"Linear TV has always known this, and now programmatic buying for video needs to drastically pivot in order to catch up." -John Peragine, Rubicon
Conventional wisdom among marketers today has been that traditional TV marketing needs to take a page from the digital and programmatic media space. But believe it or not, when it comes to ad serving, programmatic advertising would do well to take a page from linear TV.
Traditional linear TV ad insertion has always occurred in a server-to-server environment. Meanwhile, in the programmatic ad space, client-side ad insertion has become the standard. And that was fine when the ad ecosystem was dominated by waterfall auctions and largely static ad creative. But the ecosystem has rapidly and fundamentally changed. Auction dynamics have shifted heavily toward header bidding, and more and more ad creative is moving into the video space. In fact, spending on digital and mobile video advertising has increased 53 percent overall since 2016.
The future of programmatic advertising is video. And when it comes to video, server-to-server ad insertion is a prerequisite for success. Linear TV has always known this, and now programmatic buying for video needs to drastically pivot in order to catch up.
The Rising Importance of Server-to-Server
More of the digital advertising being run programmatically today is featuring video. At the same time, programmatic buying is increasingly moving into other video-based channels, including the over-the-top (OTT) video and connected TV realms. The lines are blurring, and old distinctions between online and offline are breaking down. TV and programmatic video are merging, and multiscreen advertising experiences are becoming more important than ever.
The problem is that most multi-screen ads today are being delivered by client-based ad insertion systems. In a client-side environment, the ad insertion tech sits within the browser or device’s media player, and that’s where the network requests and decisioning happen. One of the main problems with client-side ad insertion, especially now that header bidding has risen in prevalence, is latency. Every SSP tag inserted client-side drags down the system. That’s a problem for publishers when it comes to simple display ads. It’s a catastrophe when it comes to video, where the viewer experience can be seriously compromised by ad lags.
To prepare for the video-everywhere future, ad insertion needs to rapidly shift from a client-side environment to a server-to-server environment. Only in this way can our industry ensure that user experiences are up to snuff when programmatic buying of OTT and connected TV placements becomes the standard. Server-to-server ad insertion still allows for unified auctions (versus a waterfall approach) like header bidding, but the bidding happens on the server of the ad tech vendor rather than the publisher. This removes the latency challenges associated with client-side serving, and the ad experience becomes seamless.
One of Many Needed Pivots
The pivot from client-side to server-to-server is happening, but the pace of change needs to accelerate to keep up with advertisers. Leading advertisers are already clamoring to follow viewers into OTT and connected TV spaces with their ad buys, but at present, there are a number of barriers preventing dollars from flowing into this space the way they should. The need to move to server-to-server insertion is only one such challenge. Others include:
- Measurement: Digital advertisers want to see the same kind of accountability in their advanced TV buys as they’re used to seeing in standard online buys, but OTT and connected environments just aren’t there yet. To some extent, buyers need to remember that OTT and connected TV buys serve the same purpose as those in linear TV: awareness. The metrics by which such buys are judged should be the same in that regard. That said, there’s still plenty of room to improve in the measurement space when it comes to these emerging channels.
- Addressability: TV buyers are eager to target their TV and video spends to reach specific audiences, and OTT and connected TV make that possible. But, as with measurement, there are a lot of kinks to work out.
- Integration: Finally, connected TVs open up a wide realm of possibility in the performance marketing space, but today’s ad tech landscape is still in nascent stages of enabling the kind of lean-forward ad interactions in TV environments that brands would love to buy.
Already we’re seeing industry groups come together to solve the above challenges, and the next 12 to 18 months promise to bring about interesting developments and progress. The above barriers to expansion in the video advertising space are formidable, but our industry has inertia on its side. In other words, advertisers want to invest more deeply in video, including in the OTT and connected realms. It is now incumbent upon the ad tech ecosystem to deliver the needed solutions.
John Peragine is the general manager of Rubicon Project’s Video business, which is focused on providing a premium and transparent marketplace for both buyers and sellers to transact. Founded in 2007, Rubicon Project’s mission is to keep the Internet free and open and fuel its growth by making it easy and safe to buy and sell advertising.