Start investing in programmatic video

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Stijn Smolders

While ‘programmatic’ is a word that scares media owners and media agencies alike, it’s slowly moving towards becoming a global standard in digital advertising around the world, and is now being touted as ‘the next big thing’.

It’s all about the data. Big data has been a trending topic for a few years now; and as marketers and advertising agencies start harnessing consumer data with the appropriate tools, clever digital folk have been streamlining digital advertising to reach the right customer at the right time using all that data.

Programmatic advertising is simply, the automation – using software – of the buying and selling of desktop display, video and mobile ads, with real-time-bidding. As Forbes magazine outlines: “Programmatic describes how online campaigns are booked, flighted, analysed and optimised via demand-side software (DSP) interfaces and algorithms.”

Programmatic video is when the software is used to buy digital video advertising. And the benefit of programmatic video above that of traditional video advertising sales, is that it uses real-time data to get your video advert in front of the right customer at the right time.

According to Harvard Business Review (hbr.org) in an article last year entitled ‘Is programmatic advertising the future of marketing?’, the first banner ad appeared 21 years ago with an AT&T campaign on Wired magazine’s previous website HotWired.com to showcase our digital future. This was actually the dawn of a new era for advertising and marketing, says HBR. I would add for media owners too.

With personalised devices on us 24/7 and the ‘always-on’ consumer, it was a matter of time before advertising was personalised for each individual. That’s where big data and programmatic come in.

This is what HBR predicted last year: “Soon, every display will be an addressable medium – that is, each will be individually targetable by device and, in many cases, down to a specific user; and interactive displays will not only deliver ad messages but also track consumer response. The result is a new era of marketing accountability, in which advertising ‘budgets’ will have turned into marketing ‘investments’. This sea change in mindset will transform marketing forever.”

When stats like ‘59 per cent annual growth’ and ‘digital media ROIs have increased six times’ are bandied about by major brands in the United States over the past few years, programmatic advertising cannot be ignored.

Demand

According to the Rubicon Project (buyercloud.rubiconproject.com): “Programmatic video has grown partly because internet providers now offer affordable high-speed bandwidth that allows almost every internet user to stream high quality video. This means that more people are watching video online, with some even choosing to ‘cut the cord’ entirely and get all of their video and TV online. To keep up advertisers have been consistently switching their TV dollars to digital, which has been driving up the demand.”

This is great news for production companies, editors and videographers, as their skills will be more in demand, although overall costs for video advertising will fall, because brands can’t afford to spend R3 million on a video/TV ad every time. There will be more call for flexibility and turnaround times will be cut right down to ‘immediate’ as brands respond with video ads or messaging to key issues/ breaking news/ events, as they do with social media messaging these days. Much like TV news crews do.

The biggest advantage to purchasing video programmatically, is efficiency, because unlike traditional television advertising for example, programmatic offers brands the ability to reach their target audience based on their “real-time intent signals”. With programmatic video, if someone is searching for or buying an item online, then programmatic signals the relevant advertising, connecting the real live customer at that moment, with advertising on that item.

Moment targeting

At a Programmatic 2.0 conference in Cape Town in March, the power of programmatic advertising in 2016 was described as ‘moment targeting’ by Steven Kaufman, executive vice president, Integrated Media Audience X, Los Angeles. His company has taken programmatic into real-time with their moments-targeting software which goes beyond profiles, segments and demographics and silo channel planning, to ‘supercharge’ the performance of all marketing platforms and customer relationship management (CRM).

“Think about the digital lives we all lead – the ‘exhaust’ we leave behind is becoming big data… five billion smartphones in the market by 2017; 500 million on social networks; 2.5 quadrillion (one thousand trillion) bytes of data… Now we can take that data and with real time bidding technology, every impression as it comes in has a certain value.”

Kaufman’s company targets specific moments in a day in an online consumer’s life, whether at work, home, the gym or out shopping – however they are interacting in real time during different moments in their day. “Big data doesn’t just inform media decisions, it should also be applied to creative conceptualising and development, including ongoing re-energising of the creative.

Stijn Smolders, the CEO of Sprout Performance Partners, based in Cape Town, believes that the game changer trend for 2016 is programmatic video because the quality and high-impact awareness of video advertising will accelerate the uptake of the programmatic advertising channel.

He believes a growing understanding and awareness of programmatic will increase the quality of advertising inventory and application.

His advice: “Start investing (both financial and time) in programmatic (display) media. There is a reason why programmatic is overtaking paid search in the US from this coming year onwards. Spending your marketing media budget in a fully transparent way where you are engaging with your online customer way before they start searching (pull versus push) for your service or product online, is the only solution to outperform competitors with unlimited budgets.

“The value of the data that you are gathering at the same time is priceless and will give you a huge competitive advantage against your competitors. Conversion data will always outperform and be of significantly more value than click data,” Smolders reiterates in his 2016 trend predictions.

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