Programmatic video advertising is a systematic way of running digital ads using algorithms to get the material distributed across target audiences. It is data-based and cost-efficient because it eliminates the guesswork commonly associated with traditional advertising, ultimately giving marketers more value for their advertising budget.
Since programmatic video advertising relies heavily on consumer data, marketers must ensure that they have up-to-date and relevant information about the behavior of their target audience. This refers to purchase behavior related to their specific product and their media consumption habits, such as preferred content, narrative style, and chosen viewing platforms.
Digital Marketing has been steadily gaining ground as marketers realize the higher value brands can get from online ads than traditional media channels. Allocation of resources is leaning more towards digital, already accounting for almost 65% of all ad spend in 2021. This is higher by 4% compared to the previous year and nearly 6% versus 2019.
One major factor that drives this growth is the e-commerce boom that occurred in the past 24 months as consumers avoided spending time outside their homes due to the pandemic. Another reason is that digital advertising has a lower entry cost than traditional advertising, allowing smaller businesses and retailers to run ad campaigns within their means.
Aside from placements in e-commerce home pages and search results, digital ads also appear on platforms where the audience spends most of their time these days, such as social media. Marketing agencies predict that social media spending will soon outpace TV advertising in 2022.
This is a huge opportunity for marketers to battle with competitors for audience attention and recall. However, this can also be time-consuming since there are more channels, platforms, and content to consider in digital advertising than traditional media.
Fortunately, there are new applications that can aid marketers when it comes to digital advertising, and that is through programmatic advertising. Programmatic advertising is a more efficient way of booking and managing ads using automated processes. Algorithms are set based on relevant data, and the ad then targets specific user behavior that matches the advertiser’s consumer profile.
More and more marketers have used programmatic advertising for their digital ad campaigns as it now accounts for 85% of total digital ad spend in the US, more than 80% in Europe, and almost 70% worldwide. To take advantage of this opportunity, marketers must be clear about the new patterns in consumer behavior, product consumption, and how they process and absorb information.
Changes In Audience Behavior
Media consumption has rapidly evolved in recent years, which has paved the way for new media and entertainment platforms. New media channels such as Telegram and Youtube premium gave audiences more power and control over what they see and hear since they can now get information on demand.
In the first six months since the pandemic started, video streaming increased by 75% and captured a wider demographic than the expected younger segment only. In fact, viewers aged 55 and up comprise 25% of the total video streaming audience.
More recently, more channels like Tiktok, Instagram reels, and Youtube shorts have risen in popularity. These new platforms push forward shorter videos that creators can churn out faster, presenting audiences with much more variety and quantity in terms of content. They also have a high conversion rate as many consumers claimed to have purchased products that they have seen in these channels. Tiktok, for example, has an almost 50% conversion rate and more than 100% organic reach for brands.
With these changes, brands face a new challenge when competing for consumer attention. On top of finding ways to cut through the noise in these new media channels, they also have to produce more content faster while meeting higher video quality and entertainment value standards.
Video As a Digital Advertising Material
As more audiences migrate to online media consumption, advertising in traditional media would not achieve the same effect as it used to. Thus, brands and advertisers need to shift their strategy to match the new expectation of consumers and be present in these new media channels.
Aside from a shift in the placement of ads, the choice of ad material also plays a crucial role in increasing the reach and engagement for each ad. Video ads get better results most of the time because of their ability to capture the audience’s attention quickly. Brands also have more leeway to explain their message in videos than inert materials like posters or banners.
But this does not mean that content is not as important because it is, perhaps even more so than before. The first two seconds of the video are especially crucial as audiences would skip or scroll over an ad that fails to keep them engaged. The main message and brand identity should also be presented at the start of the video to help improve brand recall even if the viewer does not finish watching the full video.
Research agencies report that audiences are willing to watch longer video ads on social media platforms as long as they find the content engaging and relevant. This means that the message and video setting should be relatable and reflect their current reality. In addition, the quality of the visuals is another factor that can drive the viewer to watch the video ad until the end.
What Are Programmatic Ads?
In traditional advertising, a client has to go through several steps like briefing, reviewing proposals, negotiations, and other processes before an ad can even start running. Traditional advertising is very tedious and time-consuming, which can cause the brand to lose opportunities because in this digital age, timing is everything.
In contrast, programmatic advertising provides a more systematic and efficient approach when making ad placements. It is similar to a marketplace where a buyer can directly purchase and secure ad space from a seller through a data management platform (DMP). The buyers, the advertisers, or digital marketing agencies, use the demand side platform (DSP) to bid for impressions. At the same time, publishers use the supply side platform (SSP) for auctioning off available ad spaces.
Ad placement becomes more convenient, efficient, and cost-effective with this system because the software runs and manages ads. The software then uses algorithms based on web traffic and audience behavior, making the ad targeting work harder to generate impressions and create a better return on investment.
