What is Programmatic Advertising?
Programmatic advertising is a term that refers to the use of intelligent software or bots to purchase digital video advertising space online. Essentially, the practice uses an algorithm operating in real-time to replace a variety of menial activities and improve on targeting and cost-efficiency. Programmatic video advertising as an emerging industry essentially has two ends. On one end, sellers who want to monetize their media networks by making their ad space available on sell-side platforms (SSPs), while on the other end, advertisers who bid on and purchase video ad space based on set criteria given to the bots via demand side platforms (DSP’s). The two platforms are connected through an ad exchange where the software will check if the two criterias align and the ad space will go to the most suitable bidder. This is a process known as real-time bidding.
How can Programmatic Video Advertising be used?
Programmatic advertising can be used in a number of ways to benefit various industries. It can be used to expand the reach of video ads by more effectively targeting groups and demographics that are likely to be interested in the product or service. Many companies have also switched to programmatic as a response to a lack of resources or a dip in profitability. Programmatic advertising as a whole has been shown to dramatically increase the effectiveness and efficiency of advertising campaigns, as well as to make better use of dedicated ad budgets.
Programmatic video advertising can be used across various digital platforms, including online, in-app, on TV, and in digital out-of-home (DOOH) displays. Online, there are three main programmatic video advertising formats:
- In-stream ad placement: These video ads appear at the beginning, in the middle, or at the end of online videos.
- Out-stream ad placement: These video ads appear in the middle of online articles (often as pop-ups).
- In-display ad placement: These ads appear as separate videos, displayed alongside the content that the user is consuming. They require the user to make an active decision to click on the ad.
In-app programmatic video advertising is growing in popularity, as more people are using mobile apps to watch videos. Mobile apps also provide more accurate audience targeting, as they often collect more detailed user data that can be used to target and personalize ads.
What are the benefits of Programmatic Video Advertising?
Aside from the cost-effectiveness that comes about due to the reduction in menial labor required, a better use of dedicated resources, and increased ROIs, programmatic video advertising offers a number of additional benefits. First, the software enables marketing teams to collect valuable and comprehensible data on the audience that is viewing their video ad content. Ad-buying algorithms are increasingly being developed to learn and adapt based on this data. This learning curve provides a road-map for marketers to understand who is really interested in their product and underpin their target audience, helping them to determine whether or not they have misidentified their key demographics. As a whole, programmatic video advertising allows marketers to take a step back from the details and focus on the big picture when it comes to strategy.
Sightcorp’s anonymous audience analysis technology can be utilized to provide insights that help to fuel the programmatic buying process. The audience insights collected by the software, such impressions, no.of viewers, audience demographics and audience attention times can help advertisers ensure that they present relevant ads to their specific target audiences and are purchasing the right inventory to suit their video marketing needs.
Why is Programmatic Video Advertising important?
Programmatic video advertising is important as it provides marketers with a new platform in which to reach their target audiences outside of the home where they are most likely to be engaged. Many people are experiencing digital fatigue and are reducing the time they spend online as a result, therefore it is important to deliver video marketing content when and where consumers are in an open mindset to receive it. It also enables ad space to be bought and sold automatically ensuring media owners can sell up space their ad networks more easily.
How Programmatic Video Advertising works
Programmatic video advertising requires a number of key players and software to deliver its impressive results. One aspect involves algorithms and AI that use data, such as that obtained from cookies, to paint a clear picture of the kinds of visitors and viewers that advertisers should be targeting. This can either be done in-house or outsourced to a data management platform. Another aspect involves advertisers connecting their ad-buying software with an SSP. Publishers use the SSPs to advertise their content and sell ad space based on attention data that the SSP itself has acquired.
Data-driven Programmatic Video Advertising
The foundation of programmatic video advertising is personalization. Understanding the customer, by drawing behavioral insights from data, is the key to an efficient programmatic advertising strategy. There are three tiers of data to be considered for programmatic video advertising: first-party data, second-party data, and third-party data.
First-party data is the advertiser’s own data on the customer, based on primary research. Second-party data is customer insights collected by a constituent of the company, such as an agency. Third-party data is data that is available to the public at a cost and is usually sold on a rate card basis.
Data-driven programmatic video advertising enhances targeting. In digital out-of-home (DOOH), for example, there are a variety of triggers that can be used: time of day, weather, stock trends, outcomes of sports events, face detection, etc. This means that a far greater proportion of meaningful impressions, relative to the total number of impressions, can be achieved through the precise data triggering capabilities of programmatic video advertising. The goal behind programmatic video advertising is to deliver the right ad campaigns to the right audiences in a more appealing way, all in an effort to spur conversions and sales. Audiences are a lot less likely to ignore ads if they are tailored directly to them.