Programmatic buying, in its simplest form, is the automated real-time bidding and purchasing of digital advertising inventory. It is a powerful tool, but a relatively dumb one—a "go fetch" mechanism designed to buy digital media at the lowest bid for a broadly defined target audience.
But, as video reshapes the digital landscape before our eyes, the requirements for programmatic buying are also rapidly evolving.
First, a little context…
The rise of multi-screen video and the related explosion of online video advertising are well documented. ComScore reports that each month, 225 million Americans now watch video online—including some 40 billion video ads.
BIA/Kelsey forecasts video ad spend will continue to increase by double digits in the coming years. Some of those dollars are new incremental spend, but most of them are shifting from display, print and TV.
If, as the forecasts indicate, video is becoming the preferred digital ad medium, then programmatic must get smarter.
Given three wishes, we feel incorporating these capabilities in programmatic video ad buying would help unlock its full potential:
1. Buy micro-targeted audiences
This requires us to apply advanced levels of intelligence to segmentation. We need to integrate highly reliable data that allows advanced segmentation beyond demographics, e.g., location, current topical context, device, recent behaviors (search, browsing, purchase, etc.), day part, purchase funnel position, etc.
2. Optimize on performance
We need to be able to adjust bids and buys based on how audiences respond to ads during campaigns. In other words, we need campaigns to become self-learning and optimize intelligently.
3. Personalize ads and seamlessly integrate them with micro-targeted buys
Message relevance is becoming the new creative mantra. Producing versions of ads that resonate with viewers in different locations, at different times, with different interests dramatically increases response and engagement. We need to be able personalize ads quickly, affordably and at scale, then deliver them with the appropriate buys.
Our video ad platform already accomplishes these goals as part of programmatic buys of YouTube TrueView inventory, so we've seen their potential first hand. For example, here are a couple success stories featuring campaigns we ran for Wendy's in which we combined ad personalization with micro-targeting and intelligent optimization to deliver exceptional results that led to an annual commitment for 2015.
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