Harnessing Programmatic Video Ads for Commerce Media

The commerce media industry has been growing exponentially over the past two decades and now more than ever businesses are looking to connect with customers. Commerce media strategies focus on exposing ads to consumers in the context of shopping and this creates opportunities to target the right customers by providing additional touchpoints and boosting conversions. One way to effectively deploy this strategy is through the use of programmatic video ads. 

The Rise of Programmatic Advertising 

In 2023, the advertising spend came to an approximate $558 billion and it is predicted that by the year 2026 it will exceed $700 billion. Currently, the USA is the dominant market in terms of programmatic advertising, however countries like the UK and China are embracing programmatic purchasing and reaping the benefits. 

What is Programmatic Video Advertising? 

We can define programmatic video advertising as a technology that powers automated and algorithmic buying of an ad slot to surface a video ad for specific customer groups. Programmatic advertising comes with targeting capabilities accompanied by machine learning and AI to optimize ads in real-time. Currently around 75% of video ads are shown by using programmatic video advertising and the number is continuing to increase day-by-day. 

In the modern video programmatic advertising industry, bots are responsible for automating ad space purchases based on predefined criteria set by advertisers. With this, advertisers can methodically discover their target audience, build the ad assets, and allocate the budget accordingly. After this, the program leverages a real-time bidding model to display the ad to the customers whose profile strongly matches the chosen customer portfolio. The advertiser who bids the highest wins the opportunity and all this is done instantly, within the time the page-loads. 

What are the Benefits of Programmatic Video Advertising?

Programmatic video advertising offers a variety of benefits to advertisers from time savings to optimal ad serving and enhanced targeting.

1. High Precision Targeting: With programmatic ads, advertisers can do highly precise and accurate targeting by using data-driven insights. This helps advertisers in reaching relevant audiences with their ads. This in time will increase the probability of customer engagement and conversions. 
2. Real-time Optimization: Programmatic ads allow for continuous optimization of ad placements in real-time with the help of AI and machine learning. This ensures that the ads are constantly performing the best while offering the maximum ROI (Return on Investment). 
3. Scalability: Programmatic ads are scalable and help businesses in reaching a vast audience across a variety of different platforms. For marketing campaigns aiming to reach a wider audience, advertisers can strategically leverage this capability. Programmatic ads can easily scale to meet the demand of your advertising operations along with the size of your business. 
4. Higher Efficiency and Speed: As key steps of the ad buying process become automated, it streamlines the entire process. This saves time and resources, allowing marketers to focus their resources on creative and strategic development. With Real-Time Bidding (RTB), ad placements are decided in milliseconds assuring that ads are delivered efficiently.

The Impact of Programmatic Video Ads on Retail

Although there are multiple industries that are benefiting immensely from programmatic ads, retail stands out whereas it allows brands to create personalized video marketing experiences for their shoppers. Let’s explore some of the ways in which video programmatic ads can amplify retail media campaigns.

1. Creative Optimization: With DCO or Dynamic Creative Optimization, advertisers can tweak their ad content by leveraging real-time insights. Hence, ads will be more personalized leading to enhanced relevancy and performance.
2. Personalized Shopping Experiences: Programmatic video ads can be customized to specific shopping needs of a specific buyer based on the buyer's purchasing history. This not only produces more sales opportunities but powers higher engagement. 
3. Enhanced Attribution: Retailers can easily calculate the performance of their campaigns with the addition of detailed tracking, analytics, and reporting. With enhanced attribution comes a deeper understanding of which strategies are working and where changes are required. 
4. Cross-channel Consistency: Programmatic video ads also offer consistent delivery by enabling advertising across multiple channels. A shopper might be browsing from their desktop, mobile device, or smart TV and cohesive ad experiences will be offered irrespective of the device. 

These multiple advantages have encouraged various brands to invest in programmatic video ads to reach the next level of their advertising. Outlined below are some key examples of video ads in use: 

1. In 2014, Google found that programmatic advertising can be useful in promoting Google Search App. Once they started running the campaign it not only reached 30% more audience but also improved cost-per-thousand impressions (CPM) by 30%. Brand awareness increased by 50%. 
2. Renowned digital and print publication ‘The Economist’ also used programmatic advertising with success by leveraging subscriber, cookie, and content data. The campaign generated 65,000 new prospects with additional ROI of 10:1. Brand awareness increased by 65%. 
3. Kellogg’s also began running programmatic ad campaigns in 2014. The target was to use digital ads to drive offline sales. Their viewability increased by 70-80% and they also achieved 2x better targeting.

Challenges and Considerations 

While programmatic ads offer an optimized approach to market your businesses, there are a few challenges to consider:

1. Ad Fraud: With automated ads, there are also chances of ad fraud. Working with reputable platforms and ensuring transparency can effectively mitigate this risk. 
2. Creative Fatigue: When brands repeatedly display the same ad creatives this can lead to creative fatigue among audiences. It’s essential to keep updating ad creatives on a regular basis and use A/B testing to keep the content engaging and fresh. 
3. Data Privacy: Nowadays, people are more aware and concerned about data privacy. As a marketer, one must comply with data privacy rules and regulations. It’s crucial to get a user’s consent when collecting and using personal data to maintain trust and compliance. 

There’s no doubt that programmatic video ads are revolutionizing the way retailers connect with their customers. Whether it’s a small retailer or a global brand, integrating programmatic video advertising can aid in reaching new heights to achieve advertising goals. The future of programmatic ads looks promising, as there will be more advancements in AI and ML that continue to evolve enhanced targeting and optimization.