Post by Dvir Doron, CMO, Cedato
It didn’t happen as quickly as it did in display advertising, but last year saw a tipping point when the majority of US digital video ad spend was transacted through programmatic technologies, according to eMarketer. It is no wonder these systems are forecast to account for 74% of video spending by 2018 – advertisers now have an insatiable appetite for video inventory, and they are pushing publishers to offer space using the same data-driven trading technologies they currently enjoy in display.
But that demand is placing pressure on many publishers. The media-buying power balance has shifted to the buyer, and sellers are being sorely challenged to keep up.
In short, one class of publisher is struggling to outfit itself to take advantage of programmatic benefits – but all is not lost.
While The Washington Post addressed its frustrations with slow loading times by replacing a series of outsourced ad servers, ad builders and video vendors with a custom solution built in-house, small- and medium-sized publishers lack the budgetary clout and in-house teams of experts to opt for a similarly quick response.
With no other option than to remain wedded to the best outsourced options, they often end up relying on multiple partners with which to assemble a tech stack, and continue to suffer issues with trust, inertia in embracing new ad formats, the risk of losing direct buyer relationships and duplicate “tech tax” fees.
Having spoken with many publishers over the last few years, it is clear that their burning need is for platforms that help them regain control and increase revenue streams without hiring a large engineering team or leaning on taxing tech-partners.
What does that look like in practice? We recommend publishers insist on the following criteria when selecting their programmatic video technology:
1. SaaS or bust
With commissions starting at 15% and reaching as high as 60%, ad-tech fees are punishing buyers and sellers, but are often obscured in total media spend. Publishers should take on software that comes with clear costs, not vague generalized proportions of their buyers’ money. Software-as-a-Service (SaaS) is the technology business model, now coming to ad-tech, that will make is possible.
2. Support for new formats
For many publishers, making enough video content to sell in-stream ads in is prohibitively expensive. But new formats like outstream let publishers place video ads in text pages, without the need to serve them within their own original video content. With outstream also considered less disruptive by viewers, it is clear publishing executives need platforms that respond to the full new spectrum of ad formats.
3. Modern player tech
Video players have come a long way since the days of RealPlayer. But a modern video player shouldn’t just serve up a video ad and be done; it must work seamlessly with the rest of the tech stack, care about browser and operating system compatibility and include built-in yield optimization and viewability checks.
4. Hybridized header
So-called “header bidding” is the latest technology helping publishers entertain bids from multiple demand sources simultaneously, guaranteeing maximum yield from display. But header bidding for video is a tougher challenge. Unlike display header bidding, which runs on a consumer’s device, publishers should seek out vendors that support a hybrid approach, in which much of the bid source shortlisting is done on the server side, with only a final menu of offers being served through the header.
Publishers should seek a hybrid approach because video’s demand for optimization on a wider scope of parameters makes life more complex, while video formats are heavier on a page. So hybridization can make things run a lot smoother.
5. Private Marketplace
To truly benefit from the ability to transact effectively with quality buyers, publishers today need a new breed of Private Video Marketplace (PMP). This new model enables publishers, within the controlled confines of the PMP to better control their inventory, measure their revenue from their inventory and apply predictive modelling and forecasts while fostering more trustworthy relationships.
Now, more than ever many publishers need a leg up to rapidly kick-start video monetization without the overwhelming need to integrate multiple tech partners or worse.
The technology void is not unsolvable. Now publishers have a choice. But their first choice is whether to recognize it. For those that do, the march towards the future starts now. Check out our comprehensive guide to programmatic video for publishers to get started.