A guide to unlocking the value of programmatic video

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I’ve been reflecting on my first six months at Tremor Video, and realised that much of what I’ve heard from partners in the market fits into a few key themes. These themes are hugely illustrative of the challenges marketers face in an increasingly video-focused world, so I have pulled together the following guide to unlocking the value of programmatic video:

Be aware of the scale challenge

Many publishers, and buyers for that matter, still prefer to trade video via private marketplace deals, even though it limits scale and requires a seller to have an active relationship with a buyer to ensure the deal is successful. A lot of the buyers we speak to prefer to spend their budgets in an open auction, relying on their technology to buy the right audience at the right price, therefore avoiding any issues with scale and private deal set up. Many publishers also use a hybrid private marketplace and an open auction strategy.

Work with a team that gets video

Many sellers employ their existing display SSP to trade their video inventory, but it is clear that display SSPs are simply not built to accommodate video. Some sellers go down that route because they don’t have that much video to sell, but we’ve learnt that the vast majority of premium sellers are now focusing on video, with many saying that ‘video is at the heart of their content strategy’. The BBC’s plan to increase video five-fold in 5 years and the Telegraph’s focus on how best to distribute their existing video content to users across their site to increase scale, being examples of that trend. The demand for an SSP partner that specialises in video is now mission critical.

A global partner is key

Employing an SSP with global footprint is a great way of monetising what a direct sales team can’t sell locally.  Most of the big premium sellers in the UK have a (sometimes large) slice of their inventory available in the US, Canada and Australia. Some publishers are even seeing demand across the LATAM, SEA and MENA markets.

As video generates such high CPMs, even if a seller only has a couple of 100k video requests which aren’t being sold, it’s worth them working with a partner who can help them sell these options programmatically. SSPs represent the publisher and have tools in place to ensure that the seller’s inventory, wherever it’s coming from, is being sold at the right rate to the right demand partners.

Direct deals are still winning

Sellers often favour direct deals because they can get a fixed price, a guarantee on volume and they know how much budget they’re going to generate up front. With private deals, whether they are on an unreserved fixed rate or via an invite only auction, either the price isn’t fixed or the revenue isn’t guaranteed, which can be a little nerve wrecking for sellers.

Whilst premium video inventory remains fairly scarce, direct sales will continue to represent the lion’s share of publisher’s video ad business. Programmatic is certainly growing fast, but I don’t see direct deals going away any time soon. Some sellers who favour direct deals are progressively turning to automated guaranteed (we’ve seen this pervasively in Australia). It is certainly a trend we are watching closely and have been advising our UK sellers on.

Watch those deal-IDs

Unreserved fixed rate deals and invite only auction are set up via deal-ID. This requires a manual set up process from both the buyer and seller and any number of variables can lead to a days or weeks of troubleshooting. It is also true that when you set up a PMP of any kind, you have to manage it. A buyer could purposefully stop buying, it wasn’t working for them, its performance wasn’t good enough or they’ve spent their budget. Alternatively, they may not have realised they weren’t spending and they need to fix their system, or their PMP was set up incorrectly, for example the end date was reached and needs to be reset etc.

Watch your rate in the Open Auction

Sellers who use multiple SSP/networks/reseller partners to trade their video inventory and are not necessarily employing the right partners and controlling where their inventory is going. This often results in them being undercut by partners who are reselling their inventory on the open auction for less than the seller is aware and what the inventory is actually worth.

SSPs need to work with sellers to educate them about how to safely trade their inventory and the buyers also need to be aware of what they are actually buying. For instance, if a buyer sees video inventory at $10 in the OA for a national newspaper, common sense should prevail, as it’s probably not the ‘real deal’ at that price. Our objective is to get buyers and sellers to work more closely together, communicate more, so that every party involved wins.

As you can see there are lots of challenges in the video ad space at the moment, but there are huge opportunities too. Video is growing, so businesses need to be brave, but they also need the right partner to help them chart those waters to really unlock the value of programmatic for video.

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