Programmatic Video’s Challenge: What Will It Take to Unlock Brand Spending?

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Ahead of next month’s ATS Singapore on 7 July Byron Munson, Videology, regional director, APAC, discusses what it will take to attract brand spend (which has historically been the domain of TV budgets) to digital video in a world of fragmented audiences, especially as the APAC’s middle class swells in number.

Brand advertisers love television. So what is holding back marketers in APAC from embracing digital video with similar enthusiasm, while budgets in other regions are beginning to filter across devices? The reasons are complex, but first it’s important to understand the growing importance of video in the lives of consumers in the region.

In terms of viewing patterns, we’ve shifted from a world of many people to one device, to a world of one person consuming from many devices—often at the same time. A recent research survey from Nielsen Research commissioned by Videology found that 80% of consumers in Southeast Asia own a Smartphone, 80% own a computer, and 50% own a tablet.

Increasing wealth across the region and a growing middle class is pushing the purchases of electronics—televisions, computers and mobile devices, to name a few—to unprecedented heights. This increase in device ownership is driving overall media consumption, including both linear television and digital video viewership.

Programmatic buying technologies evolved to help marketers tap into these fragmenting audiences. What will it take for brands to begin to see the value that programmatic strategies can add? There are four key areas that need to be addressed before we will begin to see this happen in meaningful ways.

1. Redefining Programmatic Beyond RTB
In the early days of programmatic technology, when automated buying was used primarily by direct response advertisers to purchase plentiful banner advertisements, the term applied almost exclusively to real-time bidding (RTB) models. In the world of video, this is no longer the case. It is important that brand advertisers understand that programmatic is no longer synonymous with RTB, but rather refers to the use of data, technology and math to automate buying processes and improve results.

Brand advertisers want the same level of certainty in their video advertising that they get from their television advertising. In an RTB scenario, inventory goes to the highest bidder at that moment.

So, while RTB can be beneficial for achieving cost efficiency, it obviously cannot offer the same level of advanced planning as guaranteed bookings. Programmatic buying, however, can be used in a reserved manner, where advertisers are guaranteed a certain level of advertising impressions at a pre-negotiated cost running over a given time period, just like television buying. In fact, in Q1 2014, 97% of video campaigns in APAC placed on the Videology platform were purchased on a guaranteed cost, ensuring the right content at the right price for both the advertiser and the publisher.

2. Break Down Media Planning Siloes
As mentioned above, a recent Nielsen research study found that consumers in APAC are consuming video content seamlessly across devices, often simply deferring to the best screen available at the time. We have seen that brand marketers who think of television and video in this complementary manner generally achieve the best campaign results, whether the goal is incremental reach, or less tangible metrics, such as brand affinity.

As television and video viewing continues to converge, it’s no longer about planning TV, then planning video. It’s not even about shifting budgets from TV into video. It’s thinking about the consumer’s viewing journey throughout the day. Television’s peak viewing time is often online video’s off-peak period, and vice versa. We see this throughout the day as someone checks their smartphone on the way to work, moves to PC during their lunch break, then watches TV in the evening, perhaps with a tablet computer in hand. For today’s video consumer, it’s all connected. And for brand advertisers hoping to connect, it needs to be as well.

3. Develop Sources of Additional Data
Brand advertisers want to know who is seeing their ad. Data allows brands to understand the demographics, psychographics and buying habits of the audiences exposed to their messages. But in APAC, we need more of it.

Several third-party data providers are making their way into the region, but compared to other parts of the world, data usage in APAC is still in its infancy. Of course, media companies themselves are often best source of audience data. Publishers and broadcasters, through registration and other means, are uniquely equipped to gain insight into their core users, in a non-personally identifiable manner. Those who are able to connect the dots and authenticate their users across devices are perfectly positioned to guide brand advertisers in their cross-screen planning efforts, and will be leaders in capturing these new sources of revenue.

Publishers and media companies need to work together with their ad technologies partners to make this happen and bring greater transparency to video advertising. We need a collaborative, self-regulated approach to data. This will allow brand advertisers to provide richer and more relevant consumer experiences, thus achieving the most ROI from their campaigns, and simultaneously will allow publishers to extract the most value from their audiences.



4. Bring TV-like Experiences to Video

And finally, bringing more premium content to digital video is perhaps the single greatest development that will bring more brand advertisers into the medium. Despite the audience-centric nature of programmatic video buying, content still matters. Currently, demand for professionally produced, TV-like content greatly exceeds supply in the APAC, and the region’s top broadcasters are not among the region’s top video sites. Media companies need to change this by providing more digitally distributed content, and more opportunities for brands to connect with their audiences online.

Consumers are ready and waiting. As more premium broadcast quality content becomes available across APAC, the number of illegal downloads has decreased 50% since 2011. The number of people viewing content from legitimate digital video sources has also increased 88%, according to the Videology commissioned Nielsen study.

The survey also found that consumers understand that the content is not free—23% would be willing to pay for digitally streamed broadcast content, while 65% would prefer an ad-supported model. There is a very real opportunity for broadcasters to monetise their content online. Audience behaviour is laying the opportunity out.

In short, brand advertisers looking to extend their television campaigns into video want a TV-like experience in terms of quality programming, as well as in guarantees in delivering the right audience, at the right cost. These are reasonable demands, which the re-defined Programmatic video landscape can deliver and ones that all of us working in the video space must focus on delivering.

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