How Does Programmatic Advertising Work with Video?

What is Programmatic Advertising?

In a nutshell, programmatic is how digital media buying is done today.

Programmatic advertising refers to the use of software to purchase digital advertising, instead of purchasing ads through human negotiation . The purpose of this is to increase efficiency. Before programmatic advertising, digital ads had to be bought via salespeople, which could be expensive and unreliable .

Programmatic is buying and selling digital advertising space automatically . Computers use data to decide which ads to buy and how much to pay for them.

Programmatic Advertising and RTP

One type of programmatic advertising is real-time bidding, or RTP. RTP is the lightning-quick buying and selling of online ad impressions through real-time auctions. This occurs in the time it takes for a webpage to load. Without RTP, everyone, everywhere, on a given website, would see the exact same ad regardless of demographics. RTP is a tool advertisers use to better target their ads.

Basically, as an ad loads in a user’s web page, information about that page and the viewer is passed to an ad exchange. The ad exchange then auctions the ad space off to the advertiser willing to pay the highest price. The whole process takes milliseconds. This is why you may use Amazon to search for some new winter boots, and a minute later when you visit Facebook, you see an advertisement for boots.

Programmatic Video Advertising

Programmatic video advertising is essentially the above, but with a video ad. A programmatic platform can connect video inventory to audiences across any screen. This could include smart TVs, in-app environments such as phones or tablets, or video platforms like Hulu or Amazon Video. It can connect advertisers with consumers by inserting video ads into existing video content. It can also place video ads into text-based content, such as newspaper sites.

Benefits

Programmatic video advertising is all about efficiency:

• You can buy across thousands of sites at a time, focusing only on your target audience. You can be as specific as you want: for example, people who work in the railway industry that like Chinese food.

• It is not limited to existing customers, but extends to new customers as well.

• The streamlined ad trafficking and buying process saves time and money.

• You no longer need a separate platform for different channels or to reach numerous websites.

• It allows advertisers to be nimble with advertising strategies. Every interaction with your ads are tracked, and the information is available instantly. This allows advertisers to make adjustments to their campaign instantly and in real-time.

• Another good thing is, programmatic advertising is CPM based, so you are paying for the actual impression, not per click on the website.

• It’s also an open system, so any company that wants to make advancements to it are able to.

Common Challenges with Programmatic Advertising

Now that we’ve established a working definition and the benefits of programmatic advertising, we can begin to identify and discuss some challenges associated with it.

Brand Safety

Brand safety is a constant worry for modern businesses.

A typical advertising chain can look something like this: Advertiser –> Agency –> Demand-Side Platform –> Sell-Side Platform –> Channel Partners –> Publisher –> Ad Network. Keep in mind this is a very general list. Programmatic advertising is quickly and constantly evolving, so these steps may change. But you don’t need to understand each of these terms to see that there are numerous steps your ad will travel through before it reaches consumer eyes. With each step, there is a chance that your ad loses transparency, which means loss of control over your brand.

Ad Fraud

Ad fraud is set to cost the industry £16.4 billion this year alone. Ad fraud is a scam in which the perpetuator tricks an advertiser to buying something that, in fact, has no value. These scams can include the following:

Click fraud, which is the generation of fake traffic to a website through automated clicking programs. Though this results in high ‘click rates’, there is in fact no potential for a sale.

Search ad fraud is where a website is created using keyword stuffing to improve their position on a search engine’s results page. The perpetuator then sells ads on the fake website, where they actually have little chance of being seen.

Ad stacking occurs when the publisher sells multiple ads for the same spot. The ads are then all placed in the spot, but only the top one is visible.

Domain spoofing, which occurs when the perpetuator misrepresents the domain where an ad is being placed. For example, the publisher of a website containing pirated films might pretend to be associated with the site of a legitimate movie studio.

There is also pixel stuffing, where an ad is placed within the pixels on a web-page, but because they are invisible, no one is actually seeing them.

This study reveals that it is possible to reverse-engineer bots to bypass ad-verification technology. Because of this, there is always a chance that using programmatic advertising can result in ad fraud.

Viewability

Viewability measures whether or not an ad has a chance to be seen by a viewer. Viewability rates differ widely across the spectrum, depending on the viewing method. Desktop viewability is nearly 41% higher than mobile, and nearly 106% higher than tablet viewability. This is due to several reasons. The prominent of which is delayed loading time, more page scrolling, and poor formatting of ads designed for desktop. Viewability rates can be a useful tool to determining the effectiveness of an ad, but as discussed above in our ‘ad-fraud’ section, it can’t always be trusted.

In a nutshell, programmatic video advertising can be a useful and effective method for spreading the word about your brand and the goods or services you offer. There are numerous benefits with this method, including efficiency, flexibility, and a buying process that saves on time and money. There are also challenges to watch out for, including brand safety, ad fraud, and viewability. Although, something to keep in mind is that these challenges are not limited to advertising via programmatic alone.