AD TECH INSIGHTS
by Roman Vrublivskyi
Posted on Oct 18, 2023
8 Programmatic Video Advertising Trends
by Roman Vrublivskyi
by Roman Vrublivskyi
We’re now observing the exponentially rising demand for video ads. 54% of customers prefer to watch more video content from brands they support. Meanwhile, 66% of customers choose video content over text when they want to find out about a brand or product.
Ignoring this fact means leaving a considerable market share behind. Therefore, over 80% of businesses have already implemented their video advertising strategy, and about 96% of marketers have engaged in video advertising.
However, even jumping into video advertising doesn’t guarantee success. How to make video ads engaging, and what are the programmatic video ads trends? Before answering these questions, let’s consider the phenomenon of video advertising.
Video advertising is the process of displaying promotional content in the form of video. This format has been around for a long time, since the early days of television and media houses. But over the years, video ads have migrated from just television broadcasts to other digital channels, giving rise to digital video advertising trends. With the growth of technologies, creating more sophisticated and engaging video advertisement content for digital landscapes such as CTV and mobile has become even easier.
Video ads play a major role in brand loyalty and product patronage. A social experiment discovered that 94% of buyers made a buying decision at least once after watching a product video. Another study revealed that 85% of Millennials made a buying decision after watching a video.
According to Demand Sage, 84% of marketers claim that video has assisted them in generating leads. A further 85% of marketers admitted that video is an excellent way to gain consumers’ attention online. Video advertising remains the most common way people discover and patronize a brand.
According to a Harvard Business Review publication, advertising content needs to engage and persuade its audience before converting. While other forms of advertisement are competent at persuading, video ads do great at engaging as well as persuading. People naturally tend to respond better to visuals than texts or audio.
Mediamind research found that people are 27.4 times more likely to respond to an online video ad than other traditional ads. One of the primary reasons for this is that videos combine two elements that pique viewers’ interest: movement and sound. These elements are captivating, hence spurring the instincts of viewers to engage.
Other research has posited that, on average, people recall over 90% of a message when they watch it, as opposed to 10% if it’s in text format. Besides, approximately 80% of customers can recall a video they saw as recently as a month ago. This cannot be said for other forms of conveying advertisements.
It is noted that video ads generate more clicks than other ad formats. The CTR of video ads in mobile apps is 7.5 times higher than that of display ads.
People get interested when they see relatable or exciting videos. They are more willing to click the CTA and learn more about the product if the message is captivating enough to draw their attention and raise their interest.
So, what are the trends of programmatic video ads?
Video advertising on CTV, data-driven targeting and personalization, mobile video advertising, and native and in-stream video ads are the latest programmatic video advertising trends that promise to stay for the foreseeable future due to their abundance of opportunities for advertisers.
As a HubSpot report states, people consume video for different purposes, mainly to escape from daily problems and routine tasks, have fun, and unwind. Moreover, nowadays, viewers don’t need to go to the cinema or wait for their favorite show or sitcom on linear TV, as they did not long ago.
Connected to the Internet, smart TVs have turned traditional video consumption into binge-watching. In 2019, US adults spent about an hour per day watching CTV. In 2024, this number is projected to grow twice, exceeding two hours daily.
Another report states that video consumption on CTV accounts for one-fourth of the total time spent in the digital ecosystem. Moreover, 47% of consumers across developed markets choose to watch ad-supported streaming services.
If CTV isn’t one of the advertising channels of your marketing strategy yet, it’s time to thoroughly think about it so as not to miss ample opportunities in this space. The future of programmatic video advertising partially belongs to CTV because of its granular targeting power and dynamic ad insertion that allows for adjusting ad campaigns on the go.
Data-driven targeting and personalization are the latest trends of programmatic video advertising. These two components are powerful tools that give the ad campaigns a competitive edge and drive sales. Data-powered targeting takes digital advertising to the next level by providing unique customer interactions with products.
Leveraging information about users (be it their online behavior or demographics), companies and brands can easily find the most receptive audience likely to respond to their messages in video ads and eliminate the waste of ad budget. According to McKinsey, personalization increases marketing ROI by 10 to 30%.
71% of consumers expect companies to deliver personalized interactions that can hardly be implemented without data-powered incentives. Viewers are more likely to engage when they encounter content that resonates with their interests.
As for businesses, 80% single out the positive impact of personalized ads, which led to increased consumer spending. Another 62% of respondents claim that personalization in advertising enhances retention.
AI algorithms adjust ad displays to the users’ interests and previous interactions so beauty geeks are less likely to see ads relevant to sports enthusiasts, and vice versa.
Therefore, data-driven personalization factors in improved click-through rates, longer time to view, and increased brand affinity that turn video advertising from bothersome into engaging experiences.
