.

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As demand for more targeted video advertising increases, publishers are turning to specialist programmatic platforms to drive sales. We saw a string of acquisitions last year, consolidating many of the last remaining video pioneers and with many of the traditional ad tech giants readying their tech stacks for video.

Facebook’s closure of LiveRail unlocked a huge opportunity for sellers who need an independent platform built specifically for video. Some publishers have tried to employ their existing display supply side platforms (SSPs) to trade their video inventory, but display SSPs are simply unfit to for video.

Some sellers go down that route because they don’t have that much video to sell.

Video generates such high CPMs, even if a publisher only has a couple of 100k video requests which aren’t being sold, it’s worth it to them to work with a partner who can help sell it programmatically.

SSPs represent the publisher and have tools in place to ensure that the seller’s inventory, wherever it’s coming from, is being sold at the right rate to the right demand partners.

The industry clearly sees the value of digital video, but many programmatic solutions are just not set up to handle video. As demand for more targeted video advertising increases, publishers are turning to specialist programmatic platforms to drive sales.

Many of the major AdTech and MarTech players are aware that building their own video marketplace or ‘fit-for-purpose’ technology will take too long.

So, whether it’s in partnership or as an acquisition, they are approaching teams who have specialised in video since day one, because they are far more likely to be able to maximize for the opportunity in video.

Many premium publishers are also now focusing on video, placing it at the heart of their content strategy. The BBC’s plan to increase video five-fold in 5 years is a great example of that trend in the UK.

Andy Morley is Tremor Video’s UK MD and a contributor to ClickZ

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References

  1. ^ devices (www.emarketer.com)
  2. ^ programmatic (www.clickz.com)
  3. ^ 60 percent of U.S. digital video ad (www.thedrum.com)
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