According to the latest estimates, programmatically sold advertising was valued at 546 billion U.S. dollars in 2023, with projections indicating it will reach 779 billion by 2028.
In this article, we give you the lowdown on programmatic video advertising by peeling back its layers. We will untangle the mysteries of bids, algorithms, and target audiences to show you how brands always reach the right users at the right time.
What Is Programmatic Video Advertising?
Programmatic video advertising is the automated process of buying and selling video ad space. It uses technology and data to connect advertisers with their target audiences efficiently.
Programmatic video ad buying relies on real-time bidding (RTB), where advertisers bid instantly for ad space using advanced algorithms and data insights. These bids occur in milliseconds, enabling advertisers to reach specific audience segments across various platforms.
The key is APIs, which connect different platforms, allowing advertisers to optimize campaigns across channels. Think of it as mixing and matching data ingredients, like interests, browsing habits, queries, and demographics, to enhance ads.
Retargeting has improved programmatic video advertising significantly. For example, when those pants you almost bought reappear online, that’s retargeting. It targets users who have shown interest, using algorithms to re-engage them across multiple touchpoints. Platforms like MediaMath, SmartyAds, and AdRoll use dynamic templates for relevant ads that resonate with audiences.
Access to third-party data offers deeper insights into consumer behavior, preferences, and trends, making targeting strategies more effective. This data ensures programmatic campaigns are efficient and precise, with each ad impression strategically placed to connect with the intended audience.
How Does Programmatic Video Advertising Work?
The programmatic video advertising ecosystem involves several key players and processes working together to deliver targeted and engaging video ads to the right audience:
- Advertisers: Companies looking to promote their products or services create and manage campaigns using Demand-Side Platforms (DSPs). DSPs allow advertisers to define their target audience, set budgets, and optimize their video campaigns. Integrating programmatic technology simplifies the media buying process, allowing advertisers to distribute resources more strategically.
- Publishers: Publishers provide the digital spaces where video ads can be displayed. These spaces can range from websites to mobile apps, connected TV, and even social media platforms.
- Ad exchanges and supply-side platforms (SSPs): Ad exchanges are marketplaces with real-time auctions where advertisers bid for available ad space for their ad campaigns. SSPs allow publishers to manage and optimize their ad inventory, making it accessible to potential advertisers. The relationship between ad exchanges and SSPs creates a dynamic marketplace where advertisers can compete for ad placements, making sure the most relevant and valuable ads are displayed to their users.
- Real-time bidding (RTB): Every time you open a web page, app, or connected TV with programmatic video ads, a real-time auction happens. Advertisers bid for the available ad space, and the highest bidder wins the opportunity to display their ad to you as a user. RTB’s lightning-speed nature makes sure that ad placements are optimized for relevance and effectiveness.
- Ad serving and user experience: The ad is sent to the user’s device once the bidding is done and the auction is won. The user experience is prioritized, making sure that the ad is integrated into the platform and the content seamlessly. Advertisers go all out to create eye-catching and contextually relevant video ads that resonate with users.
- Data and optimization: To improve their targeting, optimize their campaigns, and improve overall performance, the advertisers collect and analyze the data from users. Huge data sets give advertisers the space to make informed decisions, which results in more effective ad placements and higher engagement rates.
- Reporting and analysis: Advertisers analyze performance metrics like click-through rates, viewability, and conversion rates after the campaign finishes. This data-driven analysis gives insight into future campaign strategies and the capability to access real-time campaign data allows advertisers to optimize their programmatic video advertising efforts continuously.
Different Types of Video Ads
Various ad formats cater to different marketing objectives and user experiences. Let’s take a closer look at some of these formats:
Instream Video Ads
These seamlessly integrated ads can be split into three categories based on where they appear when a user is watching an online video: when they appear before the video starts (pre-roll), during the video (mid-roll), or after the video ends (post-roll).
What these ads offer is high visibility and engagement opportunities, a common choice for platforms like YouTube where marketers are looking to reach engaged audiences.
Outstream Video Ads
In contrast, outstream video ads play outside of online video content. They appear often in between paragraphs of a text you are reading or in banner ads. Both instream and outstream video ads make use of the autoplay option. Outstream ads are particularly effective at expanding reach beyond video platforms and are a perfect choice for improving user engagement on websites.
In-Display Video Ads
These ads are like a commercial that pops up while you are online browsing, without taking you to another page. They’re designed to blend in with the content you’re already checking out, so you might see one nested in an article, between images, etc. In-display video ads make use of the visual appeal of video content while being perfectly integrated into a wide range of placements.
Learn more about how instream and outstream ads work
Benefits of Programmatic Video Advertising
There are a lot of benefits of programmatic video advertising, which revolutionize the way brands engage with audiences:
- Precision targeting: To make sure that video content reaches specific demographics, interests, and behaviors, resulting in higher engagement rates, programmatic advertising allows for granular targeting.
- Efficiency: Automation removes manual processes and simplifies optimization which allows marketers to put more time into strategy and creativity.
- Real-time optimization: Adjustments can be made in real-time which are based on performance data that make sure wasted ad spend is minimal.
- Cross-channel reach: Video content can be distributed across various platforms and devices, including websites, mobile apps, social media, connected TVs (CTV), and over-the-top (OTT) platforms. The versatility of programmatic video advertising allows advertisers to engage with customers across multiple touchpoints.
