Programmatic Advertising 101: What is Programmatic Video Advertising?

Each month, Basis Technologies’ Programmatic 101 series tackles a different facet of programmatic advertising—from best practices for buyers, to competitors in the space, to trends you should know.

The advertising industry is constantly expanding with new channels, platforms, and formats, but video continues to be an important part of any advertiser’s media mix. In fact, eMarketer predicts that $62.96 billion will be spent on programmatic digital video this year, and that over half of total programmatic digital display ad spending will go to video. Clearly, now is a critical time for advertisers to tune in!

In order to do so, advertisers must understand what programmatic video advertising is, the different types of programmatic video available to run in a DSP, and the advantages it can bring to media campaigns. Need a refresher? You’ve come to the right place!

What is Programmatic Video Advertising?

Programmatic video advertising leverages technology to buy and serve video ads that are shown during other video content. These ads may be served across exchanges or publishers, within traditional display ad slots, or across television devices.

There are two main buckets that programmatic video can be organized into: online video and advanced TV.

Online video:

Within the online video bucket, there are two different types to be aware of: instream and outstream video.

Instream video is served before (pre-roll), during (mid-roll), or after (post-roll) streaming video content. One example would be the ads that run before YouTube videos (if you’re not using an ad blocker extension, that is!)

Outstream video is served outside of video player environments. This type of ad unit typically includes less traditional video placements, such as:

• In-article/in-feed: Videos served within the content of an article or within a feed
• Native: Videos that mimic the appearance and style of the surrounding content
• In-banner: Videos served in display ad slots (320x50 slots are most common here)—these generally do not include audio and are short in length
• Interstitial: High-impact, full screen videos that cover the interface of the host app or website

Advanced TV:

Advanced TV is an umbrella term for TV that’s delivered outside of the traditional linear TV model. In general, advanced TV offers increased targeting and measurement when compared with linear TV. Advanced TV includes:

• Over the top (OTT): Video content that is included before, during, or after television content that is served via the internet instead of network/cable distribution. While OTT refers to the video content itself, connected TV (CTV) refers to an internet-connected device (such as a Smart TV, tablet, or smartphone) that facilitates the delivery of that video content.
• Addressable TV: Unlike OTT, addressable TV is more closely related to linear TV in that it uses traditional distribution to serve video ads. What differentiates addressable from linear TV is that it utilizes programmatic technology and audience segmentation to serve different ads to different households.
• Programmatic TV: The method of using programmatic technology to purchase linear television spots. Of all the advanced TV types discussed here, programmatic TV most closely resembles traditional TV buying in that it can measure reach and frequency.

Benefits of Programmatic Video

While buying video programmatically comes with a variety of benefits, let’s review the top five:

1. Greater Targeting Precision

Advertisers can tap into first- and third-party data when buying video programmatically, which allows them to target their audiences more precisely.

2. Low Barrier to Entry

The use of programmatic technology means that advertisers don’t have to worry about high minimum spends or upfront contracts. In addition, since most programmatic inventory is sold on a dynamic CPM, any cost efficiencies that are driven via optimizations are passed right back into advertiser’s wallets.

3. Increased Scale

When an advertiser buys video programmatically, they get access to 40+ exchanges in one buy. In addition, thanks to the invention of cross-device targeting, advertisers can target a user who saw their video ad across multiple devices, allowing for higher frequency and greater recall of video messaging.

4. Greater Agility

Since advertisers don’t have to work with middleman publishers when buying programmatic video ads, they can quickly update their video messaging, turn off creative that’s not performing well, and change their targeting in real time.

5. Advanced Reporting

Buying video programmatically offers advertisers a suite of performance metrics to look at, plus the flexibility of slicing and dicing performance data by DMA, audience, and more. However, there can be limitations with reporting for advanced TV depending on how you end up buying the inventory—if you’re buying traditional TV spots, for example, you won’t be able to track things like click-through-rate or viewability.

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Of all the different ways advertisers can leverage programmatic video, connected TV advertising is becoming increasingly important. CTV is leading the significant growth of digital video ad spend, and has been particularly impactful in the 2022 US election cycle.

Now that you know all about programmatic video and its benefits, take your knowledge to the next level by diving into our guide to connected TV advertising!