David Muhle, VP Sales and Channel for EMEA, Ooyala looks at the rise of holistic advertising for more effective video advertising decisions.
The video advertising market has undergone tremendous change looking for the next big thing which solves the issue of managing and maximising sales across direct and programmatic channels simultaneously.
While most advertising purchases are made using automated systems called ‘programmatic trading’ the direct market, often used by publications and on television, is still effective in a challenging market. For advertisers to fully optimise their campaigns, they need a platform that effectively uses both automated and manual purchase.
For publishers, the mechanics of this complex market makes knowing where to sell the advertising to, and how to do so at maximum price, difficult. Using the holistic platform, publishers have a better overall understanding of their channels, allowing them to streamline advertising sales and increase their ROI. A holistic platform creates the conditions necessary to effectively combine direct and programmatic ads, something that had previously been difficult and costly.
How holistic advertising works
In traditional advertising, a buyer is bound to a seller. This means that if the demand for their supply increases over time, the seller can earn more while still holding onto the same space, then sell it on later using programmatic trading. In a programmatic market, where a valuation of an ad impression can be made at any given moment, the seller becomes at risk if they do not sell their full range or their demand decreases.
A platform with a holistic approach to advertising pools together all the benefits of the traditional and programmatic markets, to find the best combination of the two. The result is a higher ROI, more satisfied advertisers, and a better level of overall understanding. Direct and programmatic ads are simply added together in the holistic model, and then strengthened by each other’s characteristics.
The benefits of a holistic platform that combine direct and programmatic adverts are numerous. The ability to optimise sales and see a higher average value (increased CPM) across all video adverts, both programmatic and directly sold ads, allows for more effective forecasting for future campaigns. The platform also increases the control over demand based on advertising rules that publishers enforce across all channels. This results in smarter advertising that reaches the right audiences.
Other benefits include a unified view of stock status and sales channels for publishers which improves data analysis and allows publishers to make objective advertising decisions based on that data. This, in turn, equates to cost savings because you only need to manage one advertising platform.
Are the market players ready?
Several market players are already starting to use the holistic model. In a study for SpotX, Researcher IHS forecast that $2.25 billion, which is over half of all video advertising revenue, will be generated programmatically by 2020, with the UK remaining Europe’s top programmatic market. Here, programmatic digital video currently makes up 32% of digital video net ad revenues which gives operators an enormous opportunity for sales. This opportunity can be acted upon most quickly and effectively via the holistic ad platform.
The same study found that non-traditional media companies offering video ads are also moving their businesses over to the programmatic market. Many of these companies see it as an opportunity to differentiate themselves from traditional TV companies and quickly achieve economies of scale. Using the holistic platform, they can close the gap between traditional, direct and automated marketing to become an even more attractive market player.
Holistic advertising also helps publishers compete with Facebook and other social media platforms, since the holistic ad model gives them more ways to utilize their entire stock by making more money on live videos, more effectively, and creating economies of scale.
The benefits of holistic advertising also apply to mobile marketing, where consumers in the U.S. and U.K. spend the most daily hours watching non-linear, VOD viewing. According to eMarketer in 2016, 69% of U.S. digital video ad spending is forecast to be programmatic this year. Holistic advertising will be a key factor in continued growth for publishers because the demands of the market are so fragmented.
A business’ aim is to create smarter ads based on consumer behavior and viewing patterns on different platforms, and only a holistic platform can do this effectively. A holistic ad platform will lead us into a new and dynamic era for advertising, in which video is the focus.
By David Muhle
VP Sales and Channel for EMEA