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Big concerns facing programmatic video – transparency, brand safety

  • 26% of online video ads, representing between 21-40% of SE Asian marketplace, were traded programmatically
  • The percentage of online video impressions through programmatic trading was higher in SE Asia
  • There is a constraint on premium inventory that could impact the growth of the market: Matt Von der Muhll

As programmatic online video and RTB (real time bidding) becomes important, top two concerns plaguing buyers and sellers in Southeast Asia are transparency and brand safety. This is also true for a more sophisticated programmatic market like Australia. The insight emerged in a SpotXchange, a video advertising platform study by Forrester Consulting.

Commissioned by SpotXchange, an April 2014 study conducted by Forrester Consulting titled ‘The State of Online Video Programmatic and Real-Time Bidding in Australia and Southeast Asia’, highlights the significance and need for SSPs (supply side platforms) and DSPs (demand side platforms) to work closely together. This will help improve transparency and brand safety issues in the online video programmatic and RTB industry that advertisers, publishers and partners face to ensure that video RTB usage continues to grow in Asia Pacific.

The big concerns
Transparency and brand safety were the greatest concerns between buyers and sellers receiving an average rating (AR) of 7.2 and 7.4 respectively out of 10. According to Forrester Consulting, programmatic video and RTB is expected to grow at a faster speed in Southeast Asia. Twenty-six percent of online video ads representing between 21-40 percent of the Southeast Asian marketplace were traded programmatically. However, the percentage of online video impressions conducted through programmatic trading was higher in Southeast Asia with 30 percent of online video impressions conducted through programmatic trading representing 21-40 percent of the marketplace.

Matt Von der Muhll, Managing Director of SpotXchange Asia Pacific said, “Programmatic trading is catching up in Southeast Asia. However, there is a constraint in the supply of premium inventory that could impact the growth of the market that needs to be addressed through education to agencies and marketers on the true advantages real-time bidding offers from both a value and volume play.”

“Some publishers in Southeast Asia have a misconception that trading in a marketplace actually drives pricing yields down. SpotXchange has addressed this through introducing new functionality on our platform to provide more controls and data to increase the visibility on pricing and yields. We will continue to work with our partners to educate users on how they can get the most out of trading in our ecosystem,” he added.

Forrester Consulting identified other gaps on both the demand and supply sides of the market, which could impact the growth of programmatic in this region. The study indicates that DSPs who believe the price of video RTB CPMs (cost per millions) will increase (30 out of 72) versus SSPs (12 out of 28) whom believe the price will remain the same. SSPs perceive that prices will decrease to allow higher volumes of inventory to be traded; however low CPMs are not likely to drive demand.

“At the moment, publishers are still focused on selling volume and closing the deals quickly. This behaviour stems from trading in the days of programmatic display, where it was all about driving down the price of display inventory in an open marketplace. However, this is not the case with programmatic video as it has a higher barrier of entry for publishers, greater controls and functionality. From the demand side, they are specifying more parameters around their video buys and this further diminishes the volume of inventory available and their willingness to pay a higher price for the inventory they desire,” Mr Von der Muhll said.

Additional highlights
• The value of targeting capabilities which is seen as being significantly more important by DSPs (AR: 7.9) versus SSPs (AR: 6.7).
• The importance DSPs place on transparency (AR: 7.3) versus SSPs (AR: 6.4).
• The quality of inventory being of higher importance to DSPs (AR: 6.7) versus SSPs (AR: 5.9).

Forrester Consulting conducted 100 phone interviews with publishers, ad trading desks, DSPs, brand marketers and ad-tech professionals in Australia (50) and Southeast Asia (50) between January and March 2014.

Noor Fathima Warsia

A veteran journalist in the Indian marketing, media and advertising fraternity, Noor Fathima Warsia took on the role of Group Editor -– APAC for Digital Market Asia in May 2013. Noor has focussed on tracking trends and developments in the Indian media industry.