With Singapore recently playing host to two major digital media events, ad:tech and ATS, much has been said about the rise of RTB and programmatic technologies within online video advertising. Some will hang their hat on the industry seeing widespread adoption of RTB and programmatic-buying mechanisms in the coming months, while others will question its ability to grow, citing an overall lack of inventory within the online video space.
Ultimately, numbers don’t lie. And if you follow the data, the truth is clear: RTB for video is currently the top driver for the industry at large, and that trend is expected to continue. In fact, RTB is forecasted to increase twice as fast as the overall digital video business, according to a Forrester Consulting study titled RTB Powers the Rapid Growth of Online Video. Forrester Consulting projects spending in the online video industry in the United States will hit US$3.6 billion in 2013, increasing to US$4.6 billion in 2014. And RTB will account for 25 per cent of that spend. Spending using RTB in online video is expected to represent nearly 45 per cent of all growth and will help the programmatic-video market cross the billion-dollar threshold in 2014, reaching as high as US$1.14 billion.
This growth can be attributed to several factors, namely a desire for more automated buying and selling, as the definition of RTB continues to evolve from a pricing model into a buying mechanism that allows buyers to transact at real-time or auction-based prices—with far less overhead than the typical IO-based buy.
Closer to home, SpotXchange has seen huge growth in video consumption with the evolution of multiscreen viewing and the adoption of smartphones in Asia. Publishers can see the growth potential of RTB, and many are doing significant trials with the technology. In countries like Indonesia, Philippines and Thailand, the technology infrastructure could potentially play a role in the rate in which RTB technology can be adopted.
The RTB market in Australia is reaching maturity, and RTB has become a daily way of buying digital media. However, like the Australian market, Southeast Asia is lacking good sources of reliable third-party data. Australians have been using their own agency and first-party data, which in many cases, have achieved outstanding campaign results.
Yet something else is at work in this new world of buying and selling digital video. It's an old player whose impact on the industry can’t be discounted: TV. The last few years have seen more and more advertisers moving a small percentage of their TV budget to online video. As consumers continue their love affair with mobile phones and tablets, fuelled by the growth of catchup TV, these ad dollars have flowed from owned-and-operated sites to audience-targeted outposts in order to maximise reach, frequency and budget.
However, there are also other factors contributing to this momentum, and ultimately the more widespread use of RTB and programmatic, including:
Content and device proliferation: In a 2012 Nielsen report, it was found that four out of five people in Asia have watched video content in the past month. The types of content viewed have proliferated in tandem with the devices on which consumers view video, as mobile phones and tablets have proven exceedingly popular for watching all kinds of programming.
Nielsen’s global media-consumption index also shows that Asia (excluding Japan) and the BRIC countries surpassed Europe and western markets on television viewing and video consumption via internet or mobiles. This in part is due to the increasing ownership of internet-enabled devices, which has resulted in simultaneous media consumption. According to the report, in Southeast Asia accessing the internet whilst watching television is the most common media multitasking activity, occurring multiple times per week.
New measurement methodologies: The industry has long complained about a lack of comparable measurement between video and TV, but measurement firms are finally making headway in evolving their measurement efforts to marry TV with digital channels. GRPs (gross rating points) without a doubt will be the common currency that unlocks large TV budgets for online video, but it will be just one part of the online video-measurement ecosystem. Expect to see new metrics and tools pop up for audience measurement and the comparison of viewership and social-media activity.
The opportunity that exists within digital video is clear, and there’s no denying that consumers will continue to bring their viewing habits online. So what do marketers and buyers need to be conscious of?
Many already know the efficiency benefits of buying from a marketplace, but for TV buyers, they need to recognise that RTB and programmatic buying can drive increased transparency and control over their buys and provide valuable insight into their audience segments. For those that cite the complexity of online video ad buying—such as the need to bring together different types of vendors to execute on a buy—as a barrier, RTB can be the equaliser that automates the interactions from planning, trafficking, targeting, reporting and billing.
On an operational level, RTB can make buying online video ads much easier and offers marketers the low cost of overhead they need.
Once marketers and buyers get comfortable with this real-time world, we can only expect growth for these new models to accelerate.
Matt Von der Muhll is director of SpotXchange in APAC.