Programmatic isn’t just for banners anymore. Video is a fast-growing part of the programmatic ecosystem, and advertisers are purchasing programmatic video ads to run on devices from desktops to mobile phones to connected TVs. Topics in this webinar include: eMarketer’s latest forecast of programmatic ad spending; Why connected TV is a gateway to buying programmatic video on other platforms; How recent programmatic ad platform acquisitions by major media players including Facebook, Yahoo, AOL, Google and Comcast will play out for buyers and sellers; Inventory quality issues and other obstacles holding back programmatic video advertising.

1. © 2015 eMarketer Inc.
Programmatic Video: The Dramatic
Rise of Connected TV, Apps and Ad
Spending
Paul Verna
Senior Analyst
May 2015
Made possible by

2. © 2015 eMarketer Inc.
Agenda:
 Definitions
 Programmatic video ad spending data
 Myth busting
 Challenges: inventory quality, fraud, brand safety,
viewability, standardization
 M&A activity driven by the shift to programmatic
 Next up: over-the-top (OTT), connected TV, linear TV

3. © 2015 eMarketer Inc.
Definition of terms
 Programmatic advertising – an automated,
technology-driven method of buying, selling or fulfilling
ad placements
 Real-time bidding (RTB) – the buying and selling of digital
ads through real-time auctions that happen in the time it
takes a page to load
 Programmatic direct – direct buys that use some level of
automation

4. © 2015 eMarketer Inc.
Within
programmatic,
there are two
main
subcategories:
RTB and
programmatic
direct
Source: eMarketer, 2014

5. © 2015 eMarketer Inc.
Programmatic
will be
responsible
for more than
50% of US
digital display
ad spending
for the first
time this year

6. © 2015 eMarketer Inc.
Mobile will overtake desktop as the biggest
programmatic display ad format
 Mobile vs.
desktop ratio
will be 56-44 in
2015, up from
44-56 last year
 By 2016,
mobile’s share
will approach
70%

7. © 2015 eMarketer Inc.
One researcher sees double-digit growth in US
programmatic display through 2018
 By then,
$27.7 billion will
be transacted
programmatically
—more than
double the 2015
figure

8. © 2015 eMarketer Inc.
US programmatic
video ad spending
will top $2 billion
this year and
approach
$4 billion
next year
By 2016, programmatic
will account for 40% of US
digital video ad spending

9. © 2015 eMarketer Inc.
The share of US video advertising transacted
programmatically should continue to rise
$0
$2
$4
$6
$8
$10
$12
$14
$16
2013 2014 2015 2016 2017 2018 2019
US Digital Video Ad Spending, 2013-2019, and
Programmatic Video Ad Spending, 2013-2016 (billions)
Digital Video Programmatic Video
Source: eMarketer, 2015

10. © 2015 eMarketer Inc.
Video makes up a small but growing portion of
US programmatic display ad spending
 In 2015,
just under 15%
of programmatic
display
investment will
be for video ads,
but by 2016 this
share will
approach 19%

11. © 2015 eMarketer Inc.
Video and mobile RTB are the main drivers
behind increases in programmatic ad spending
 Desktop’s share of the
RTB market will drop as
video and mobile ramp up

12. © 2015 eMarketer Inc.
Marketers see video and mobile as areas with
the most opportunity for programmatic buying
 Video-rich areas
such as TV and
social are also
on marketers’
radars
 Marketers are
less keen on
opportunities
in display

13. © 2015 eMarketer Inc.
Most US marketers expect to boost
programmatic ad budgets
 One-third
will keep
programmatic
budgets the
same, and a
negligible 2%
will decrease
them

14. © 2015 eMarketer Inc.
TubeMogul saw big increases in programmatic
direct video ad impressions
 Mobile
impressions
also rose
dramatically
YoY in Q1 2015

15. © 2015 eMarketer Inc.
There are gaps between buyers and sellers on
how they’re allocating ad budgets and inventory
 Sellers are
pushing mobile
and video
inventory, but
buyers continue
to allocate the
biggest portion
of their digital
budgets to
display

16. © 2015 eMarketer Inc.
Programmatic video will experience more
growth than other ad formats in 2015
 These include
mobile display
and lower-funnel
“programmatic
high impact”

17. © 2015 eMarketer Inc.
Myth #1: Programmatic is for remnant inventory,
while direct is for premium inventory
 Technically, programmatic and direct refer to ways of
buying ads, not to the ads themselves
 In 2014, 51% of publishers made their premium video
inventory available through programmatic channels *
 Joe Pych, CEO of NextMark: “Premium is in the eye of
the beholder.”
* Source: AdapTV “2014 State of the Video Industry” report

18. © 2015 eMarketer Inc.
Myth #2: Programmatic is for direct response
campaigns, not brand-oriented ones
Econsultancy/Quantcast report:
 62% of marketers are running programmatic
campaigns with branding objectives
 40% of programmatic spending goes toward branding
campaigns
 Advantages of programmatic branding include
increased efficiency, reduced costs, the ability to
optimize in real time, and the opportunity to leverage
first-party data

19. © 2015 eMarketer Inc.
Myth #2: Programmatic is for direct response
campaigns, not brand-oriented ones
“Programmatic video is not just about
direct response dollars. Brand
marketers like Kraft and Kellogg's
want to use their own first-party
data to add value to their
campaigns.”
— Lauren Wiener, global head of sales and
marketing at Tremor Video

