MediaVideoBrands Adopt Programmatic Buying While Agencies Lag Behind

Brands Adopt Programmatic Buying While Agencies Lag Behind

Brands are allocating 60 percent of their video spend to programmatic buying, while agencies spend more than 20 percent less, leaving brands to purchase programmatic in-house.

Brands seem more willing to adopt programmatic technology than agencies, according to a recent study by Adap.TV, a division of AOL platforms.

On the whole, ad spending on video has risen for the fifth straight year, and that spending is increasingly directed at programmatic channels. Brands reported that a whopping 60 percent of their budgets are now focused on programmatic buying, as opposed to agencies, which are allocating just 38 percent of their budgets to programmatic.

adaptv-budget-allocation

This year’s report signifies a turning point in attitudes toward data-driven buying. “Brands are aggressively looking to programmatic as the mechanism to activate large amounts of targeting data,” says Toby Gabriner, chief executive (CEO) of Adap.TV.

And agencies’ failure to adapt to programmatic buying seems to be driving brands to manage their programmatic video buying efforts in-house. Eighty-eight percent of brands say that they will begin to buy in-house within the next 12 months, as opposed to just 26 percent of agencies.

adaptv-in-house-buying

The brands that expressed a desire to manage their own programmatic buying felt as though they had no choice. “They did so because their agencies lacked the expertise to do their programmatic buying for them,” according to the report.

Demand-side platforms (DSPs) are also on the rise, as brands and agencies scramble to keep up with programmatic buying technology. The number of brands buying from DSPs has risen to 47 percent as opposed to just 21 percent last year, while 74 percent of agencies are now utilizing DSPs.

adap

While brands seem just as likely to buy video inventory direct from publishers as they did last year, agencies are moving away from publisher direct sales, down to 67 percent from 86 percent last year.

These shifts in buying trends are driving publishers to increasingly adopt automation technology. “Many publishers previously viewed programmatic advertising as a way their video inventory would be commoditized,” says Gabriner, “but the opposite happened -75 percent of publishers said they saw an increase in their ad rates, even as they made nearly one-third of their video available for purchase through programmatic.”

While video budgets are increasing, video ad buyers aren’t planning overall budget increases to facilitate purchases. Instead, they’re increasingly funneling money from other channels. Display, broadcast TV, and cable TV are the hardest hit, with 47 percent of buyers shifting money from display to video, 40 percent planning to decrease broadcast TV budgets, and 35 percent cutting cable TV budgets.

adaptv-spending-changes

Buyers could be shifting budgets away from TV because “legacy technology systems and a lack of targeting data” have made automated ad buying difficult for networks, though television is rapidly catching up to other platforms. “Over the last couple of years there have been tremendous advances in both these areas, and programmatic TV is now at an inflection point,” says Gabriner.

In fact, 43 percent of brands say they are using data-driven technology to drive traditional TV transactions, and AOL platforms expects that number to jump to 60 percent in the next year.

adaptv-tv-programmatic

There are certainly still roadblocks on the path to fully integrating programmatic technology. Sixty-two percent of buyers are worried about ad viewablity, while ad verification and fraud are also concerns. Only 25 percent of both brands and agencies felt fully up to speed on all these issues, which clearly suggests that a call for more transparency in the programmatic buying process is in order.

adaptv-video-quality-concern

Related Articles

Facebook goes after clickbait headlines - five tips to maintain reach

Content Marketing Facebook goes after clickbait headlines - five tips to maintain reach

1y Tereza Litsa
What makes videos effective on Twitter?

Social What makes videos effective on Twitter?

1y Tereza Litsa
YouTube is getting rid of 30-second unskippable pre-roll ads

Ad Industry Metrics YouTube is getting rid of 30-second unskippable pre-roll ads

1y Al Roberts
AOL tries to lure leads with free wireless data

Display Advertising AOL tries to lure leads with free wireless data

2y Al Roberts
Top three programmatic trends in 2017

Digital Advertising Top three programmatic trends in 2017

2y Daniel Surmacz
First Party Data is Integral to Breathing New Life Into TV

Analytics First Party Data is Integral to Breathing New Life Into TV

2y Erin Madorsky
NFL revises its short-sighted social media policy

Media NFL revises its short-sighted social media policy

2y Al Roberts
John Lewis’ “#BusterTheBoxer” Tops Most Shared Ads Of 2016

Campaigns John Lewis’ “#BusterTheBoxer” Tops Most Shared Ads Of 2016

2y Christopher Ratcliff