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.