What is Programmatic Video Advertising? (And Why It’s Smart To Use It)

Back in the olden days (so about five years ago), you bought ad space by speaking to other humans. Media buyers would get inventory and negotiate ad placement by contacting multiple companies.

Then came data and machine learning and the whole thing changed. Today, roughly 75% of video ads are programmatic. What does that mean?

Programmatic video advertising refers to the practice of using bots to buy ad space based on set prerequisites. You, the advertiser, define your ideal audience in detail, provide access to your ads, and set a budget.

The program takes that user data and uses real-time bidding to display your ad to a user that fits your ideal client profile. As with Google PPC ads, the ad with the highest bid wins. The whole thing happens in the time it takes to load a page.

Theoretically, this is a hyper-effective move. Machines are more efficient at communicating with each other and using the data you give them to get your ad in front of the right person. Plus, improved targeting should help you increase your conversion rates and lower the cost per acquisition because you are only going after interested parties.

So it’s no wonder that programmatic video advertising is growing, mostly driven by YouTube’s TrueView ads and better internet loading speeds that allow for quality browser video ads.

Why is programmatic video advertising useful?

Running targeted ads that only show up in front of people interested in what you’ve got to offer sounds like a marketer’s dream. Let’s take a look at what makes programmatic video advertising useful.

Excellent reasons to go programmatic

Reach a super-specific audience

Traditionally you had the option of buying ad space in a popular time slot on TV or on a site your audience may frequent. Programmatic advertising uses behavioral data to find your audience and display the perfect video ad, making it much more effective.

Cross-channel reach

Because programmatic advertising relies on data, it allows us to reach across channels and serve targeted ads on mobile, desktop, and even TV sets.

Easy to tweak campaigns

You can make adjustments to the info you’ve provided and change the parameters of ad buying altogether. It’s quick and easy, and doesn’t involve lengthy meetings or re-negotiations.

No need for IRL deal making

Programmatic media buying lets the algorithms do all the work. You don’t need to painstakingly build direct relationships with buyers and sales teams. You just need to give the algorithms enough info to be able to make snap data-based decisions.

Quantitative reporting

All media ad space reports are based on data and communications between machines. There’s no guesswork here and you can use the data to find out just how successful your ads are and then improve them.

It’s not all sunshine and algorithms

Like all good things, programmatic video advertising comes with some challenges.

Ad fraud

There’s an old rule on the internet — if it’s online, someone will try to hack it. Bots can be used to fool the system and artificially drive prices up, resulting in a higher spend. However, as the tech gets more sophisticated, we’ll see more safety measures put in place.

Potential loss of granularity

If you’re using an ad network, you might not have exact control of where your ad is shown. This can be a challenge with ad networks, so if you use one, pick a network with a diverse portfolio and define your audience well.

Less personal

Wait, isn’t this a contradiction!? The whole point of programmatic buying is to reach a super targeted audience.

Sure, certain algorithms focus on the bid price to help you reach a wider audience, but defining the parameters of your campaign will help you avoid reaching the wrong people.

Rely on third-party metrics

This is a common problem with third-party apps. Make sure you know how the service you use collects data, because you could be getting a skewed view of the market and your ads’ performance.

Types of video ads

We looked at the good and the challenging aspects of using programmatic advertising. Now it’s time to meet the three types of programmatic video ads.

In-stream

In-stream ads are the ones that play before you start a video (you’ve seen them on YouTube), the ones that interrupt you mid-stream (much like traditional TV ads), or the ones that play at the very end.

Out-stream

These are the video ads you see in the middle of online articles.

Like pop-ups, out-stream video ads can be a pretty controversial ad format. Some people love them, but others stop reading articles and run away on sight, so use them wisely. They can be effective depending on your target audience.

In-display

In-display ads appear at the top of your YouTube feed (that’s the ‘Up next’ column to the right of the video if you’re watching on desktop displays). Unlike in-stream and out-stream ads, they don’t autoplay. You’ve got to make an active choice to click them and find out what the ad is all about.

How to make programmatic video ads

Ready to start making some ads? Use the Biteable video maker to get started for free. We’ve got hundreds of free templates you can use. Here’s just a couple to get you started:

Pick yours and start designing your ad in seconds. But what’s in a good video ad?

An effective programmatic video ad:

  • Takes placement into account. Not every video will work with every ad type, so plan your ad based on its placement. Something that’s perfect for in-display may not work well in out-stream.
  • Keeps it short and sweet. Less is more. Get to your message quickly and be as clear as you can.
  • Turns up the entertainment factor. This is especially important for in-stream and out-stream ads because you’re fighting for the user’s attention with the content they’re trying to watch. An engaging opening is essential to get the upper hand and entice them to watch.

And, as with any other piece of content, it’s absolutely essential to create with your audience in mind.

Think about your audience when choosing the perfect template, writing the script, choosing the color scheme, and adding the right audio track.