A lot can happen in a year, especially in an industry as fast-paced as ad tech. For video advertising, in particular, 2014 was undeniably a watershed year. Digital video took a giant leap into programmatic buying, experienced huge gains in both viewership and ad spend, while continuing a wave of consolidations.
With such an eventful year under our belts, I’m confident that this will be the year that online video advertising fully ‘grows up’ and comes into its own. Here are three major signs that signal why 2015 is set to be a breakthrough year for video advertising.
- Programmatic video goes mainstream.
Technology has transformed digital media buying, as advertisers and publishers continue to lay the groundwork for a fully automated video ad future. Programmatic video ad sales in EU-5 reached €226m in 2014, according to eMarketer, and is expected to soar 63.5% this year to reach €369m by the end of 2015.
Advertisers and agencies are already sold on programmatic, but in 2015 we will see publishers fully embrace programmatic technology as they begin to realise the huge opportunity it represents for efficiency and financial growth. We can also expect to see gains in open, RTB-based video ad exchanges, as advertisers seek to consolidate their video ad buys via a single programmatic platform. Both advertisers and publishers will become more empowered by data, enabling video to deliver more concrete results.
- Demand for mobile video skyrockets.
As consumers move their media attention to smartphones and tablets, it makes sense for advertisers to follow the trend. However, many advertisers have remained cautious of the format’s measurable impact. In 2014, mobile inventory supply outstripped demand, which generally kept CPMs lower than desktop. This was due to a lack of standard practices around how to effectively target, measure and frequency cap mobile video ads across devices. But that’s all about to change in 2015.
Sophisticated mobile targeting and measurement tools have come to market, which allow advertisers to target and measure in the same ways they can on desktop devices. Significant strides in device ID and cookie mapping will enable cross-screen targeting and measurement, while more precise geo-targeting capabilities will also emerge.
These advancements will, in turn, generate more premium inventory, causing average mobile video CPMs to rise. In fact, Business Insider predicts that over the next few years mobile video ads will grow almost five-times faster than desktop, which leads me to believe that by the end of 2015, there’s a real chance that advertisers will spend more on mobile video ads than desktop.
- Industry consolidation will progress and ad tech will fall back in favour with investors.
2014 was a challenging year for ad tech in the capital markets, as a handful of newly public companies saw their share prices decline. At the same time, it was a year of progression, with a number of big exits via acquisition for video platforms, as larger technology companies began to understand the value in video. This progress will only continue over the next year, and I expect 2015 to be the year that ad tech companies rise back to favour in the capital markets. Video platforms providing full-service ad buying and management solutions – including programmatic trading, metrics and measurement, cross-channel targeting and partnerships with anti-fraud providers – will emerge as leaders, attracting a greater slice of advertisers’ video budgets. On the other hand, video platforms offering point solutions will be acquired by larger players, or fail to gain critical mass.
Looking at the current state of the ad tech industry, it’s easy to forget that it is still a young category, especially when it comes to programmatic video. But the future for automated, targeted and measurable video advertising is bright. As we move into 2015, ad tech will continue to grow in step with its potential, bringing investors back to the strongest players.