Programmatic has taken over the world of advertising. Efficient and cost-effective with great targeting capabilities, programmatic has revolutionised how we buy and sell digital advertising – and improved it for all involved.
Programmatic display has long led the way, but another player is increasingly, and understandably, gaining advertiser’s attention – programmatic video. Advertisers go where the viewers go, and in today’s world, this is video. In fact, by 2020 online video is expected to account for 82% of all consumer internet traffic.
As a result, spend on programmatic video is growing at great rates. In 2014, $0.63bn was spent on programmatic video advertising in the US. Jump forward a mere two years and this spending increased by 106.3% to $6.18bn, and rising. But apart from its overall growth, what specific channels of programmatic video advertising do we expect to boom this year?
Consumers today are not only embracing online video. They are also continuing to increase mobile device usage. The result? A combination of the two in the form of mobile video advertising.
According to PwC’s annual Global Entertainment and Media Outlook report, mobile video ad revenue will rise from $3.54 billion in 2015 to $13.3 billion in 2020 – a 30% compound annual growth rate (CAGR). This will make mobile video ads the fastest-growing digital ad segment within the five years from 2015 to 2020, and we fully expect 2017 to be the year that kick starts this trend.
As it continues to grow, video advertising is also expanding in the formats it offers – and in 2017, we expect native advertising to be one of these formats that soars. Why? Because it tackles two major issues in today’s online world.
Firstly, the rise of ad blockers has caused problems for some advertisers, but the format of native ads means that they aren’t affected. Secondly, consumer user experience standards have developed so that advertising that may have been acceptable ten years ago, is now intolerable to the end user. However, native advertising is designed to match the form and function of the content it’s placed on and is therefore typically more user-centric than other forms of advertising. Combine these two benefits and we believe that 2017 may be an important year for native video advertising.
Every brand should be looking for new and exciting ways to engage its audience, and this year, we expect interactive video ads to be just this. By involving the viewer in the video and allowing them to make decisions and actions, interactive video pulls the viewer in and heightens engagement.
Understanding this, big brands such as Facebook, Skittles and Gatorade have all been adopting interactive advertising. However, the complicated and often costly technology involved has prevented smaller brands from getting in on the action – until now. With recent tech advancements, brands of almost any size are now able to create interactive videos that can help them to generate leads, drive brand awareness and boost engagement.
The effectiveness of programmatic advertising lies in its targeting capabilities. With a DMP rich with behavioural and user data, ads can be personalised to an individual level, ensuring relevance and subsequent engagement. This data can include, amongst much more; age, hobbies, profession – and location.
Data related to location has created a channel known as location-based mobile advertising. This provides marketers with the opportunity to deliver ads to their audiences via mobile at their current location, in real-time.
In 2016 alone, this type of advertising in the form of video ads soared from around 5% in Q2 to 17% by Q4 – and this will only increase throughout the year as consumers become more accepting of data-driven advertising and the importance of targeting continues to advance.
Digital video has spread throughout the internet, becoming one of our major information sources. Because of this, there is no doubt that programmatic video advertising will grow from strength to strength in the coming year – but to what extent it will develop across different channels is yet to be seen.
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