A lot can happen in a year, especially in an industry as fast-paced as ad tech. For video advertising, in particular, 2014 was undeniably a watershed year.
Digital video took a giant leap into programmatic buying, experiencing huge gains in both viewership and ad spend.
With such an eventful year under our belts, I’m confident that this will be the year that online video advertising fully comes into its own.
Technology has transformed digital media buying, as advertisers and publishers continue to lay the groundwork for a fully automated video ad future. Programmatic video ad sales in EU-5 reached €226m in 2014, according to eMarketer, and is expected to soar 63.5% this year to reach €369m by the end of 2015.
Advertisers and agencies are already sold on programmatic, but in 2015 we will see publishers fully embrace programmatic technology as they begin to realise the huge opportunity it represents for efficiency and financial growth. We can also expect to see gains in open, RTB-based video ad exchanges, as advertisers seek to consolidate their video ad buys via a single programmatic platform.
As consumers move their media attention to smartphones and tablets, it makes sense for advertisers to follow the trend. However, many advertisers have remained cautious of the format’s measurable impact. In 2014, mobile inventory supply outstripped demand, which generally kept CPMs lower than desktop. This was due to a lack of standard practices around how to effectively target, measure and frequency cap mobile video ads across devices. But that’s all about to change in 2015 with the advent of sophisticated mobile targeting and measurement tools which allow advertisers to target and measure in the same ways they can on desktop devices.
2014 was also a challenging year for ad tech in the capital markets, as a handful of newly public companies saw their share prices decline. At the same time, it was a year of progression, with a number of big exits via acquisition for video platforms, as larger technology companies began to understand the value in video. This progress will only continue over the next year with ad tech companies rising back to favour in the capital markets. Video platforms providing full-service ad buying and management solutions will emerge as leaders, attracting a greater slice of advertisers’ video budgets. On the other hand, video platforms offering point solutions will be acquired by larger players, or fail to gain critical mass.
Looking at the current state of the ad tech industry, it’s easy to forget that it is still a young category. But the future for automated, targeted and measurable video advertising is bright. As we move into 2015, ad tech will continue to grow in step with its potential, bringing investors back to the strongest players.
Tod Sacerdoti, chief executive and founder of BrightRoll
Originally posted The Wall 19 January 2015