Premium Non-Broadcaster Video Driving the Rush to Programmatic

The online video ad industry is seeing a rapid growth in programmatic transactions, but one area is moving faster than the rest. According to Ooyala's State of the Media Industry 2016 report, companies with non-broadcaster video inventory, something that's often in short supply, are rushing to programmatic more quickly that most broadcasters are in order to differentiate their offerings and build scale.

The report notes that private programmatic marketplaces and automated guaranteed trading have emerged as popular premium video sales tools. Both lead to favorable ad yields, satisfy buyer demands, and resemble traditional direct video ad sales.

Native ad sales are on the rise, Ooyala finds, party because they help publishers avoid ad blockers. The Guardian recently found that 22 percent of the adult web surfers in Britain use ad blockers. Some sites have begun restricting content for people who use ad blockers, while also creating a better experience by turning away intrusive advertising.

Expanding on Social

Publishers that offer original video are expanding their viewership by partnering with social platforms, Ooyala finds. The strategy is working for many, but is not without dangers.

With Facebook's reach too big to ignore, publishers including The Atlantic have signed on. News UK and others have invested heavily in Snapchat Discover and Facebook, which together serve 8 billion daily video views. Those platforms now set the rules for publisher-partner revenue sharing. Publishers find themselves in a position similar to what the music industry once faced with Apple iTunes.

Buzzfeed has been especially successful with off-site distribution, Ooyala notes, monetizing content across platforms and offering content tailored to each one.

The social platform strategy comes with plenty of risks, such as loss of value to the core website, dilution of brand names, and the possibility that platforms will change their revenue split models.

Ooyala recommends that publishers that want to focus on their owned sites strategize how to use unique service propositions to attract audiences and build brand value. For example, The New York Times uses its archive to create new services and revenue streams.

Download the full State of the Media Industry 2016 report for free (registration required).

Troy Dreier's article first appeared on OnlineVideo.net