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The Programmatic Future: Automation Poised to Dominate Video Ad Buying

Written on
Mar 10, 2014 
Author
Richard L. Tso  |

ADOTAS – Ad automation technologies have advanced pretty quickly over the last year, but beyond being a ubiquitous industry buzzword, what exactly is programmatic anyway and how does it work? Whether you like it or not, software algorithms have become an integral part of the buying and selling of media. Just how quickly is it growing? This year alone, eMarketer predicts advertisers in the United States will spend $3.36 billion in real-time bidding, up from just under $2 billion in 2012.

So what is it? Essentially it’s the automatic online buying and selling of media through an auction-like marketplace, where potential ad buyers can shell out cash for the price of a particular ad at a given moment in time. Similar to the stock market, it allows for the rapid selling of publisher website ad inventory and matches them with advertisers and agencies willing to pay for these ad spots.

In an interview with Adweek, former EVP at NBCUniversal Peter Naylor explained, “Programmatic is a catchall term that many people are using to categorize everything from behavioral and intent-based targeting to real-time bidding and exchange-based buying of inventory. Programmatic is advertising’s newer, better mousetrap.”

YuMe Enters Programmatic Fray

While programmatic solutions are currently fueling a majority of display ads online, it will soon also dominate video ad delivery. Companies like Rubicon Project, RocketFuel and RadiumOne already appear to offer programmatic video ads and today, video ad buys just got a lot simpler with YuMe’s launch today of Video Reach, a branding solution specifically targeted towards agency trading desks and brands.

According to Andrew Frank, VP Distinguished Analyst at Gartner, “The automation of premium media sales is inevitable and long overdue… Media companies have little choice but to embrace programmatic premium advertising; the seller’s market in media is gone, along with the scale and scarcity that once characterized mainstream media.”

In today’s multiscreen world, it’s imperative that brands and agencies develop cohesive, cross-device campaigns and YuMe claims Video Reach incorporates first-party audience targeting (which it touts as industry first) and SDK-integrated video inventory across online and digital devices at the same scale of traditional television ad spots.

“Because of scale, targeting and screen limitations, brand advertisers are having difficulty embracing programmatic for video,” said Ed Haslam, senior vice president of marketing at YuMe. “However, the launch of Video Reach allows agency trading desks and brand advertisers to fully embrace programmatic video advertising, across all four screens — PC, mobile, tablet and CTV — with efficiency, extended TV-scale reach and first-party data-powered audience targeting — all without the use of cookies.”

According to a company press release, YuMe takes full advantage of traditional programmatic distribution channels, supporting brand advertisers who seek increased efficiency and reach. The availability of so many devices in the marketplace like smartphones, tablets and laptops have made it challenging for advertisers to effectively reach consumers in a consistent manner across these different touch points.

In early 2013, YuMe acquired a company called Crowd Science, which gave them the ability to run first-party surveys across their network in order to collect voluntary demographic and psychographic data, including likes and dislikes (example would be age, gender, hobbies, interests) — gauging receptivity. From the same surveys, the company also collects information about what the audience recalls about the advertising (example: the color of a car in an ad) — gauging attentiveness.

This distinctive combination of captured information yields a powerful set of data that YuMe uses to build audience segments, delivering the most receptive and attentive audiences possible in digital video brand advertising, while allowing advertisers to move beyond the limitations of traditional cookie-based targeting.

“TV brand advertisers who are already extending their campaigns with digital video using our Connected Audience Network have been asking for a product that offers more cost-effective reach,” said YuMe CEO Jayant Kadambi (pictured). “Similar to the way they diversify their TV schedule with broadcast and cable across both prime time and other day parts to meet both reach and budget goals, we’re providing a method for them to do that with digital video. It’s without a doubt the early days for video programmatic, but Video Reach will serve as a beacon to large traditional brand advertisers, as they adapt to the fragmented and complex digital video advertising environment.”

When asked about what the future of advertising holds, Haslam added,” Some key drivers in advertising over the next few years (at least in the ad tech space) will be cross-screen measurement, accuracy in targeting (which includes audience guarantees), fragmentation, the massive shift of dollars from off-line to digital, and of course, programmatic.”

Yes, the algorithms are taking over.





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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