How premium video is entering a new programmatic era
The demand for premium video inventory shouldn’t let up and as the convergence of TV and digital continues, programmatic trading is poised to become widely available across the TV landscape.
Video has become a key driver of ad spend in the UK, growing an impressive +12.6% for marketing spent in this category in 2021, compared to +4.2% in 2020 according to the IPA Bellwether Report Q3 2021.
At a larger European level, the 2021 Attitudes to Programmatic study from IAB Europe shows that it’s also a big driver of media agencies’ programmatic investment, with more than three-fifths (61%) buying over 41% of their video inventory programmatically.
On the other hand, according to the same IAB Europe report, when looking at the sell-side, only a small part of publishers’ video inventory (33%) is currently traded programmatically, and this percentage is even smaller when it comes to broadcasters’ premium video inventory.
Beyond the complexity of video programmatic trading, we think that programmers have shied away from opening supply to a bidding marketplace due to a number of concerns – but the potential for growth in this type of demand is compelling, particularly with the booming audience consumption of connected TV, over-the-top, and streamed content.
To support the growth of programmatic premium video, we believe, there are a number of steps, the industry still needs to address.
Audiences are taking TV outside the box
In recent years, we note that audience preferences have drastically shifted, altering the direction of the TV landscape.
A study from FreeWheel and Happydemics conducted in 2021 in four European key markets revealed that seven in 10 of the consumers surveyed now have internet-enabled TV sets, highlighting the rising interconnectivity of premium video viewing across Europe.
For the UK specifically, this number rises to eight in 10 consumers.
Across the TV industry, buyers and sellers are facing disruption caused by the diversification of viewing behaviours.
Digital and linear tend to converge into Advanced TV, which, in turn, means more and more screens are surfacing.
As a result, we note that advertisers and agencies are adjusting their budgets to ensure they reach these fragmented but highly engaged audiences.
With Advanced TV’s promise of cookieless targeting methods, in-flight campaign optimisation capabilities, and greater efficiency, cost-effectiveness, and control, marketers seem to be increasingly eager to leverage this medium.
According to a 2021 study by FreeWheel and CoLab Media Consulting in 5 European key markets, 60% of marketers surveyed in the UK intend to increase their Advanced TV budgets in the next 12 months.
It seems that attracting further spend should require sellers to make some important changes. With the infrastructure to support this new landscape, what’s holding broadcasters back from harnessing programmatic trading for premium video inventory?
Premium publishers’ programmatic concerns
To build a successful marketplace, two key priorities need to be met. The first is to create a sustainable trading environment that minimises friction for both sides. Doing this requires significant automation and a simplified integration into varying workflows. The second is to tacitly establish market tension between the buy and sell sides, demonstrating value for both.
Looking more closely into this second point, market tension might currently be unbalanced for several reasons.
From a cost perspective, the value of programmatic is not as obvious. Implementing and maintaining programmatic transactions requires greater investment, which means they aren’t necessarily as efficient as direct sales.
Alongside cost, premium video providers have set very high standards for data security. Their high quality first-party data needs to be rigorously managed by the most stringent and trusted processes.
Potential technical and process complications, along with quality issues, data security and fraud threats that could result in a negative user experience have created a reluctance to open-up inventory to unknown buyers.
Premium environments depend on preserving an optimal user experience and data security standards, so what’s being done to drive programmatic progress?
Fuelling the future of premium video
Until recently, the typical programmatic deal structure wasn’t viable for premium ecosystems due to the lack of open RTB protocol standards and broadcasters’ desire to retain control of their inventory.
Adoption has therefore been cautious and highly methodical. TV businesses are now deeply committed to improving operations for the Advanced TV landscape.
Leveraging programmatic trading for premium video is now rising as transaction methods, for example programmatic guaranteed, improve trust between marketers and publishers.
Additionally, Deal IDs (or private marketplaces) are furthering this evolution by matching buyers and sellers on an individual basis, according to previously negotiated criteria.
This could include minimum costs for ad inventory, ad unit types, and placements within video content. With these transaction methods, publishers gain greater control over who can purchase their premium video inventory and marketers gain flexibility in their ad buying, improving cost-effectiveness.
Education around this is hugely important since to date, there has been a lot of confusion around the differences between programmatic trading for display and premium video (instream).
Many requirements for display, such as header bidding and first-price auction, are either less common or non-existent in premium video ecosystems.
Most programmatic transactions for premium video are being conducted in curated, guaranteed, or private marketplaces, which answers the needs of both buyers and sellers.
We believe that the demand for premium video inventory shouldn’t let up as audience eyeballs stay glued to quality, TV-like content across a growing number of screens.
As the convergence of TV and digital continues, programmatic trading is poised to become widely available across the TV landscape.
The transformation is already taking place, the recent announcement from Channel 4 in the UK is a good example of that, and premium video providers seem to be ideally placed to offer well-balanced sales channels (direct sold and programmatic) that are secured, brand safe and cost effective.
As a result, this is a time of great potential for programmatic (C)TV; not least for the consumer who will be served the right ad, in the right context, at the right time.
Emmanuel Josserand is senior director of agency, brand and industry relations at FreeWheel