After years of slowly building, programmatic ad buying for digital video is approaching a tipping point. Based on data for first half 2022, the U.S. Video Marketplace Report predicts that by 2026, programmatic ads will account for half of all digital video ad views in the States.
Two forces are at play: automated buying is becoming more accepted and, as more Americans stream digital video, marketers have wider opportunities to advertise in premium digital video. Thanks to reliable high-speed internet, affordable streaming services, and high-quality content, more Americans than ever are accessing video through over-the-top (OTT) services. OTT accounted for more ad views during the first half of 2022 than signed-in cable and satellite subscriptions, according to the report, which details the rapid rise of both digital video consumption and programmatic advertising.
“More viewers are finding ways to consume content outside of a cable subscription,” noted Terri Ryan, lead consultant for FreeWheel’s advisory team and a co-author of the report. She pointed to data showing that 59% of video views in 1H 2022 were via OTT, compared to 41% via cable or satellite service user authentication. What’s more, the number of households with four or more subscription streaming plans jumped 218% from 2019 to 2022, according to the report (per Nielsen “State of Play“).
Programmatic transactions have increased as well. It jumped 26% from 1H 2021 to 1H 2022. FreeWheel predicts that a larger share of Upfront deals will be transacted programmatically in the future.
“We’re moving into a world where advertisers want automation, and they want things to be quicker and have the process be less laborious,” Ryan said. “As the supply grows, then the demand grows. And programmatic can come into play to fill that extra inventory.”
In the past, advertisers have been concerned about fraudulent audiences, transparency, and access to detailed reporting, Ryan said. She added that as technology and data analytics have improved, marketers have more confidence in programmatic buys and are willing to participate.
For instance, FreeWheel partners with Human Security to monitor invalid traffic and reports that more than 99% of its traffic is valid. That kind of evidence can help sway cautious marketers.
At the same time, digital video consumption is booming, and marketers are taking note. Publishers are adding fresh content and launching new apps, giving viewers more options than ever. Among the most popular offerings are free ad-supported TV (FAST) channels.
Analyzing OTT ad views in the first half of 2022, the Video Marketplace Report determined that FAST channels accounted for 29% of views, while apps represented 13%, and subscription video on demand was 10%.
Because publishers are adding more high-quality content to their programmatic inventory — including long-form premium video, original series, and new FAST channels — there’s more to choose from, Ryan pointed out.
When it comes to digital video consumption, connected TVs are the most popular choice, with an impressive 82% of premium digital video consumed at home on “big screens,” according to 1H 2022 data. When viewers are at home, enjoying a lean-back experience, brands have opportunities to connect and engage.
Armed with granular viewing data from programmatic platforms, FreeWheel suggests that ad buyers create tailored programmatic buys across multiple distributors. The selections might include streaming services like Roku and Fire TV, as well as direct-to-consumer apps. By casting a wide net, a brand can amplify its reach and extend brand engagement, Ryan said. Once campaigns go live, marketers can analyze the results in real time and make adjustments that optimize campaigns.
“Programmatic connects brands to these quality audiences using a data-driven approach,” Ryan said. “We’re able to provide an advertiser with a much clearer picture of their campaign now.”
In another boost for programmatic, FreeWheel’s data noted that 85% of programmatic ad buys are now guaranteed. In other words, sellers agree to deliver a set number of impressions for the agreed-upon rates. That’s transforming programmatic into a forward-looking strategy, rather than a way for sellers to dispense with excess inventory.
“More advertisers are becoming savvier about using programmatic. They’re going in early, rather than using it as an afterthought,” Ryan concluded. “It sets you up for more success.”
This content has been modified from the original article published here on Mediavillage.com.