As IAB Europe’s State of Online Video Advertising in 2022 report states, over 60% of digital video campaigns are run on the mobile web. Experts project the annual growth of mobile advertising spending to reach $235.7 billion by 2025.
So, is the future of programmatic video ads possible beyond the mobile landscape? Absolutely, no, mainly when about 84.8% of the US population uses mobile devices, and their proliferation keeps growing.
The future of programmatic video advertising on mobile devices holds numerous opportunities for businesses to succeed. 63% of mobile advertisers believe social (e.g., Instagram reels) and short-form videos will stay on the rise in the year ahead.
The main reason it happens is that the short videos are attention-grabbing, easy to consume, and thus have a higher click-through rate.
Short video ads don’t need much resources for production, are more cost-effective, and provide improved engagement with the audience. They resemble the continent of the platform where users consume them, so they are more likely to convert.
Actually, native video ads and in-stream video ads are also programmatic video ads trends in the upcoming years. Let’s delve into the details.
The pursuit of authenticity is a distinctive feature of native and in-stream video ads. While native ads resemble the content of the platform where they are showcased, in-stream ads appear:
Advertisers lean on programmatic technology to optimize ad placement and ensure a non-disruptive viewing experience, which improves user engagement in video ads with a brand compared to other types of ads. They can opt for the slots for their content to make messages reach relevant customers.
Native and in-stream video advertising offer format flexibility that provides advertisers with more freedom to experiment with formats and find the best match for their marketing goals.
The ad tech trends listed above are not the only innovations expected to be widely used in digital advertising in the following years. With the impact of technologies on the industry, a few more trends of programmatic video advertising will be adapted.
Integrating interactive and immersive experiences into video has revolutionized video consumption, and adopting these emerging technologies for programmatic ads holds great potential for advertisers.
Interactive and immersive ads can primarily improve users’ engagement with content and brands, turning passive consumption into captivating interaction.
How does the interactivity between the audience and the brand function? It involves embedded calls to action, clickable hotspots, polls, and similar activities that encourage viewers to participate and influence the narrative.
Eventually, interactive and immersive ads enhance engagement by fostering brand loyalty.
Shoppable video ads are a win-win for e-commerce as viewers can click on products within the video and proceed to a direct purchase. This smooth shopping experience makes it simpler for consumers to get from discovery to purchase.
Shoppable ads drive direct sales and enhance the ROI of video advertising campaigns. They offer a convenient and immediate way for viewers to act on their interest in a product.
360-degree video ads provide viewers with a fully immersive, panoramic experience. Advertisers create a captivating and memorable brand interaction by allowing viewers to control the perspective and explore the environment within the video.
360-degree video ads can leave a lasting impression on viewers. These ads suit brands for showcasing products or locations and help improve conversions by delivering this immersive experience.
AR and VR technologies are increasingly making their way into programmatic video advertising. AR overlays digital elements in the real world, while VR immerses users in entirely virtual environments.
Advertisers can create branded AR filters, interactive video ads enhanced with VR experiences, or immersive VR tours, offering viewers unique and engaging interactions with their brands. AR and VR can transport viewers into brand narratives and offer them hands-on experiences.
These technologies can drive engagement and provide memorable interactions that lead to brand recall and affinity.
Advertisers can integrate all these trends or start with some of them. However, the most challenging in this situation is ensuring that video ads are broadcast properly in the programmatic landscape. SmartHub offers VAST to make this process smooth and controlled.
The Video Ad Serving Template (VAST) is a program or protocol that manages how video ads are displayed on various online platforms and across diverse digital devices. The VAST program enables communication between the ad server and the media player to determine which ads the video player should show and for how long.
VAST includes a tag, which is usually a script. This script is like a typical javascript except that, in this case, it is meant to display videos. The script includes the commands the media player would communicate with to execute the video ad.
VAST basically functions in three stages:
In this step, the video player makes a query to the ad server to obtain the ad content.
The ad server receives requests and sends an inline response containing the media file and the necessary tracking URLs.
The video player activates tracking pixels after the ad has been rendered. This keeps a record of impressions or clicks.
SmartHub simplifies the process of trading with VAST tags. On SmartHub, partners connected by VAST can trade efficiently with other partners, irrespective of their connection type. Thus, the opportunities for efficient media trading are extended exponentially.
All you need to do is access your dashboard and select any of the options.
This enables VAST partners to trade with each other.
This option allows VAST partners to trade across different connection types (OpenRTB, VAST, and pre-bid server).
This enables VAST partners to trade with those connected by OpenRTB.
It’s possible to trade via VAST on both the SSP and DSP sides. There is a matching macros table for SmartHub users in order to replace the correct macros in tags before placing them on the DSP side.
The strong growth expects digital advertising ahead. To stay competitive in this ecosystem, advertisers should adopt new technologies and follow trends to outcompete. The trends regarded above have promising potential and are worth implementing because they will stay in digital advertising for years.
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