Programmatic video advertising spend takes off with main focus on YouTube

Advertiser adoption of programmatic video is on the rise, with 60 per cent of U.S. digital video ad spending expected to be transacted through programmatic channels this year.

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This will be a substantial increase from the 39 per cent share held by programmatic video over last year, with an eMarketer report stating that one of the main contributors to programmatic video ad spending growth is YouTube. Further, latest estimates indicate nearly 21 per cent of US digital video ad revenues in 2016 will be spent on programmatic video and YouTube will benefit with its size and early adoption of programmatic advertising.

Programmatic video is the use of software to purchase digital video advertising. The benefit of programmatic video versus traditional video ad buying is that it uses real-time data to get a video ad in front of the right customer at the right time.

The report suggests that the programmatic ad category indicates that video’s share of total U.S. programmatic digital display ad dollars is somewhat smaller (24.5 per cent). This can be largely attributed to the limited supply of video ad inventory.

Multiple factors will drive programmatic to account for nearly three-quarters of US video ad spending by 2018, the report suggest. Additionally, greater comfort with programmatic technology and audience-based selling will drive publishers to offer a greater portion of their inventory for purchase programmatically.

As advertisers increase their demand for more audience-informed video, publishers must turn to programmatic to enable such data-driven capabilities to increase. Additionally, many are comfortable doing so now that programmatic ad technologies have matured enough to allow publishers to ensure that the final product is similar to traditional direct-sold agreements.

Further, as comfort grows, publishers will make available a greater portion—and a more premium portion—of their inventory to advertisers willing to pay more to reach the right audiences.

Overall, programmatic ad spending in the US is exceeding projections, and will continue to grow at double-digit rates for the next several years. The report indicates that this year, programmatic will account for 73.0 per cent of all US digital display ad spending, a higher portion than previously estimated. Programmatic’s share will continue to climb over the next couple of years, reaching 82 per cent of US digital display ad spending, or $37bn by 2018.

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