RTB Video Ad Technology: Opportunities and Challenges

The demand for real-time bidding (RTB) video ad technology is growing rapidly alongside the demand for video content and video ad formats.

This industry’s growth will form a central part of the ongoing evolution of video advertising. As with any other evolving technology, in the coming years it will present a number of opportunities for advertisers, but its own challenges as well.

The Growth of RTB Video Ad Technology

The RTB video ad sector continues to grow steadily as a percentage of the overall video market.

There are a number of trends that showcase this growth:

Consumer demand for video continues to increase steadily. Not only has mobile rapidly become a standard viewing platform for most people, consuming media through two devices simultaneously has become commonplace.

Online video attracts both marketing dollars and advertising dollars. The immense popularity of sites like YouTube and Netflix, which accounts for 35% of US internet traffic, have contributed to the ongoing annual growth of the RTB video ad space. By 2018, Business Insider expects RTB video sales to reach nearly $4 billion.

TV buyers are extending their efforts into online video formats. Given the opportunities that digital video advertising presents, such as audience targeting and tracking, traditional TV buyers are exploring digital video formats.

RTB is growing faster than the overall video market. As a buying mechanism, RTB video is exploding as a means of acquiring video inventory.

There are several factors driving the growth of RTB video advertising:

Advertisers need an automated mechanism for buying and selling. Video inventory has become a significant portion of many marketers’ media mix. In general, there are two types of inventories: bid-based public platforms and private and direct inventories.

Video buyers are looking for real-time prices. Buying methods are adjusting themselves not only to the complexities of the ecosystem, but also to the needs of the buyers themselves – many of whom are used to traditional TV buying methods.

New metrics and analytics necessitate new buying mechanisms. Standard metrics in traditional TV and video viewing, such as reach and gross rating points, form but a small part of the digital analytics. RTB and programmatic mechanisms are required for marketers who wish to develop campaigns that include more complex digital metrics.

The Evolution and Challenges of RTB Video

Over the past several years, RTB has evolved from a bidding platform into a complex programmatic tool based on multiple attributes.

At one point, RTB was a simple pricing model, but today it has developed into a buying mechanism that allows buyers to buy based on real-time or auction-based prices.

Despite the clear advantages of this automated technology, publishers’ adoption rate has been slower than anticipated, for several reasons:

Overall video growth has been driven by brand-lift goals, as opposed to direct marketing metrics, such as cost-per-action. In the past, the lack of premium video content has restricted many marketers from utilizing online video as an advertising platform. In 2015 and beyond, however, these trends are changing as consolidated video platforms emerge.

Video has been a seller’s market. Premium publishers have had little incentive to participate in video RTB, believing they have needed to manage their own inventories to maintain their high CPMs. This too is changing as RTB becomes defined more and more by the programmatic buying process rather than the pricing model.

Loss of control and lack of transparency are still big worries. Advertisers worry that by engaging in RTB, they will lose control over where their ads appear. Lack of transparency or confusion over the complexities of the RTB mechanism itself also slow adoption.

Opportunities and Projections

Despite the barriers to RTB video advertising, the demand for programmatic ads continues to far outstrip supply. The advantages of the RTB process are too great for advertisers and publishers to ignore, which has contributed to the development of consolidated RTB video ad technology, such as BroadcastFuel.

BroadcastFuel, CodeFuel’s all-in-one Real Time Results video ad Solution, has been designed to meet the needs of advertisers and publishers. This platform provides all the monetization and marketing features needed in today’s complex advertising ecosystem, including:

  • Yield management across demand sources
  • The ability to control and optimize every ad decision
  • Maximize revenue potential through holistic campaign management
  • Industry-leading yields driven by high-scale data capabilities and cutting edge technology
  • Premium, exclusive video content across all devices and screens

These features, which should be present in every leading RTB video ad platform, allow advertisers and publishers to maximize their exposure and their revenue in today’s competitive ecosystem. BroadcastFuel’s real-time analytics ensure that clients can make informed, insightful decisions that increase revenue and reduce waste.

In the coming months and years, video advertising will become a standard part of every advertiser’s toolbox. And, as Real Time Results and programmatic advertising become industry standards, multi-screen Real Time Results video ad technology such as BroadcastFuel will become a necessity for advertisers and publishers across the spectrum.

