Premium Programmatic?

Some say that programmatic will quickly become the new inventory for all forms of advertising, making coveted impressions previously sold exclusively through direct relationships available on private exchanges. But does premium mobile video fit into the programmatic picture?

It doesn’t when you look at the economics.

It’s a given that more publishers will make more inventory available via programmatic platforms and it’s likely that a sizable portion of that inventory will soon be video, but premium mobile video simply is not governed by the same supply-side economics as display and user-generated, non-premium video advertising.

The supply of display advertising opportunities is huge, with more than 2.3 trillion ad impressions in 2013 alone (ComScore Ad Metrix September 2013). In the video realm, ad impressions topped 24 billion in 2013, bolstered especially by user-generated content of the “YouTube” variety (ComScore Video Metrics October 2013). With numbers this big, it only makes sense to offer impressions to the highest bidder, and in the case of display advertising especially, massive supply means an algorithm can likely sell inventory more efficiently than a human. The same is true for non-premium video.

But premium mobile video is different. Supply is limited. In the entire online video universe, less than a quarter of ad impressions are premium. In mobile, that number is even smaller. Premium publishers know they have a top commodity on their hands and they are not willing to part with their inventory easily.

Yet despite supply constraints, demand among top brands remains high. Big brands require brand-safe, relevant content with the seamless, unobtrusive ad experiences premium mobile video affords them. On top of that, brands want unique creative, smart metrics, and usable consumer insights.

These are not things an algorithm can provide — at least not yet! For now, due to supply constraints, consistently high demand, and the individual brands’ intricate needs, premium mobile video is likely to continue to be bought and sold by humans.