Even though the programmatic approach to media buying emerged back in the 1990s, it wasn’t until the end of 2000s when the concept actually became “the new hit” in digital video advertising.
As of today, the global programmatic video advertising market is still booming.
Namely, according to eMarketer, expenditures on programmatic video ads topped $29 000 000 000 in 2019 in the U.S. and are expected to exceed just over $40 000 000 000 by the end of 2021, which accounts for 49.9% of all US programmatic ad spend.
However, while taking a programmatic approach to ad buying implies a variety of benefits for all parties, there are challenges the industry has yet to overcome.
In this respect, one of the most notable issues is the programmatic supply chain transparency.
Understanding the Supply Chain Structure
As the recent ISBA study unveiled, it may take up to 300 supply chains for 15 advertisers to reach 12 publishers. Of course, the data may vary depending on the ad niche, the study scope and other factors, but the numbers speak for themselves.
Even though programmatic advertising implies the use of technology for handling the ad inventory sales, this doesn’t mean the trading process includes fewer middlemen, if compared to direct deals.
Namely, in the video context, a typical supply chain connecting brand advertisers to end publishers involves numerous intermediaries and usually includes:
Video advertiser >> Ad Agency (Agency Trading Desk) >> Video DSP/s >> Programmatic Video Ad Exchange >> Video SSP/s >> Publisher
Transparency Challenges to Overcome
The complexity of a programmatic supply chain contributes to frequent data access delays, but more importantly, its opaqueness, which leads to lower advertisers’ ROI & less publishers’ ad revenue.
First and foremost, the lack of visibility and traceability makes it more susceptible to ad fraud. In plain words, an advertiser may end up paying for low-quality inventory, neither viewable, nor genuine.
In addition, the lack of consistency in data formatting takes a toll on data fidelity, hence may result in poor data matching. This basically means the video ad may display in the quality, yet completely irrelevant content environment.
How to Drive Transparency in the Programmatic Supply Chain
- Implement brand safety measures
Speaking about the inventory quality, an effective way to ensure its fraud-free essentially implies collaboration with industry-leading ad verification companies, like MOAT or DoubleVerify, just to name a few.
- Support & contribute to standardization initiatives
The implementation and market-wide adoption of standardization initiatives, regarding data formatting can help overcome issues with data matching, hence achieving better video ad adjacency.
- Combine programmatic & direct ad buys
Diversifying a company’s ad buying approach is always a good idea.
In this respect, consider combining programmatic & direct media buying practices, while also expanding your advertising reach in the outstream segment, e.g. working with publishers of premium editorial inventory via AdPlayer.Pro.