Because programmatic advertising follows a system based on real data, less guesswork is involved. Marketers can get more accurate results on their ad performance. Detailed key performance indicators are clearly defined, metrics are accurately measured, and areas of improvement are quickly identified. This takes out the trial-and-error common in traditional advertising, thus resulting in better value for digital marketers.
Advertisers also have more control as they can balance the amount they are willing to spend and their campaign objectives. Therefore programmatic ads have been disrupting the digital marketing space. In 2021, total spend for programmatic advertising has reached more than $150 billion, mainly coming from the US and closely followed by the UK and China.
How To Run Programmatic Video Ads
Running programmatic ads are quite easy, but ensuring that they are successful is another matter. Because programmatic ads are automated and data-based, setting the right algorithm is key to high performance. Therefore, before starting a new campaign, marketers must first prepare the necessary information to serve as the programmatic ads’ foundation. Here are the most important contributors to having successful programmatic ads:
1. Identify Audience Behavior
Before running an ad campaign, there must be current and relevant data on the target audience’s behavior. Even if it worked successfully before, outdated information could cause failure in the ad campaign, especially if there was a drastic shift in behavior.
Marketers and advertisers should conduct new market research such as surveys and focus group discussions or purchase recently published reports from reputable marketing research agencies. Their digital marketing agency can also share industry benchmarks to serve as references when setting the algorithm for the programmatic ads.
2. Set Clear Goals
Having the advertising goals outlined clearly from the beginning would allow the digital marketing agency to offer the best and most cost-effective solutions. Determine what type of awareness you want to achieve and what reaction you want to trigger in the viewers. Set a separate list for short-term and long-term goals, so the agency would know what to prioritize when setting up the programmatic ads.
3. Stay Updated
Even though it is automated, a programmatic advertising campaign still needs to be monitored so that marketers get the best value from their ad budget. Whether the platform chosen is fully or partially automated, human intervention is still needed occasionally to ensure that the performance is on target. This way, adjustments could be quickly applied if results fall way below expectations, and further waste of money can be avoided.
4. Plan for A Strategic Content
Aside from creating a video material that connects with the target audience, several other adjustments can be made to improve the ad performance. One example is placing the brand logo in the first five seconds of the video to increase recall. This way, even if the viewer decides to skip the ad, the brand name has already made an impression.
Marketers must also prepare for the possibility that the viewers will see the ad while using a mobile device or not turn on the audio while watching. These things are common in the US as more than 80% of viewers watch videos without sound. Your content must be structured in a way that makes the message understandable when viewed across different devices, with or without audio.
Lastly, a clear call to action must be included so that the audience knows what to do if they are interested in the brand. If links are added to the video, these must be relevant and aligned with the video content.
5. Ensure Brand Integrity
There have been instances when the set algorithms of programmatic ads have led to placements in websites that can damage the brand’s integrity, such as those that promote fake news, libelous claims, or conspiracy theories. Damage to a brand’s integrity can be prevented by setting up a demand-side blacklist to block out inappropriate sites. A whitelist can also be created to specify only the sites where the ad is supposed to appear, although this will significantly restrict the ad reach and may increase the cost per view.
Consumer privacy is also an issue when it comes to some programmatic ads. Consumer privacy can potentially lead to serious issues in brand integrity and cause brands to lose the trust of their consumers. Marketers must then work closely with their digital marketing agency to ensure that the ads they run do not violate privacy regulations.
Types Of Programmatic Video Ads and Available Metrics
Several options are available to marketers who want to run programmatic video ads. One is an In-stream video ad, which appears within the video being watched and is placed either at the start, the middle, or end of the material. Ads that appear at the beginning, called the pre-rolls, are the most expensive since they have the highest viewing probability.
Another type of video ad is the Outstream, which is not linked to other video materials. Instead, it is placed on web pages, giving advertisers more reach since the ad is not restricted to video content alone. Outstream ads can be placed on website banners, inside gaming platforms, or inserted between paragraphs.
The performance of programmatic video ads can be measured in different ways, mainly depending on the campaign goals. View count measures the number of people that have seen the ad. While it does not mean that the video was viewed in full, this is a good measure of the ad reach and is a good metric to use if the campaign objective is brand awareness.
User engagement accounts for the level of interest that the video could generate in the target audience. User engagement measures the length of time the viewer watches the video, which indicates their affinity with the brand or video ad content. Viewers that showed high engagement can be re-targeted in future ads since they are the ones who are most likely to be attracted to the brand.
If a link was included in the video ad, the number of viewers who checked it out could be gauged through the click-through rate. Getting high click-through rates means that the video ad was persuasive and the call to action was attractive to the viewer. If they take it a step further and proceed with the action needed, such as a purchase, subscription, or filling out a form, this is shown through the conversion rate.
Some video ads are not set to autoplay and need viewers to click play to watch the material. This is measured by the play rate, which indicates the viewer’s interest in the content and the effectiveness of the ad title or the thumbnail used.
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