20. © 2015 eMarketer Inc.
Myth #2: Programmatic is for direct response
campaigns, not brand-oriented ones
“ Programmatic has its roots in display,
where it’s generally focused on
performance and driving down prices.
As it’s moved to video, we've had
more brand-oriented media
coming in, and with a different set of
goals around it.”
— Guy Yalif, VP of global marketing at
BrightRoll

21. © 2015 eMarketer Inc.
Myth #3: Programmatic saves time by
eliminating unnecessary steps
“We don’t save time, because
[programmatic] has unlocked so much
more from the real-time metrics
standpoint.”
—Christine De Martini, director of global
media and marketing at Electronic Arts

22. © 2015 eMarketer Inc.
Brands are quickly bringing programmatic video
ad-buying processes in-house
 In mid-2014, few US
brands had their own
programmatic video
technology, but 88% said
they planned to obtain
this capability within the
next year

23. © 2015 eMarketer Inc.
Challenges: nonhuman traffic (NHT)
 Study by White Ops and the Association of National
Advertisers (ANA) estimated that global advertisers will
lose $6.3 billion to bots in 2015
 Bots accounted for 23% of video impressions, 17% of
programmatic inventory and 11% of display impressions
 Over 67% of the bot traffic in the study came from
residential IP addresses

24. © 2015 eMarketer Inc.
Challenges: viewability
 Viewability,
fraud and
verification
rank high among
concerns for
video ad buyers
and sellers

25. © 2015 eMarketer Inc.
Challenges: viewability
 Ad buyers and
sellers are split
over current
standards for
display ad
viewability

26. © 2015 eMarketer Inc.
Challenges: loss of quality control
 84% of US
media buyers in
a Digiday survey
said
programmatic
buying resulted
in “moderate” or
“significant”
loss of quality
control

27. © 2015 eMarketer Inc.
Challenges: placement transparency
 The same study
found that
placement
transparency
was also a
barrier in
moving dollars
from direct to
programmatic
channels

28. © 2015 eMarketer Inc.
Challenges: most premium video inventory sold
directly
 Despite gains in programmatic, publishers still sell most
of their premium inventory through established channels
 The multibillion-dollar digital video ad industry was built
on direct relationships between sellers and buyers
 It will take more than buzzwords to change this
paradigm

29. © 2015 eMarketer Inc.
Challenges: standardization
 Scalability depends on standardization, which gets more
difficult as ads migrate to new devices and screens
 Standardizing audience measurement is an even bigger
challenge
 Signs of things to come: Nielsen/Roku, Cablevision/ESPN

30. © 2015 eMarketer Inc.
Programmatic video underlies recent acquisitions

31. © 2015 eMarketer Inc.
Programmatic video underlies recent acquisitions

32. © 2015 eMarketer Inc.
“ … a competitive
programmatic
platform made
AOL more
attractive.”
—Rajeev Goel, CEO
of PubMatic
“It's easy to see the attraction:
consumer and geolocation data
from Verizon, coupled with
programmatic capabilities
and premium inventory from
AOL and Huffington Post.”
—Dominique Delport, global managing
director at Havas Media Group
Programmatic video underlies recent acquisitions

33. © 2015 eMarketer Inc.
Next up: OTT

34. © 2015 eMarketer Inc.
Next up: linear TV
 Not much
happening yet,
but expect this
space to heat up

35. © 2015 eMarketer Inc.
Next up: linear TV
 With programmatic TV,
the ability to do pinpoint
targeting is top on the
wish lists of ad buyers
and sellers

36. © 2015 eMarketer Inc.
Next up: linear TV
 Placemedia launched a “programmatic upfront” in
conjunction with The Trade Desk, Tremor Video and
Collective
 ESPN made parts of “SportsCenter” inventory available
through real-time auction
 TubeMogul rolled out a programmatic TV buying product
 Magna Global and Cox created a private marketplace for
TV advertising

37. © 2015 eMarketer Inc.
Next up: OTT, connected TV, linear TV
“Once there’s a way to be fully
addressable in television and
connect back to that universal
profile that you have, you’re going
to be able to leverage the same
infrastructure to do what you’re doing
online offline. That’s a long-term
roadmap, but that’s where this is all
heading.”
—Lindsay Fordham, director of product
marketing at Rocket Fuel

38. © 2015 eMarketer Inc.
Takeaways:
 Programmatic video is on a growth trajectory
 Marketers will continue to increase programmatic
budgets, and many will bring automation in-house
 There will be more consolidation among media
companies, MVPDs and ad-tech firms around
programmatic video initiatives
 Many challenges stand in the way of more widespread
adoption, but programmatic video will gradually spread
from digital platforms to OTT and linear TV

39. Melinda McLaughlin
Chief Marketing Officer
mmclaughlin@tremorvideo.com
@MelOnMktg
TremorVideo.com

44. Thank You!
@MelOnMktg
mmclaughlin@tremorvideo.com
TremorVideo.com

45. © 2015 eMarketer Inc.
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Paul Verna
Programmatic Video: The
Dramatic Rise of Connected TV,
Apps and Ad Spending
 The State of US Digital Advertising 2015: Mobile Trumps
Desktop, People Trump Devices
 Video Advertising Benchmarks: What Metrics Can (and Can't)
Tell You About the Bigger Picture
 2014 Programmatic Advertising Forecast: Digital Display
Spending Broadening Beyond Open Exchanges
 Programmatic TV Advertising: Small Investment Today, Big
Opportunity Tomorrow