"Marketer's Note" is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O'Connell, Director of Research, AdExchanger Research.
I attended “TubeMogul University” last week in California in order to get a pulse on the latest in programmatic video buying and selling and wanted to pass on what I heard in the hopes of inspiring continued dialogue among the marketing community on this topic. And while it’s tough to capture four days in just three bullets, I am going to try:
- Marketer interest in programmatic is way up, but understanding remains mixed. While last year’s event drew just one marketer, the opinionated and visionary Gary Milner of Lenovo (who, thankfully, was back again this go-round), this year saw a massive upswing in marketer attendance. Overall numbers were still low, yes, but a 10x increase in brands is nothing to sneeze at. In speaking to them, I found a mix of programmatic practitioners who spent their days with their hands in the tools; programmatic participants, who, through agency or vendor partners were active buyers with a strong understanding of the fundamental principles; and the curious, who were not yet active but had come to the conclusion that programmatic is fast becoming a real, and critical, force in the future of digital media buying. Long and short: it’s clear there’s still an unmet need for intelligent, understandable discourse on what the business implications of programmatic are for brands. As Gary Milner noted, “Attention is the new currency. The new home page is where everyone is. And everyone is all over the web. To get all over the web you need programmatic platforms.”
- TV thinking is infusing digital video buying, for better or worse. I found myself struck by how TV buyer-friendly digital video buying has become in a very short time. With tools oriented toward GRP-based planning and buying and Nielsen OCR built right into the UI, it’s not a big leap for a TV buyer to start placing digital video orders. What’s worrisome about this trend, however, is that it points to a - and forgive me for saying this - dumbing down of digital buying. Reach-based buying against women 25-54? That’s the best we can do? If video is good for nothing else, it’s great for emotionally connecting. So, what about targeting lapsed customers? Or building a look-alike model based on the highest value loyalists? Yes, these kinds of programs are starting to show up but I am afraid not enough. I get that tapping into the $70+ billion TV spend necessitates speaking the language of TV buying, and that it’s perhaps a short term compromise in service to the longer term vision of data-driven cross platform video initiatives, but I’d love to see us push the envelope a little harder with the TV folks – how about agencies having (mandatory) seminars for TV and video buyers where each learns the ins and outs of the other’s world? There would be some pain, but also gain, on both sides.
- Premium publishers need more inventory to fuel programmatic video selling. For all the wild excitement about programmatic video (and I do truly believe it’s well-placed), there remains a difficult reality, which is that the economics of video ad sales don’t yet favor programmatic: premium publishers consistently sell out their video inventory via traditional, IO-based buys (with very, very high CPMs) and that leaves the programmatic video inventory stream all but dry. There was a lot of talk about the massive volume of programmatic video inventory now available, and growth charts showing strong year over year increases, but there were both implicit and explicit acknowledgements throughout the event that much more great inventory is needed to effectively meet growing brand marketer demand. To combat this challenge, programmatic sales leads like Matt Prohaska, Programmatic Advertising Director of the New York Times are pursuing multiple concurrent strategies to beef up their company’s video inventory with an eye toward private, direct deals with high quality buyers. That’s a good thing. But in some ways we may just be coming closer and closer to an inevitable standoff between the buy and sell sides: who will force who’s hand? Will buyers force premium sellers into more and more programmatic sales deals? Will sellers hold great inventory hostage from programmatic buyers? As with many things, we’ll probably end up somewhere in the middle with the market normalizing around a new normal in pricing and buyer/seller relationships. Sales organizations will evolve wherein there becomes a middle sales layer between “direct” and “indirect” – with programmatic powering standardized inventory at CPM’s somewhere between unsustainably high and bottom of the barrel, and marketers will use that massive volume of good, but standard, inventory to complement their high touch, custom programs.
As always, I’d love to hear what you think!