eMarketer has published a new report looking at how digital video advertising will lean more heavily on programmatic advertising in the years to come. CEO Jeremy Ostermiller offers his perspective throughout the report, “Programmatic Video Advertising: Poised for Rapid Growth Despite ‘Premium’ Holdouts.”

Within, Jeremy talks about helping marketers understand the continued adoption of private marketplaces, the push for more uniform audience targeting & measurement, and the need for greater control of ad quality. Below is a recap of the main issues topics covered throughout the report.

Programmatic Video Poised for Rapid Growth

Screen Shot 2015-10-20 at 10.19.22 AMOverall, eMarketer finds that enthusiasm for automating video ad buys is high, and despite some holdouts, eMarketer is optimistic about programmatic video’s growth in the coming years. According to the report:

“Programmatic video will account for some 39% (nearly $3 billion) of the total amount spent on US video advertising this year, with that figure predicted to climb to 65%, or $7.4 billion, by 2017.”

Programmatic Video’s Five Key Growth Influencers

There are five key factors that will bolster programmatic video’s adoption and growth over the coming years.

1. The Emergence of TV Everywhere Mentality 

TV is now consumed across laptops, desktops, mobile and OTT devices. Advertisers are only in the early stages of adapting to this mentality. Programmatic will quickly grow as it is best equipped to scale these cross-screen buys and advertisers become more comfortable with the practice.

2. Continued Adoption of Private Marketplaces

RTB-driven private marketplaces and direct deals are drawing the attention of more premium publishers and buyers. While inventory has been historically low, eMarketer predicts a major shift in thinking during the coming years.

3. The Push for Greater Control of Ad Quality

The industry is laser-focused on solving issues surrounding viewability, fraud and brand safety, and great strides are being made on all fronts. eMarketer predicts the concerns will wane as the industry continues to set standards and crack down on the culprits.

4. OTT Enters the Programmatic Pool

The growth in popularity for services such as Hulu, Netflix, Apple TV and Amazon Prime, along with IP-connected consoles like Xbox, Playstation and Roku have led eMarketer to predict a good portion of growth in the programmatic video space will come directly from OTT inventory over the next 12-24 months.

5. The Push for Uniform Audience Targeting and Measurement

Thanks to digital, audience targeting is becoming increasingly precise. However, at the same time, the proliferation of devices has made identifying and targeting across platforms much more difficult. While there have been rapid advancements in device and audience identification, problems still arise for those looking to align their TV buys with digital. However, the failure to leverage programmatic’s rich audience intel capabilities isn’t always the fault of the buyer. As Jeremy notes, “publishers have first-party data, but they aren’t very sophisticated on how to best use it.”

In time, device identification and audience-matching capabilities, coupled with publisher’s increased utilization of this data will help to make audience buying a more fluid, device-agnostic practice. As eMarketer notes, we are already seeing publishers becoming more comfortable and willing to allow advertisers to use audience data to inform their deals.

Programmatic Video Holdouts

While, programmatic video is undoubtedly poised for major growth in the coming years, there are still concerns on both the buy and sell sides that are affecting it’s rate of adoption.

Premium Publishers Going Direct

While premium publishers certainly see the value of programmatic, especially as audiences become increasingly screen-agnostic, many are still hesitant to get involved due to the relative ease of with which they are able to sell their inventory via direct sales channels.

Attribution

Attribution is often cited as a concern for publisher sales forces who are accustomed to selling inventory traditionally. As Jeremy notes:

“The biggest tension points that we see with the premium publishers is there is no attribution back to the sales person when it comes to the open exchanges and even the private exchanges.”

However, Jeremy goes on to explain how deal ID allows for them to run IO-to-IO business deals programmatically, with attribution back to the sales person. This has led to increased motivation to sell programmatically.

Audience Targeting and Measurement

Buyers, on the other hand, have different reservations when it comes to adopting programmatic video. As they look to extend their campaigns across screens, issues associated with audience identification, targeting and measurement need to be addressed, as there are still hurdles especially for mobile and over-the-top (OTT) devices.

Quality and Fraud

Lastly, while quality issues are certainly not unique to either video or programmatic advertising, the proliferation of inventory coupled with video’s higher CPMs raises unique concerns of fraud, brand safety and viewability. “Fraud is absolutely keeping people away,” said Jeremy. “It’s making them scared, and it’s making everyone nervous.”

Access more information along with the full report at eMarketer.com