- Enhanced user experience: Advertisers can create video content that upgrades the user experience by delivering non-intrusive and contextually relevant video ads.
- Transparency and brand safety: Video advertisers having control over where their ads appear greatly reduces concerns about ad fraud and inappropriate placements.
- Data-driven insights: Having the ability to analyze detailed performance metrics allows advertisers to make better decisions and improve their targeting capabilities.
- Cost per mille (CPM) efficiency: Optimizing CPM rates and making sure that ad spending is directed toward the most relevant viewers in digital video advertising is done by targeting specific audiences and the ability to reach high-value audiences with precision adds to maximizing the return on investment (ROI) for advertising campaigns.
- Display advertising synergy: Seamless integration with display advertising strategies creates a cohesive approach to digital marketing that uses the strengths of both display and video ad tech.
Check out the full range of advertiser features by JWP Connatix
Programmatic Creative Best Practices
The foundation of an effective programmatic video advertising campaign is creative content. Here are some tips for creating successful programmatic ads:
- Keep it short and sweet: With limited attention spans, ads that are 15 seconds or less perform better than longer ones.
- Use high-quality visuals: High-quality visuals and sound are crucial for creating engaging video content.
- Include a strong call-to-action (CTA): A clear CTA encourages viewers to take the desired action, whether it’s clicking through to a website or making a purchase.
- Experiment with interactive elements: Interactive elements, such as quizzes or polls, can increase engagement and make the ad experience more immersive for viewers.
Programmatic Advertising Trends
The future of programmatic video advertising is set to be shaped by several key trends and advancements. Here are some of the most significant developments to watch:
AI-Driven Optimization
Artificial Intelligence (AI) continues to revolutionize programmatic advertising by enabling real-time data analysis and decision-making. AI-powered algorithms are becoming more sophisticated, allowing advertisers to optimize campaigns with highly detailed insights and predictive analytics. This results in more precise targeting and maximized ROI across various channels.
Contextual Targeting
With increasing privacy regulations, contextual targeting is gaining traction as a preferred method for reaching audiences. This approach focuses on the context of the content where ads are displayed, rather than relying solely on user data.
Advancements in natural language processing (NLP) and semantic analysis are enhancing the ability to deliver relevant and personalized ad experiences without compromising user privacy.
The rise of Connected TV (CTV) and Over-The-Top (OTT) Advertising
CTV and OTT platforms are becoming major players in the programmatic video advertising space.
Namely, forecasts indicate that CTV ad expenditure is expected to exceed 42 billion dollars by 2028.
As more consumers shift to streaming services, brands are adapting their strategies to reach audiences on platforms like Hulu, Roku, and YouTube. Programmatic technology allows for highly targeted, personalized video ads on these platforms.
Increased Adoption of In-App and In-Game Ads
Programmatically delivered in-app and in-game ads are gaining popularity, particularly in mobile gaming. The in-game advertising market is projected to reach around 110 billion dollars in revenue in 2024.
These ads offer a unique opportunity to engage users in a positive context, often through reward-based systems. As the gaming industry continues to grow, in-game advertising is expected to expand significantly.
These trends highlight the dynamic nature of programmatic video advertising and the opportunities it presents for brands to connect with their audiences in innovative and effective ways. As the industry continues to evolve, staying informed and adaptable will be key to leveraging these advancements for success.
Examples of Programmatic Advertising
The Mediacom-Mars CPG campaign with JW Player is a great example to highlight the power of programmatic advertising. By using NCS Purchase Data Metrics to refine advertising strategies, the campaign achieved a 93.9% brand safety pass rate and a 79.2% viewability rate.
Through data-driven insights and real-time bidding, JW Player successfully targeted relevant audiences, resulting in a gross return on ad spend of 191 and an effectiveness index of 201. This case study showcases the transformative potential of data and automation in video advertising.
5 Reasons To Choose JWP Connatix
The right tools can significantly impact digital video advertising, and JWP Connatix offers exactly what you need!
Let’s look at the 5 reasons why JWP Connatix is the best choice for your programmatic video ads:
- Craft brand experiences: Over 3600 unique contextual data segments allow for laser-focused targeting – boosting your brand awareness and building up your return on ad spend.
- Expand premium video reach: Spanning across more than 12,000 publishing sites with a remarkable 50 billion monthly ad requests, your message can reach audiences far and wide on the internet.
- Boost video completion rates: JWP Connatix’s secret is in its proprietary tech that analyzes and optimizes engagement which keeps viewers glued till the end.
- Up your viewability game: Only JWP Connatix can take viewability to the next level by peeking into real-time signals from the video player to accurately predict video viewability.
- Keep your brand safe and sound: JW Player scans the video itself, rather than the page, to make sure your ad runs in a brand-safe environment.
On top of this, JWP Connatix’s HTML5 web player brings you a better ad viewing experience by letting you choose from a range of placements for instream ads. Plus, the best-in-class viewer reporting and insights allows you to:
- Track your best-performing content: JWP Connatix’s iewer reporting reveals the top-watched content that’s making waves.
- Dive deep into viewer ad engagement: JWP Connatix tells you how engaged your viewers are by showing you the metric that matters – the percentage completed on average.
If you want to learn more about how JWP Connatix can boost your programmatic video advertising goals, you can book a meeting and let our video experts answer all of your questions!