Channel 4's move to offer advertisers a digital marketplace to buy advertising programmatically, from next year on All 4, its new video on-demand (VoD) platform, should be welcome by advertisers and agencies.
It kick starts the avalanche towards programmatic in VoD by fuelling the market place. It also fundamentally changes the dialogue as sceptics who sought to slow down the programmatic transition have always pointed to the lack of broadcaster support. This changes all that.
Combined with the recent spate of acquisitions by large publishers (BrightRoll by Yahoo, LiveRail by Facebook and Adapt.tv by AOL), Channel 4’s announcement is a sign that the industry is putting some serious backing behind video.
The increasing shift of investment from "banners" to "video and content" in digital display has been a headline story for media agencies in recent years.
According to the IAB UK, video accounts for about twenty per cent of all digital display budget and another twenty one per cent for native and content.
In addition, mobile video is the fastest growing sector of digital advertising in the UK.
Reflecting changes in media consumption
Many years ago advertisers were resistant to shifting their above-the-line budgets into digital media. However, changes in audience behaviour from live TV to catch-up and PVR has meant advertisers are having to move chunks of their large TV budgets into VoD to reach these lost audiences.
So the move by Channel 4 as well as the investments by Yahoo, Facebook and AOL are not designed to get more of the digital display pot. They are a ploy to get a chunk of the massive TV budgets that are constantly shifting to digital.
Media agencies are largely familiar with the likes of BrightRoll, LiveRail and Adap.tv, but with their recent acquisitions, the proposition becomes far more interesting.
The fact that they can be bought as part of a single platform solution, aside from making life a little easier from a relationship perspective, provides a degree of familiarity and trust to both traders and clients who are more used to dealing with larger digital publishers.
There is also potential for these platforms to be rolled into existing trading deals.
This is exciting because, for the first time, we will be able to properly re-shape the planning and execution of video budgets across the whole supply chain.
An opportunity for brand advertisers to enter programmatic trading
There are advertisers who are looking for unification of frequency or who want to run consistent audiences via a data management platform (DMP) across the market.
Channel 4's announcement is a massive step forward for them. It's highly likely that ITV will also now step up and accelerate in this space and thereby further fuel the growth in video.
This represents an opportunity for brand advertisers to really immerse themselves in the world of automated trading.
Currently, this space is dominated by advertisers focused on performance due to the fact that many brand advertisers and planners hold the view that programmatic hinders creative and contextual capability.
Furthermore, in an era of concern around ad fraud and transparency of inventory, the Channel 4 announcement helps raise the bar and reassures advertisers.
With over 30 per cent of all video forecast to be traded programmatically in 2015, we expect these sorts of announcements may push that number even higher.
The argument has always been that broadcasters are sold out. For us, this screams of opportunity.
By using an auction platform, they can drive prices up even further. If the inventory is as strong as we all believe it to be then it should deliver great results and deliver a win-win all around.
Written by Marco Bertozzi, president, Audience on Demand EMEA and North America client services, and Liam Brennan, digital strategy director at Starcom UK.