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Exploring the Spectrum of Automation in Programmatic Video

Programmatic Video:  A Spectrum of Automation 1

As Bob Dylan once famously observed “There is nothing so stable as change.” In the world of advertising, change has certainly been a constant, especially in the realm of programmatic, where evolution and complexity seem to go hand in hand, fueled by a marketplace continually seeking greater efficiencies. Despite the official IAB definition of programmatic as “the automated buying and selling of inventory,” confusion remains when programmatic is discussed, especially in relation to video in the advertising marketplace.

IAB’s Digital Video Board saw in this confusion an opportunity to shed light on the programmatic video space for both media buyers and sellers through the development of a whitepaper, representing a wide range of viewpoints and perspectives across the video ecosystem. Given the growth of programmatic video–which eMarketer estimates will make up more than half of all US-based digital video revenue in 2016–the stakes are high.  The goals of the paper are to foster an understanding of programmatic video, to help the buy side and sell side have more meaningful conversations, and, as a result, to better enable the market to collectively leverage the emerging technologies, scale, and efficiencies that programmatic video can bring to bear.

The document also serves as a counterpoint to the common perception of programmatic as a single entity. The reality, as the paper points out, is much more nuanced as programmatic video is actually made up of degrees of automation that are dependent upon the specific monetization architecture that is being used. Each platform, from desktop and mobile to OTT (Over the Top) and linear TV, is discussed with regard to its particular automation capabilities throughout the buy/sell process.

To spearhead the paper’s development, IAB formed the Programmatic Video Working Group, an assembly of experts from 40+ member companies representing programmatic video on desktop, mobile, OTT, and linear TV. As the group began discussions and sat down to write the paper, a few common themes were identified: 1) While data fuels programmatic video advertising, it is not the defining feature, as data at varying levels of granularity has been used in video advertising since inception; 2) The very definition of programmatic opens itself up to wide interpretation and “the automated buying and selling of inventory” is a process and a series of steps through the supply chain, not a single action; and 3) Automation is the key component of programmatic video advertising.

Perhaps the biggest takeaway, though, was that programmatic video solutions can differ widely depending on business context and media channel.

A programmatic video solution for linear TV may not have the same features as a programmatic solution for mobile or desktop video and a programmatic solution on OTT may differ from the rest of the video platforms entirely.

To help map the programmatic video landscape, the paper offers a variety of use cases and scenarios, illustrating by platform where automation is readily available, where it’s beginning to find traction, where it’s not, and why (see diagram).

For instance, some publishers are wary of adopting network or exchange-based programmatic selling for some inventory types–such as OTT and linear TV—and may therefore prefer direct-sold and upfront models to better control pricing, manage ad yield and satisfy specific buyer demands. Indeed, the majority of linear TV transactions are performed today via traditional direct-sold models. Apart from some of these select, limited availability video formats, the motivations for transacting programmatically across other channels are fairly consistent, including:

  • Programmatic’s power to leverage rich and diverse data sources
  • The efficiencies of automation
  • And as a result of both of these, transparency of targeting and reporting that reflects transactional parameters

Over time, as programmatic video matures, we expect there will be fewer and fewer differences between platforms from a targeting, forecasting, and transactional perspective and, in the future, the term “programmatic” may not even be necessary. It will simply be video, bought and sold in screen-agnostic fashion, informed by data with automation at its core. Until then, IAB and the Programmatic Video Working Group hope that this paper will help reduce confusion in the marketplace and serve as a framework for decision making for buyers and sellers. While the current conversations around programmatic tend to be focused on workflow and plumbing, ideally as new efficiencies are found and resources freed, we hope to see additional attention focused on issues such as the user experience and how to make cross-screen storytelling with sight, sound and motion ultimately more effective and relevant for consumers.

Read the whitepaper


Anna Bager