The future of media will be automated

The way online advertising is bought and sold has finally made the leap from manual to machine-learned automation. Welcome to the world of programmatic branding.

Remember when stocks were bought and sold on the trading floor? Electronic stockbroker eTrade changed the game, and put us all in the buying seat from the comfort of our lounge room. 

Similarly, eBay opened up most of the world for us to buy and sell from an auction-based system that gets both buyers and sellers a fair deal. While the media industry was a little slow to follow the trend towards automation, it is now accelerating at a rapid pace. 

Media companies have innovated faster in the last 12 months than at any point in history. In particular, the way online advertising is bought and sold has finally made the leap from manual, human trading to machine-learned automation. 

At the heart of this revolution is software that enables brands to reach their target audiences more precisely while providing detailed insight into the effectiveness of their ad campaigns. 

Brand marketers looking to shift the perceptions of their target audience  are now armed with a range of video technologies that offer assurances their campaigns will be seen and heard amid the noise and clutter of the media landscape. 

In the world of programmatic branding, advertisers can plug into software platforms that enable them to bid on targeted video ad spots being auctioned in an automated way by publishers. Video ads are bought and sold via demand and supply side operators trading across ad exchanges. 

In essence, media is now being traded like goods on eBay. The advertisers are like the buyers looking for the best deal on a certain product (ad space) and the publishers are the sellers auctioning their products (ad inventory) in the marketplace (or exchange). More than 60,000 video ad auctions take place every second with matching criteria on both sides triggering a successful bid and the serving of the winning ad.

These platforms automate the traditional manual media buying process and have reduced what took an average agency 77 man-hours per campaign down to just six. That huge time and cost saving allows agencies to focus on creating better strategies for their clients.

Video is exploding on the Internet. Advertisers are paying a premium to get their messaging into the video stream and will pay a publisher up to twenty times more to deliver a TV-like ad online compared to a conventional display ad. Known as pre-roll video ads, they run at short duration before a piece of video content loads on a publisher’s website. 

Last week, Pricewaterhouse Coopers, in their annual media and entertainment outlook, said online video advertising is set to grow by 44 per cent each year by 2017 to $559 million. This year alone, it is predicted to grow by fifty per cent to $135 million proving that marketers see video as an incredibly effective branding medium. 

Some analysts predict that in the next decade, between 75 per cent to 85 per cent of all advertising spots, whether it be display, mobile or video, will be transacted on an automated basis. Given the compelling nature of video, I am willing to bet this target will be exceeded by 2017 and that total market automation will be achieved before the decade is out.

My prediction is that video search will eventually overtake web search, and the web will react to this by quickly replacing much of the text on the net with short and engaging video content. Much of the display advertising market, along with traditional media spend, will eventually consolidate into online video as brand marketers realise that placing video ads before compelling content is the most effective way to shift the perceptions of their existing and new customers. 

Stephen Hunt is the managing director of TubeMogul Australia

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