Curation is the future of programmatic video as private and open marketplaces blur
The evolution of programmatic video marketplaces is trending to a hybrid of open and private, writes Chris Blok.
This article originally appeared in The Adtech Issue, our current special edition of Marketing mag produced in collaboration with TubeMogul and SpotX.
Since programmatic sales entered the video space a little over nine years ago, the market has continually evolved. Originally, ‘programmatic’ was all about the open marketplace, and allowing advertisers to purchase video ad space on an audience basis through cookie-based targeting. Achieving scale was the core focus, across numerous publishers.
A few years later we saw the introduction of private marketplaces – invitation-only marketplaces where premium publishers offered their video ad inventory to a selected group of advertisers, using a ‘Deal ID’ to transact. These one-to-one relationships gave buyers access to reserved inventory in a premium environment, usually at fixed rates.
Then, in 2015, we saw the next evolution in programmatic buying, in the form of what SpotX calls ‘curated marketplaces’. These are essentially giving buyers access to inventory from a range of publishers, hand-picked against certain criteria, like viewability, audience composition, content vertical or screen type.
Under this model, advertisers maintain full control of their buying criteria, but can scale a buy across multiple publishers using the efficiencies of a single Deal ID. In simple terms, it’s a way of grouping different private marketplaces that meet the same campaign criteria into a single buy. So, rather than looking at separate marketplaces, or the open marketplace’s eight billion daily ad opportunities, to meet campaign requirements, advertisers are able to meet their goals in a single transaction against one Deal ID.
News flash: programmatic is an ecosystem
With ‘programmatic’ approaching its 10th anniversary in the video space, its sophistication has deepened, and its application broadened. It now encompasses a broad array of ad units, sales techniques, and direct and indirect interaction between publishers and advertisers. Its legacy application of selling remnant inventory in the open marketplace is no longer a relevant way of understanding its scope, and supply-side platforms (SSPs) now facilitate direct buys as well as buys run through programmatic infrastructure, like marketplaces.
Today, the savvy seller/buyer blends a family of transaction styles to achieve their goals, as well as a combination of ‘man and machine’ approaches to set up buyer-seller relationships. Today, ‘demand facilitation’ specialists – middlemen that help match buyers with sellers – are responsible for setting up a large portion of deals executed through automated sales platforms.
Quality control and targeting
With curated marketplaces, the power is in the buyer’s court. Buyers can define and launch their own customised marketplace, based on a broad array of criteria, to achieve the scale of an open marketplace, and the safety and supplier transparency of a private marketplace.
Curated marketplaces give buyers first-look opportunities at various publishers’ inventory and prioritised access to inventory, making it easier for buyers to access multiple publishers while still maintaining the same domain-level transparency via a private marketplace. Deals are ‘always on’, meaning whenever a publisher’s inventory matches the buyer’s targeting criteria, it is eligible to be part of the buy.
As the sales spectrum evolves, the stats show globally, growth towards customised options has accelerated. Specifically in this region, we saw in quarter three of 2016, 7% of impressions traded in the JAPAC region through SpotX’s platform went through curated marketplaces, up from a standing start since their launch late last year.
They’ve quickly become a key player in the sales ecosystem. Out of the SpotX-sourced buys (buys where demand facilitation set up deals between buyers and sellers), 77% of revenue came from deals executed through private marketplaces, while 23% were curated marketplaces.
The more sophisticated Australian and New Zealand buyers are setting up specific marketplaces to target viewability, premium publishers and completion rates.
With brand safety a key concern for many advertisers currently, the mechanism gives buyers the peace of mind that their messages will appear in relevant locations with brand appropriate placements. Other common applications of curated marketplaces are to target specific channels, like specific mobile web and app properties, or a collection of premium connected TV apps.
Customisation is limited only by the buyer’s imagination. The ability to pool multiple publishers’ inventory together brings the scale of many audience types and delivery environments to a critical mass for advertisers. Advertisers can sign up to marketplaces built around virtually anything – from year-round contextual opportunities to seasonal opportunities, like audiences defined by party affiliation for election cycles or events such as holiday shopping periods.
All in all, curated marketplaces allow buyers and publishers to retain full control over their transactions and inventory. For buyers, it offers a one-stop solution to gain access to predefined inventory from multiple publishers.
With benefits for both the buy and sell side in terms of efficiency, they’re set to become the most common marketplace-based transaction method, and the new standard on which programmatic advertising’s legacy rests.
Chris Blok is country manager ANZ at SpotX.
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