How You Can Make More Money by Studying the History of Display Ads

Knowing the past, present, and future of display ads can be vitally important for anyone trying to monetize a website or app. After all, history can teach us lessons about what works, what doesn’t, and how we can evolve our advertising practices to earn more revenue.

Lessons We Can Learn from the Early Display Ads

In the early days, display ads were experimental ads run by Prodigy, an online advertising firm jointly owned by IBM and Sears. AOL followed suit, and soon many other companies followed suit. Corporations realized the immense potential with online advertising, and a new marketplace was quickly established.

However, early ads taught us a few valuable lessons about what to do and what not to do with display ads.

  • New is only new for so long – Some of the early banner ads run by AOL and other companies produced click-through rates in excess of 40% or more. However, these click-through rates began dropping within a few short years, as did the advertising revenue for companies and ad companies alike. These days, banner ads that look anything like those older ads earn a fraction of a percent in terms of click-through rates. It is likely we will see a similar pattern repeat itself each time new technology and mediums spawn new forms of advertising.
  • Forcing ads on users makes them mad – Pop-ups and pop-unders soon arose as a result of banner ads’ poor performance. As with banner ads, they were successful, but only for a short time. They quickly drove visitors away, and pop-up blockers appeared. This killed the pop-up industry revenue and they died out more quickly than the banner ads had.
  • Algorithmic optimization is the past, present, and future of display advertising – Almost 96% of Google’s revenue comes from advertising, so advertising is certainly not dead, and it never will be. Part of the reason for the giant’s success is due to the fact that it provides a valuable search service. The other part is due to its effective auto-optimization algorithms: Google’s Quality Score measures the effectiveness of an ad, its landing page, and so forth. By creating an automated advertising exchange and optimization platform, the network helped codify what has become standard practice for the advertising industry.

The Current State of Display Ads

Today, display ads are finding their path. After a short-lived popularity spike for other forms of advertising, such as sponsored search results, we are seeing another rise in the popularity of display ads. Some projections suggest that display advertising spend will hit $19 billion by 2019.

After the downfall, why the sudden reversal? Perhaps it is because many advertisers have learned the above lessons from the early days of banner ads, pop-ups, and other ineffective techniques.

Google, for instance, is investing and earning from its own display advertising network, as are countless other ad networks. And, although algorithms and automation will always play a critical role in the world of online advertising, successful campaigns will be those that rely on the perfect balance of humans and automation.

Specialized, exclusive display ads, such as those offered by CodeFuel’s DisplayFuel, offer selective advertising to niche audiences – in this case, the software industry. For software-specific advertisers, developers, and publishers, this type of solution is ideal.

And as we progress into the future, we will see more and more niche industry networks popping up.

What the Future Holds for Display Ads

People’s eyes are inherently drawn to images, which take a split-second to process. Display advertising will rebound from the crude practices we saw in its early years, and become more and more effective as marketers continue to refine their approach.

Technology itself will also impact the way advertising operates. Here are a couple major changes we’ll see:

  • New technology will introduce new ad formats – Smartphones have increased the necessity for hard-hitting, simple ads. Smartwatches will only further this trend, while headsets and VR technology may have the opposite effect. Life-sized or even larger-than-life advertisements may become a new playground for the creative in the advertising industry.
  • New analytics will enhance display ad effectiveness – Google Glass and other visor technology can monitor pupil dilation and direction. This can tell Google and advertisers how long people look at an ad and how they react to it. Even if only a minority of people use such technology, the data can still be extrapolated and provide useful metrics for other campaigns.
  • More competition will drive up ad quality – As the virtual world expands, so will the virtual marketplace. Competition will increase, which means that in order to be more effective, quality ads will prevail. The most successful advertisers will be those that know how to make creative use of the latest technology.

Display advertising will only become more prevalent in the years to come. And, as with any new technology, we will see explosive growth of new ads and new fads. Those display trends that thrive, however, will be curated display ads, such as those offered by premium networks such as DisplayFuel, because they provide high-quality, relevant advertising via a premium delivery network.